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4.3.3 Instalments Paid by Direct Credit


Payment of FTB by instalments and baby bonus are made by direct credit unless an exemption has been granted. This topic covers direct credit payments and reasons for exemption from the direct credit requirement.


Direct credit requirement

Unless an exemption is granted, a claim for FTB is not effective unless the applicant either provides bank account details, or makes a statement that they will provide bank account details within 28 days from the day the claim is lodged. This requirement applies to both an individual and an ACO (1.1.A.80).


The claim cannot be determined until the account details have been provided. This means that the applicant cannot be paid even if they have made a statement undertaking to provide account details within 28 days of lodging the claim.


There are a number of advantages to using direct credit of payments rather than issuing cheques:

  • funds are deposited electronically on the due date,
  • funds are available early on the due date through ATMs and EFTPOS,
  • recipients do not pay financial institution charges on direct credit payments, and
  • there are no delays caused by:
    • depositing cheques only during office hours,
    • mail arriving later due to public holidays,
    • cheques being lost or stolen, or
    • providing extra identification when cashing cheques.


Act reference: FA(Admin)Act section 7A Bank account details or statement to be provided for claims for family tax benefit by instalment to be effective, section 15A Restriction on determining claim where bank account details not provided, section 47 Payment of baby bonus or maternity immunisation allowance

Policy reference: FA Guide 4.2 Claims for FTB


Account types

Payment can be made to a:

  • bank,
  • credit union, or
  • building society.


The recipient must maintain the account, either solely or jointly with another person or organisation. This means that the account must have the recipient's name, either alone or with another person. It is not sufficient for the recipient to have access to another person's account. The following table shows what types of account are acceptable for FA purposes.

Type of account

Account acceptable for direct credit?

Savings account (debit)


Cheque account (debit)


Debit account with a credit limit, including those with a linked credit card.


Explanation: Even though the person is allowed to overdraw the account, it is still a debit account.

Credit card account

Examples: Visa, MasterCard, Bankcard, Diners Club.


Explanation: Credit card accounts are not directly administered by the issuing financial institution.


Note: A person may have a credit card which has other accounts linked to it for electronic banking and EFTPOS. The debit accounts linked to the card can still be nominated for direct credit purposes, although the credit card number cannot be used.


Payment to a child's account

Payment cannot be made to an account held by a child if the child is able to withdraw funds independently of the recipient. In this case, the recipient is deemed not to maintain the account.


However, payment can be made to an account:

  • held in trust for a child by the recipient, or
  • in the child's name, where withdrawals can only be made by the recipient. In this case the recipient is deemed to be maintaining the account.


Exemptions from direct credit

Note: The following only applies to exemptions from direct credit for FTB by instalment.


A recipient who is granted an exemption from the direct credit requirement is paid by cheque. Depending on the circumstances, the exemption may be temporary or permanent.


Temporary exemption from payment by direct credit may be granted when the recipient:

  • is temporarily disabled or staying in a remote or isolated area (1.1.R.30) and is unable to get access to their account, or
  • requires a payment immediately and this cannot be done in time through the direct credit system.


Permanent exemption from payment by direct credit may be granted when the recipient:

  • lives in a remote or isolated area,
  • is aged, frail or disabled and unable to get access to their account,
  • is deprived of payment due to a legal or administrative problem, or
  • does not operate an account for cultural or religious beliefs.


If the recipient's circumstances change, the reasons for direct credit exemption may need to be reconsidered. If a temporary exemption has been granted a review should be conducted when the exemption is no longer deemed appropriate.

Example: Carol is granted a temporary exemption as she is travelling interstate when she lodges her claim. Carol's intention is to open an account at her local branch when she arrives home 2 weeks later. A review is noted to follow up the account details before the next payment is made.


When a direct credit exemption ends the Secretary may require bank account details to be provided by the recipient. If the recipient fails to comply with this requirement within 28 days, the Secretary may determine the recipient is not entitled to be paid FTB for any day that the determination was in place.


Act reference: FA(Admin)Act section 7A(4) Exemption from bank account requirement, section 26A Secretary's power to require bank account details, section 27A Variation of instalment entitlement determination where failure to provide bank account details


Last reviewed: 2 July 2012


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Last Edited: 14/06/2012 4:12:17 PM

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