Maintenance reconciliation for Family Tax Benefit (FTB) 277-51190000

Annual maintenance income is estimated during the year to calculate a customer's fortnightly rate of FTB Part A. Maintenance income changes are applied retrospectively which may invoke Mandatory Continuous Adjustment to help reduce the chances of an overpayment at reconciliation.

Maintenance reconciliation is an automatic process that occurs after the end of the relevant financial year, as part of FTB reconciliation. A customer's annual maintenance income is recalculated based on actual maintenance income received, including child support entitlement for periods of private collection, and the actual dates of any child support changes. The Maintenance Action Test (MAT) and Maintenance Income Test (MIT) are then applied to the customer's income tested FTB Part A rate.

FTB Part A is limited to the base rate for a child support child for any period action to obtain child support was required but not taken.

Before to 1 July 2012, if an actual child support amount was recorded for a customer who privately collected an amount that was less than the child support entitlement and no exemption applied, the customer would fail the MAT and would be limited to the base rate for the relevant child support child for that period.

From 1 July 2012, customers will not fail the MAT if they are privately collecting an amount less than the amount assessed by Child Support. The customer will be deemed to be receiving the child support assessed amount, unless a partial exemption has been granted.

From the 2011-12 financial year onwards, customers who claim FTB via a lump sum claim will have their child support details supplied directly to Centrelink via the electronic data exchange. Customers no longer have the option to self assess their child support details within their lump sum claim.

From 1 July 2007, customers with a child support entitlement registered for collection by the Child Support program may benefit from the Maintenance Income Credit (MIC). This is calculated during FTB reconciliation and will only accrue in relation to a child support child. From 1 July 2012 MIC calculations will extend to include children aged 16-18 years who are in full time secondary schooling to align with the Maintenance Action Test (MAT) and the Maintenance Income Test (MIT).

Once reconciliation has been completed, re-reconciliation may automatically occur if Child Support retrospectively increase or decrease the child support assessment for a private collect customer for a financial year that has already been reconciled. If the assessment is retrospectively:

• decreased the customer may receive arrears of FTB
• increased the customer may incur an FTB reconciliation debt. In this scenario the customer can apply for a formal review of the FTB reconciliation debt with Centrelink. However if they want the decision to be reviewed due to the retrospective increase to their child support assessment, they will need to contact Child Support

If necessary, maintenance income details are adjusted on the Override Maintenance Income (MNOI) screen to achieve the correct FTB reconciliation result.

Customers with a blind pensioner exemption for the entire period are exempt from maintenance reconciliation. They are exempt from both the Maintenance Action Test and the Maintenance Income Test.

The results of maintenance reconciliation for a financial year can be viewed from the FAO Reconciliation & Claim Summary (FRCS) screen.