Modified Entitlement Method 277-51080030

Mary has two children and as of 1 July 2006 ex-partner Peter is required to pay Mary $3000 child support per year.

Mary has chosen to have the maintenance income worked out using the Entitlement Method.

Peter regularly pays $250 per month via Child Support, however Peter did not pay any money during 2004 or 2005.

In November 2006 Child Support collects and pays to Mary an amount of $5000 as arrears for 2004 and 2005.

When Child Support advises Centrelink of this arrears payment, annual maintenance income is worked out using both the Entitlement and Disbursement Methods and it is found that the Disbursement Method results in the higher annual maintenance income, and this amount is used to work out the ongoing FTB Part A rate.

Entitlement Method: $3000 annual child support entitlement

Disbursement Method: $5000 + $250 per month (5 months from 1 July to November)

• $250 x 7 months December to 30 July
• $5000 + $1250 + $1750 = $8000 annually
• $8000 for financial year

As the arrears payment Mary received will affect the FTB Part A entitlement for the full financial year, Mary has already received an excess payment of FTB for the period 1 July to November 2006.

As at 1 October 2006, Karen's annual child support entitlement is $4000. Karen is receiving child support payments through Child Support.

Annual maintenance income = $4000 using the Entitlement Method as it is the higher of these two amounts:

• Entitlement Method: $4000 based on annual entitlement from 1 July 2006
• Disbursement Method: $3000 based on disbursements received up to the end of September 2006

Child Support advises on 20 October 2006 that they have decreased Karen's child support entitlement with a date of effect of 1 September 2006. This results in a new assessment:

• Entitlement Method: $2500
• Disbursement Method: $3000

The new annual maintenance income estimate of $3000 is used from 13 October as Karen has been paid FTB up to 12 October.

As at 1 October, Jane's annual child support entitlement is $4000. Jane is receiving child support payments through Child Support.

Annual maintenance income = $6000 using the Disbursement Method as it is the higher of these two amounts:

• Entitlement Method: $4000 based on annual entitlement
• Disbursement Method: $6000 based on disbursements received up to the end of September 2006

Child Support advises on 20 October that they have increased Karen's child support entitlement with a date of effect of 1 September. This results in a new assessment:

• Entitlement Method: $7000
• Disbursement Method: $6000

The new annual maintenance income estimate of $7000 is used from 13 October as Karen has been paid FTB up to 12 October when Child Support information is received on 20 October, and the date of effect of the new child support entitlement is not later than 13 October.

As at 1 October 2006, Gary's annual child support entitlement is $4000. Gary is receiving child support payments through Child Support.

Annual maintenance income = $6000 using the Disbursement Method as it is the higher of these two amounts:

• Entitlement Method: $4000
• Disbursement Method: $6000 based on child support received up to the end of September 2006

Due to nil child support received in October 2006, maintenance income is reassessed after the last Child Support disbursement load for October:

• Entitlement Method: $4000
• Disbursement Method: $2000 based on child support received up to the end of October 2006. This is reduced because the payment for the most recent month is nil and this is used to estimate the amount to be received for the rest of the financial year

The new annual maintenance income estimate of $4000 using the Entitlement Method is used from 29 October, as Gary has been paid FTB up to 28 October at the time of the last Child Support disbursement load for October.