Effect of income support entitlement on Family Tax Benefit (FTB) 007-07070010

Receiving an income support payment (ISP) means the customer or their partner receives:

• a social security benefit
• a social security pension, or
• a service pension, income support supplement or veteran payment from the Department of Veterans' Affairs (DVA)

This does not include:

• ISP waiting periods including an Income Maintenance Period (SUS-IMM)
• employment income nil rate periods from 1 July 2018 for certain customers
• from 1 July 2019, periods where the pension status is current zero rate (CZR) for reason PLS (see Home Equity Access Scheme for further details).

ISP customers eligible for FTB are paid FTB fortnightly. They have access to the FTB payment choices to reduce the risk of overpayment due to changes in their circumstances during the financial year.

FTB customers may be exempt from the income test for FTB Part A while the customer or their partner receives an ISP. This is not the case during employment income nil rate periods, ISP waiting periods or periods where the pension status is current zero rate (CZR) for reason PLS. During these periods their FTB rate is based on their family's income estimate.

The FTB Part B income test applies to all partnered ISP customers eligible for FTB Part B. The FTB Part B income test does not apply to single ISP customers. The Part B primary earner income limit does not apply when the customer or their partner receives an ISP.

The Process page contains more information.

Income support payments must be included as taxable income or tax-free pension/benefit in a family's adjusted taxable income.

The FTB rate may be automatically adjusted if the customer or their partner begins or ceases to receive an ISP.

Family assistance and ISP reporting obligations are different. ISP customers must report actual income, not an annual estimate.

Service Officers must discuss income reporting requirements at every opportunity and ensure actual income and income estimates are both updated when required.

If either member of a couple is receiving family assistance, their estimate must include income support payments, employment income and any other components of adjusted taxable income (ATI) (received or expected) for the financial year for both members of the couple.

If either member of the couple is receiving an ISP, the expected payments must also be included in the estimate for family assistance.

If a customer's FTB Part A has been reduced to the base rate because they have failed to satisfy the Maintenance Action Test (MAT), RA can be paid with the income support payment until they satisfy the MAT - this process is automatic.

RA is not payable if FTB Part A has been reduced to the base rate due to maintenance income.

All customers are income tested and are required to provide an income estimate for Child Care Subsidy (CCS), regardless of their ISP status.

If a customer is receiving an ISP and CCS, their estimate must include income support payments, employment income and any other components of adjusted taxable income (ATI) (received or expected) for the financial year.

Child Care Benefit (CCB) for approved care provided before 2 July 2018 was not income tested during periods the customer or their partner was receiving an ISP. Therefore, ISP periods are not subject to income reconciliation.