Administering the Maintenance Action Test (MAT) and Maintenance Income Test (MIT) for Family Tax Benefit (FTB) 277-51000000

Services Australia Centrelink administers the:

• MAT to ensure that customers receiving more than the base Family Tax Benefit (FTB) Part A rate for a child do what they can to receive financial support from the parent of a child from a previous relationship
• MIT to determine a customer's FTB Part A rate, taking into account the child support income they and their partner receive
• MIT to determine a customer’s rate of ABSTUDY and Youth Allowance

The terms maintenance and child support are often used interchangeably and generally have the same meaning. Maintenance is a term used by the agency and includes child support as well as support for a partner from a previous relationship (spousal maintenance).

For the MAT, only action for child support for an FTB child is relevant. Action for spousal maintenance is not required, but spousal maintenance is assessable under the MIT.

Any maintenance income received by a customer or their partner is assessed under the MIT. A person who receives maintenance income has more available income, even if their rate of FTB Part A is reduced by the MIT.

A person may continue to receive child support until their child turns 18 years, or upon application until their child finishes secondary school in the year they turn 18. This is regardless of whether or not they continue to receive FTB.

The MAT is applied to customers who claim or receive FTB Part A for a child from a previous relationship. If a customer or their partner is required to take action to obtain child support for a child and they fail to do so, their Part A rate is limited to the base rate for the relevant child/ren.

Reasonable action to obtain child support depends on the person’s circumstances. FTB customers must be advised of what action they need to take and the timeframe for taking action. Reasonable action may include, for example:

• Applying for a child support assessment
• Applying for Child Support collection if unable to make a private arrangement to receive their full child support entitlement
• Seeking legal advice
• Seeking an exemption from taking action to obtain child support. A social worker assessment may be needed, for example exemptions due to fear of family and domestic violence

Specific processes apply when:

• the customer has a child support agreement
• the customer has a court order or court registered agreement
• the paying parent is overseas
• the child was born as a result of a surrogacy arrangement or via artificial conception

MAT codes are used to record what action the customer needs to take or has taken, and whether or not more than base rate FTB Part A can be paid for a child.

Children must be grouped correctly on a customer’s Centrelink record so that the MAT can be correctly applied.

If a customer loses entitlement to child support or chooses to suspend or end their child support assessment, their FTB rate may be affected.

To satisfy the MAT, FTB customers may:

• arrange to receive their child support entitlement directly from the paying parent (known as private collection). or
• ask Child Support to collect their child support entitlement from the paying parent on their behalf (known as Child Support collection)

Private collection

For FTB, it is assumed that private collection customers will receive their full child support entitlement. If a customer advises they are not receiving their full child support entitlement, they may need to apply for Child Support collection (and ask for any child support arrears to be collected).

Child Support collection

FTB customers can choose which assessment method is used during the financial year to estimate their annual maintenance income for a Child Support collection period. If a customer changes the assessment method, their FTB may be affected.

If a customer changes from Child Support collection to private collection, their ongoing FTB rate can be affected.

If a customer advises Centrelink of direct payments from the paying parent (non-agency payment), refer the customer to Child Support.

Maintenance income includes child support and spousal maintenance. It can be received as a payment or the value of a benefit (non-cash-maintenance).

A one-off payment or asset worth more than $1500 may be assessed as capitalised maintenance income.

The MIT is applied when calculating the customer's rate of FTB Part A when child support or spousal maintenance is received.

Estimating annual maintenance income during the financial year

An FTB customer's annual maintenance income is estimated using one of 3 assessment methods:

• Entitlement Method is used for private collection periods
• Child Support collection customers can choose either the Modified Entitlement Method or Disbursement Method. If a customer changes the assessment method being used, their ongoing FTB rate may be affected

A retrospective change in the child support assessment may affect a customer's FTB rate.

FTB reconciliation

Maintenance reconciliation is an automatic process that occurs after the end of the relevant financial year, as part of FTB reconciliation. A customer's annual maintenance income is recalculated based on actual maintenance income received, including their child support entitlement for periods of private collection, and the actual dates of any child support changes. The MAT and MIT are then applied to the customer's income tested FTB Part A rate.

The Maintenance Income Credit (MIC) ensures that customers Child Support collection who receive payments on an irregular basis over more than one financial year receive the same amount of FTB over time as customers who receive child support payments regularly.

Customer complaints about decisions made by the agency are handled through the normal review process. If the complaint is about Child Support, refer the customer to Child Support complaints. Contact details are available in Complaints, see Level 2 Complaints.

Family assistance staff must not disclose personal information to Child Support other than as required or authorised by child support legislation or by consent of the customer. There are protocols for contact between Centrelink and Child Support.