Cancellation of Family Tax Benefit (FTB) 007-07090020

Automatic cancellation of FTB occurs following reassessments where no continuing entitlement exists, for example, when a child leaves care. If a change in circumstance is recorded and the customer is no longer entitled to FTB, payment will be automatically cancelled from the date of effect of the change in circumstance.

Payments can also be automatically cancelled without a reassessment. For example, FTB customers who have become partnered, but have not provided their partner's Tax File Number (TFN) will have their FTB payment cancelled if the TFN is not provided or an exemption recorded within 28 days of the date the TFN was requested.

Income support payment (ISP) customers

When a customer's income support payment (ISP) is cancelled or reduced to zero because they have commenced an employment income nil rate period, an automatic request is sent to them for an estimate of their income to confirm their entitlement to FTB. A grace period of 21 days is allowed for them to provide the estimate. If the income estimate is not received by the end of the 21 days, FTB is cancelled with reason 'OIS' (Off income support).

When a customer's family income estimate is identified as unreasonable within an ISP new claim or self service update, that is, their current estimate, is not high enough to cover the ISP paid, an automatic request is sent for a revised estimate. A grace period of 21 days is allowed to provide an acceptable estimate. If a reasonable income estimate is not received by the end of the 21 days, FTB is cancelled with reason 'ENR' (Estimate Not Reasonable).

Manual cancellation occurs when a Service Officer makes a decision to cancel a customer's payment based on the applicable section of Family Assistance Law or Social Security Law and codes the cancellation.

FTB instalment customers may ask to cancel their FTB fortnightly payments to reduce the chance of an overpayment and claim any extra FTB after the end of the income year. These customers should be encouraged to choose the defer FTB Part A and Part B payment choice rather than have their FTB cancelled. They will not need to lodge a claim at the end of the income year and will receive any top-up payment automatically once income tax returns are lodged by the end of the lodgement year.

Note: FTB will continue at a zero rate (CZR-ITH or CZR-IEU) for instalment customers, where the customer has provided a revised family income estimate that reduces the legislative rate of payment to nil. The customer's entitlement will be confirmed at reconciliation.

If they insist on cancellation of FTB in preference to 'current zero rate' or the More Choice for Families payment choices, they should be advised that:

• Rent Assistance (RA) will be cancelled when FTB is cancelled
• RA is not payable with a standalone lump sum FTB claim unless the customer is not entitled to claim ongoing FTB instalments with their lump sum claim. To be paid arrears of FTB and RA, they will need to reclaim FTB as fortnightly payments and complete the FTB Supplement form
• They will need to lodge a claim for FTB and income tax returns before the end of the lodgement year to receive a top-up payment of FTB and avoid a debt for the relevant income year

If the customer is receiving Child Care Subsidy (CCS) they may want to increase their withholdings.