Apportionment of income/maintenance reduction for Family Tax Benefit (FTB) Part A 007-07060050

FTB Part A may include:

• Standard Part A rate for each FTB child
• Energy Supplement Part A if 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
• Part A supplement, after the end of the relevant financial year

Note: from 1 July 2018, an FTB Part A reduction may be applied to the maximum rate of FTB Part A that can be paid for a child who does not meet FTB immunisation requirements.

When a customer has income above the income free area (i.e. excess income) or maintenance income above the Maintenance Income Free Area (MIFA) affecting their rate of FTB Part A, each component is reduced proportionately. Note: Large Family Supplement (LFS) (if payable before 1 July 2016), Multiple Birth Allowance (MBA) and Newborn Supplement (NBS) are not reduced under Method 1 as they are base rate components.

This means that if a customer loses entitlement to one component, Rent Assistance (RA) for example, the customer's FTB Part A rate may reduce by more than the amount of the RA that was being paid as the income reduction that previously applied to the RA must now be applied to other FTB Part A components.

If a rate needs to be manually calculated, it may be necessary to apportion any income or maintenance income reduction between the components to work out how much of each component the customer is entitled to. Service Officers will normally only need to apportion income and/or maintenance reduction when coding:

• amount of arrears (adjusting system generated amounts)
• manual rates

When a child/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.

This retrospective change in assessment results in the customer having their annualised maintenance income assessed under the Entitlement Method. In most cases, this will result in a decrease in the customer's ongoing rate of FTB Part A. This change in annualised maintenance income can also invoke Mandatory Continuous Adjustment, causing a further reduction to the ongoing rate.

This is not caused by incorrectly entered/ended case data or a system problem, but it can lead to an unintended and unexpected reduction to the customer's ongoing rate. Instances must be reported to the Level 2 Policy Helpdesk for escalation for a workaround to be considered. See the Resources page for a link.