4.3.1.10 FTB Payment Delivery Choices

Summary

This topic outlines the payment options available for FTB. It covers:

• payment options,
• delivery by the FAO,
• payment of FTB Part A instalments,
• delivery choices for individuals who receive FTB by instalment,
• individual or partner receiving income support, and
• FTB Part A and Part B supplements.

Payment options

Delivery by the FAO

The FAO can deliver FTB as a:

• fortnightly instalment, or
• lump sum payment at the end of the income year.

Note: For FTB lump sum claims for the 2009-10 financial year onwards, lump sum payments will not be processed until the claimant (and their partner if they have one) have lodged an income tax return for the same financial year as the claim, or have notified the FAO that they are not required to do so.

If a claimant lodges a combination claim for both a past period and instalments, both the lump sum payment and instalments of FTB are paid by direct credit following determination of the claim.

A stand-alone claim for a past period is effective (1.1.E.10) only after the end of the relevant income year. In this situation, the lump sum can only be paid after the end of the income year.

An individual who receives FTB by instalments must provide their bank account details for the direct credit of FTB unless an exemption has been granted. If an exemption has been granted, FTB may be paid by cheque. The FTB Part A and Part B supplements are not included in the instalment payments as it can only be paid as part of the reconciliation process.

Payment of FTB advances

A portion of FTB may also be paid as an FTB advance. When an individual receives an FTB advance, their ongoing FTB Part A rate is reduced to repay the advance (1.2.8.10).

FTB Payment Delivery Choices may be impacted by the receipt or repayment of an FTB advance.

Act reference: FAAct Schedule 1 clause 5 FTB advance to individual, Schedule 1 clause 25A FTB advance to individual

Policy reference: FA Guide 1.2.8.10 Advance Payment of FTB Instalments

Delivery choices for individuals who receive FTB by instalments

Generally, individuals who receive FTB by instalments can choose to receive their payments fortnightly through the FAO or defer payment of some or all of their FTB until the end of the financial year.

In order to help claimants reduce the chance of being overpaid FTB, a series of options to help families match payments to their circumstances are available under The More Choice for Families initiatives, (see 4.3.1.20).

From 1 July 2009 mandatory continuous adjustment will apply to individuals who receive FTB by instalments where required. Individuals who notify an increased estimate to the FAO, or who have their income estimate or actual income automatically uplifted by the FAO, will have their daily rate of FTB for the remainder of the income year adjusted automatically to avoid or reduce a projected FTB overpayment. Mandatory continuous adjustment also applies where an instalment claimant's estimate of maintenance income is increased during the income year.

Where an individual's rate of FTB is subject to continuous adjustment, any future increase or decrease in the claimant's income estimate for that income year will require re-calculation of the adjustment necessary to their daily rate for the remainder of the income year, based on the revised income estimate.

Families will have the following choices in regard to how they receive their FTB payments under the More Choices for Families deferral options, but cannot use these options to increase fortnightly payments above an amount set by continuous adjustment:

• Deferring payment of one FTB fortnightly payment: Families can receive one FTB payment (Part A or B) as a fortnightly payment and the other as a lump sum payment at the end of the income year.
• Deferring payment of more than base rate FTB Part A: Families can choose to take a base rate FTB Part A payment fortnightly and receive the rest at the end of the year.
• Deferring payment of more than base rate FTB Part A other than RA: Families who receive rent assistance with more than base rate FTB Part A can choose to retain fortnightly payment of their RA and base rate FTB Part A and defer the rest of their more than base rate FTB Part A.
• Deferring FTB Part A other than RA: Families who receive RA with their FTB Part A are able to choose to retain fortnightly payment of their RA and defer the payment of FTB Part A until the end of the year.
• Deferring payment in respect of a dependant child whose income may affect entitlements: Families who have an FTB child with income approaching the income cut-out may defer payment of FTB in respect of that child until the end of the year once the child's income is known.

Note: An individual's payment choice will remain in place until such time as the individual's circumstances are reassessed. If the individual chooses to revoke selected payment choice, any arrear owing will not be paid until after reconciliation unless the individual can provide sufficient detail about financial hardship.

Act reference: FA(Admin)Act section 7A Bank account details or statement to be provided for claims for FTB by instalment to be effective, section 35A Entitlement to FTB advance, section 35C Amount of FTB advance, section 35E Payment of advance

Policy reference: FA Guide 1.2.8 FTB Advance - Description, 4.3.3 Instalments Paid by Direct Credit, 4.3.4 Instalments Paid by Cheque, 4.3.5 Lump Sum Payment through the FAO, 4.3.1.20 FTB Payment Choices for Instalment Recipients, 4.3.1.30 Mandatory Continuous Adjustment of FTB Instalments, 4.4.2.30 Date of Effect Rules - FTB Payment Choices

Individual or their partner is receiving income support

For a claim to be effective, a past period claim for FTB must be combined with an instalment claim for FTB, when an individual or their partner (1.1.P.30) is receiving income support, including a:

• social security pension (1.1.S.90),
• social security benefit (1.1.S.60),
• service pension (1.1.S.30).

The individual or their partner must also have been receiving one of the above-mentioned payment types at any time during the past period for which FTB is being claimed.

The FAO will pay both the lump sum of FTB for the past period and the ongoing FTB instalment payments.

Note: The above conditions do not apply if the individual is no longer entitled to FTB payments based on an estimate (6.4.3.70).

Act reference: FA(Admin)Act section 10(4) Claim must be accompanied by instalment claim in some circumstances

FTB supplements

For individuals who are required to lodge a tax return, the FTB Part A and/or Part B supplement can only be paid after the end of the income year when all relevant tax returns and other income details are available. A recipient (and their partner if they have one) who is not required to lodge a tax return needs to notify the FAO before any FTB supplements can be paid.

Additional conditions may apply to the payment of the FTB Part A supplement for the income year in which a child turns 1, 2, 4 and 5 years. For the income year in which a child turns 1, 2 or 5 years, the supplement for the child may be conditional upon the child meeting immunisation requirements (1.1.I.10). For the income year in which a child turns 4 years the supplement for the child may be conditional on the completion and notification of a health check for the child, if the parent or carer also receives income support (1.1.H.05).

The FTB supplements can only be paid to individuals. This means FTB supplements are not available to ACOs.

Note: If an individual (and their partner if they have one) fail to lodge a tax return by the end of the income year (first lodgement year) following the year of entitlement, then they are no longer entitled to FTB for the relevant income year and any FTB paid for that year will be raised as a debt. This also applies to those who are not required to lodge but who do not notify the FAO of this fact.

Act reference: FAAct Schedule 1 clause 38A Rate of FTB Part A supplement, Schedule 1 clause 31A Rate of FTB Part B supplement, section 61A FTB Part A supplement to be disregarded unless health check requirement satisfied, section 61B FTB Part A supplement to be disregarded unless immunisation requirements satisfied

FA(Admin)Act section 10(4) Claim must be accompanied by instalment claim in some circumstances…, section 28 Variation of instalment and past period entitlement determinations where income tax return not lodged, section 32A FTB Part A supplement and FTB Part B supplement to be disregarded unless and until individual has satisfied the FTB reconciliation conditions

Policy reference: FA Guide 4.2 Claims for FTB

_______________________________________________________

Last reviewed: 2 July 2012