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The amount of maintenance (1.1.M.10) income an FTB instalment (1.1.I.100) recipient is expected to receive for the relevant period (1.1.R.25) during the financial year must be estimated.
Explanation: The actual amount the recipient receives will not be known until after the end of the financial year.
The estimated maintenance is then annualised, and the maintenance income test is applied.
Act reference: FA(Admin)Act section 20(3) Determination of rate may be based on estimate
Policy reference: FA Guide 3.1.7.30 Application of the Maintenance Income Test
There are 2 methods used by the FAO to estimate a recipient's maintenance income. The entitlement method (1.1.E.35) is used to estimate the maintenance income for all recipients who privately collect (1.1.P.130) their maintenance.
Recipients whose maintenance is registered for collection by the CSA have a choice between using the entitlement method, or the disbursement method (1.1.D.100). The default method for CSA recipients is the entitlement method. From 1 July 2006, FTB recipients whose child support cases are registered for collection by the CSA and are being assessed under the entitlement method will be assessed under the MEM (1.1.M.65).
Recipients who have more than one CSA collection case can nominate different methods for each case. A recipient who has both private and CSA collection can choose the disbursement method for their CSA maintenance, but must use the entitlement method for their private maintenance.
Policy reference: FA Guide 3.1.7.21 Maintenance Income - Entitlement Method, 3.1.7.22 Maintenance Income - Disbursement Method, 3.1.7.23 Maintenance Income - Modified Entitlement Method
After the end of the financial year, the recipient's rate of FTB is reconciled, comparing their estimated maintenance income and estimated ATI (1.1.A.20) with the actual amounts. This may result in a credit or debt of FTB.
Policy reference: FA Guide 6.4.2.30 FTB Reconciliation Due to Maintenance Income, 3.2 Adjusted Taxable Income
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Last reviewed: 1 December 2008
