Method 2 applies when an individual'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 individual'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) 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 individual whose ATI exceeds their higher income free area is assessed under Method 2. However, in very limited circumstances, the individual may be entitled to a higher rate under Method 1 than under Method 2. To ensure these individuals 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 22.214.171.124 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).
If a determination has been made under FAAct 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 126.96.36.199 Shared Care Rate for FTB
Last reviewed: 1 July 2013