Method 2 applies when an applicant/recipient's ATI (1.1.A.20) is higher than their higher income free area (1.1.H.10). It applies a 30% reduction on ATI over the higher income free area to the applicant/recipient's maximum rate.
The maximum rate of FTB Part A under Method 2 equals the base rate under Method 1.
Act reference: FAAct Schedule 1 clause 1(2) FTB Rate Calculator - To work out the individual's Part A rate…
FA(Admin)Act section 20A Indexed estimates, section 20B Indexed actual incomes
Policy reference: FA Guide 1.1.I.85 Indexed income - actual or estimate (FTB)
The components are:
An applicant/recipient whose ATI exceeds their higher income free area is assessed under Method 2. However, in very limited circumstances, the applicant/recipient may be entitled to a higher rate under Method 1 than under Method 2. To ensure these applicants/recipients are not disadvantaged, the income and maintenance tested rate calculated using Method 1 and the rate calculated using Method 2 should be compared and the higher of the 2 rates paid.
Policy reference: FA Guide 126.96.36.199 Method 1 - Calculating the Maximum Rate of FTB Part A
An individual's standard rate is the sum of their FTB child rates (1.1.F.57).
Policy reference: FA Guide 188.8.131.52 Current FTB Rates & Income Test Amounts
If a determination has been made under A New Tax System (Family Assistance) Act 1999 section 59 because care of an FTB child is shared, the percentage of care is translated into an FTB shared care percentage which is then applied to the FTB child rate for that child. LFS, however, is not affected by a shared care determination.
Policy reference: FA Guide 184.108.40.206 Shared Care Rate for FTB
Last reviewed: 1 December 2008