Calculating Family Tax Benefit (FTB) Part A (Method 1) 007-07070020

Method 1 is used if a family's combined ATI is equal to or less than the Part A higher income free area (HIFA). See Part A higher income free area for the rate of the HIFA. Under Method 1, the FTB Part A rate cannot be less than base rate.

A person's maximum rate may include:

• the FTB Part A child rate for each child (includes the Part A supplement which is only paid to eligible persons after the end of the financial year at reconciliation, not as fortnightly payments)
• Energy Supplement Part A if the customer is grandfathered
• Large Family Supplement (LFS). Note: LFS is not payable from 1 July 2016
• Multiple Birth Allowance (MBA)
• Newborn Supplement (NBS)
• Rent Assistance (RA), only if more than base rate Part A is payable

See the References page for a link to historical information.

For details on the Method 1 calculation when ATI is above the Part A higher income free area, see Calculating Family Tax Benefit (FTB) Part A (Method 2).

Under Method 1, the maximum FTB Part A can be reduced to the base rate by the:

• Income Test
• Maintenance Action Test (MAT). If maintenance action is required but the person does not take reasonable action, only the base FTB child rate is payable for the child support child
• Maintenance Income Test (MIT), which only applies to more than base rate child support children

For income support payment customers, the FTB Part A rate is generally not income tested, but may be reduced by the MAT and MIT. From 1 July 2018, the exemption from the income test does not apply to single customers and some partnered customers during an employment income nil rate period. For further details, see Effect of income support entitlement on Family Tax Benefit (FTB).

From 1 July 2016, families with an adjusted taxable income (ATI) of more than the supplement income limit will not be eligible for FTB Part A supplement. This includes customers receiving an income support payment.

Any reduction due to income or maintenance income is apportioned between the FTB Part A components. This means that loss of entitlement to one component can result in a greater reduction in the person's overall FTB Part A rate than the amount no longer payable. For example, if RA ceases to be payable, the income reduction that applied to the RA rate will now be applied to the other components.