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Maintenance (1.1.M.10) income for both instalment (1.1.I.100) and past period claims (1.1.P.60) is assessed for the relevant period (1.1.R.25) during the financial year to work out the applicant/recipient's rate of FTB Part A. Maintenance income is estimated for instalment recipients during the financial year. For past period claims, the actual amount of maintenance income received for the relevant income year is used.
The amount of maintenance income to be assessed is converted to an annualised amount before applying the maintenance income test.
Note: If the relevant period is the full financial year, the annualised amount is the full amount received in that financial year. If the relevant period is only part of the financial year, the formula annualises the amount.
The annualised amount of maintenance income is calculated using the following formula:
Example: If $1,000 is received over 70 days, the annualised amount is:
$1,000 x (365/70) = $5,214.28
For the purposes of applying the maintenance income test, a financial year is always 365 days, including leap years.
Act reference: FAAct Schedule 1 clause 20A FTB Rate Calculator - Annualised amount of maintenance income
The appropriate period in an income year for annualising capitalised maintenance income is the part of the capitalisation period that falls within the financial year. The capitalised maintenance income is apportioned using the following formula:
Example: Joanne receives $6,000 capitalised maintenance on 1 March. The capitalisation period is 600 days. The period from 1 March to the end of the income year on 30 June is 122 days so the apportioned amount of maintenance for that period is:
$6,000 x (122 / 600)= $1,220.
The annualised amount for the income year is:
Act reference: FAAct Schedule 1 clause 24 FTB Rate Calculator - Apportionment of capitalised maintenance income
Only assessable maintenance is taken into account under the maintenance income test. Generally, the maintenance income test for FTB Part A is applied as demonstrated in the table below.
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Step |
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1 |
Work out the applicant's/recipient's annualised maintenance income. |
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2 |
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3 |
Subtract the MIFA from the annualised maintenance income amount. The result is the maintenance income excess. If the result is negative or nil, the applicant/recipient's maintenance income excess is nil, and their FTB Part A rate is not reduced for maintenance income. If the result is positive, go to Step 4. |
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4 |
Divide the maintenance income excess by 2 (as the maintenance income excess reduces FTB by 50%). The result is the applicant/recipient's reduction for maintenance income. The reduction for maintenance income is applied when calculating the rate of FTB Part A. |
Where there are child support children and non child support children in the family or the payee has 2 or more child support cases, a maintenance income test (MIT) ceiling must first be determined. The maintenance income is then compared to the MIT Ceiling and the lower of the 2 is used in the MIT calculation.
Where ATI is below the higher income free area (HIFA), the MIT ceiling is calculated as follows:
2 x (above base rate standard amount + RA portion) + MIFA portion
Where ATI is above the higher income free area, the MIT ceiling is calculated as follows:
2 x (maximum rate portion) + MIFA portion
Where the:
Act reference: FAAct Schedule 1 clause 3 FTB Rate Calculator - Method of calculating Part A rate, Schedule 1 clause 20 Effect of maintenance income on FTB rate
Policy reference: FA Guide 3.1.4 FTB Part A Rate Calculation - Method 1
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Last reviewed: 3 May 2010
