Family Tax Benefit (FTB) and income support payment new claim processing interactions 007-20092855

Income support payment current customers who are eligible for FTB are to claim FTB as instalments. FTB current customers have access to 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 are current on income support payment. Exception to this is during employment income nil rate periods (CZR), waiting periods or periods where the pension status is current zero rate (CZR) for reason Home Equity Access Scheme (PLS). During these periods the FTB rate is based on the family's income estimate.

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

Effect of income support entitlement on FTB has 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 stops receiving an income support payment.

If the customer is claiming both FTB and an income support payment, there is no requirement for FTB to be assessed before their income support payment new claim can be finalised.

If the FTB claimant or their partner has also lodged a claim for an income support payment that has not been finalised, where practical the income support payment new claim should be assessed first. An exception to this is if a care determination is required, and the Service Officer is not suitably trained to make the determination.

An Assessment of Care Arrangements referral must be sent using the referral option in Process Direct by claim processing staff not trained in undertaking care assessments if:

• a ‘Details of your child’s care arrangements’ (FA012) form has been requested and returned as part of a Low Income Health Care Card (LIC), Foster Child Health Care Card (FST) or Commonwealth Seniors Health Card (CSHC) claim, or
• the customer has indicated in their income support payment claim that there has been a change of care or shared care, and a care determination has not yet been made

Note: the referral must not be used for a newborn child where the Newborn Child Declaration (FA081) has been received. Service Officers can update the new child’s details when processing the income support payment claim.

If an Assessment of Care Arrangements is required, the assessment must be completed before the claim can be finalised. When a referral is required, staff using Process Direct select the referral type Assessment of Care Arrangements, which will generate a work item.

The Assessment of Care Arrangements work item will be allocated to appropriately trained Families staff for action.

Families claims including FTB, Paid Parental Leave (PPL), Dad and Partner Pay (DAP) and combined FTB/PPL claims that have been cancelled must be reindexed. This includes where the activity was cancelled to allow another claim to be processed in Process Direct.

For more information about reindexing families claims, see Pre-processing checks for standalone and combined claims for family assistance and/or Paid Parental Leave payments.