Mandatory continuous adjustment of Family Tax Benefit (FTB) 007-07060030

If a potential overpayment is identified due to a revised income, the customer's ongoing FTB rate will be automatically reduced. It will be reduced by the daily overpayment rate (possibly to zero rate) for the remainder of the financial year to offset the overpayment.

A potential overpayment may be identified when:

• a customer revises their family income estimate (this includes automatic uplift)
• estimated annual maintenance income is recalculated. This can occur when child support entitlement or disbursement data is transferred from the Child Support Master Program, or when recording actual maintenance income details

Qualification and circumstance debts are not taken into account under MCA. Qualification and circumstance debts are raised when they are identified and normal recovery arrangements made.

FTB payment choices: If a customer chooses to defer part of their annual FTB entitlement under a payment choice, FTB is still subject to MCA. The customer's legislative rate of FTB, not the rate they are receiving, is used to assess whether there is a notional overpayment.

Restoration of FTB entitlement: If a customer has a break in their FTB entitlement and restarts later within the same financial year, the MCA will continue to apply to the customer’s ongoing payments, including to any arrears.

FTB arrears payments may be withheld under MCA if they are for a period a potential overpayment was identified and has not been recovered.

FTB bereavement payments are subject to MCA. The MCA deduction can apply to ongoing instalments or the lump sum payment if the deceased child was the only FTB child (otherwise it only applies to the instalment option).

If a customer claims an income support payment and MCA is in effect, it may be beneficial for the customer to provide a revised estimate in order to recalculate any amount withheld due to a continuous adjustment. The estimate:

• will not be used in the assessment of their FTB for a single income support customer
• can be accepted to recalculate the amount of payment reduction due to MCA as a result of the change in income
• must be reasonable

The MCA calculation does not include Part A or Part B supplements or Single Income Family Supplement (SIFS). These are only payable after the end of the financial year to eligible families.

The MCA assessment process can only be manually switched off if it has not been correctly applied to the customer's rate of FTB. In most cases, the MCA will be applied correctly and cannot be switched off. All cases must be investigated thoroughly; this includes referring to the NNU page and Operational Messages for system advice. If the system is not working correctly and MCA has been incorrectly applied, Service Officers must refer to mySupport for investigation.

There are no hardship provisions if the MCA has been applied correctly. Cases where the customer is requesting MCA be switched off due to financial hardship should not be referred to mySupport or the Families and Childcare Helpdesk.

The following exceptions apply:

• Incorrect coding has caused MCA to apply. For example, an extra zero was added to an income estimate making the estimate $100,000 rather then $10 000; and a DOC is on the record, stating it was a coding error
• When a case end is transferred by Child Support for a child support collect customer on the Disbursement method, the system retrospectively changes the case to private Collect and applies the full maintenance entitlement amount

These cases should be referred to the Families and Childcare Level 2 Policy Helpdesk for approval to have the MCA switched off.

Only Families Override Contact officers granted specific Security Access Management System (SAMS) access can perform this task after receiving approval from the Families and Childcare Level 2 Policy Helpdesk.

The Family Assistance Guide 4.3.1.30 contains an example of an adjustment MCA calculation. See Policy located on the References page.