Separated couples and eligibility for Family Tax Benefit (FTB) for a period before separation 007-02020080

In normal circumstances, blended family assessments cannot be retrospectively applied. However, when a couple separates, section 29 of the Family Assistance Act (1999) can also be applied to blended family couples. Therefore, this can apply if the couple has not been assessed correctly as a blended family when they became partnered.

Scenario 1

Robert and Sarah became a couple, both having 2 children each from a previous relationship. When they advised of their relationship, a blended family situation was not set up. While they were a couple, Sarah claimed FTB for the 2 children only. Robert has always claimed FTB as a lump sum.

After the couple separates, Robert lodges a lump sum claim for Robert's 2 children , however this is rejected reason PEC (Partner entitled to claim) as the system recognises that the claim covers a period when Robert was partnered. Under blended family rules, they both needed to claim via the same method.

Sarah and Robert would be entitled to share the FTB for all 4 children during the partnered period.

In this case, Robert would be entitled to the remaining FTB legislative entitlement. Sarah cannot incur an overpayment due to ex-partner income. Sarah may also be entitled to receive a top-up subject to legislative limitations on review timeframes. See Dates of effect for review outcomes.

It would not be appropriate to apply section 29 of the Family Assistance Act (1999) if Sarah had originally claimed FTB for all 4 children. If this were the case, Robert would not be eligible because of receiving the benefit of this payment when a member of the couple.

Scenario 2

Elvin and Ida are partnered and each have a child from a previous relationship.

• Ida has claimed FTB by instalments for child Isabella
• Elvin and Ida separate in October and Elvin claims by instalments for Elvin's child Arthur from July onwards

In this case, Elvin is entitled to FTB for child Arthur from 1 July onwards. However, because Ida has already been paid FTB by instalments for child Isabella from July to the separation date in October, the system will reject Elvin’s claim 'PEC' (Partner entitled to claim) as the system recognises that the claim covers a period where the couple were partnered. Under blended family rules, they both need to claim via the same method.

For payment for the period July to October, Elvin could either wait until after reconciliation has taken place and lodge a lump sum claim for Arthur, or Elvin can be paid via the Payment Adjustment (PYAJ) screen. Fortnightly instalments can be paid for Arthur from the separation date of October onwards.

If Elvin is paid for the earlier period via the PYAJ screen, the PYAJ amount paid for Arthur will be checked via manual intervention when reconciliation takes place.

Whether both individuals are eligible for FTB for the partnered period depends on the date of claim determination.

Scenario 1

Damien and Angela were partnered during the 2016-2017 financial year.

Angela lodges a lump sum claim for the 2016-2017 financial year on 3 November 2017.

Angela and Damien separate on 7 November 2017.

Angela's lump sum claim is determined on 10 November 2017.

As the claim was determined after the date of separation, both Damien and Angela are entitled to a share of FTB for the partnered period.

If the claim has already been determined for 1 party, an overpayment would need to be raised if the other party lodges a claim.

Scenario 2

John and Amy were partnered during the 2015-2016 financial year. Amy received FTB by instalments for this period. The couple separate on 27 July 2016. John lodges a lump sum claim for the 2015-2016 financial year on 5 August 2016.

John's claim should be rejected.

John is not entitled to FTB as Amy has already been paid for this period. John has received the benefit of this payment when they were a couple.

Note: if Amy receives a top-up as a result of reconciliation after the date of separation, policy allows Amy to retain this payment.

Each claimant's share of FTB will depend on the care arrangements while the couple were partnered. The claimants may agree on the percentage of care they had for each FTB child, providing the percentages add to 100%. In situations where the claimants do not agree on the percentage of care, an assessment of their actual care arrangements for the past period will be made (the methodology for calculating the percentage is the same as any other shared care case).