Court ordered periodic child maintenance

Child support and your Family Tax Benefit Part A

Any child support you receive can affect how much Family Tax Benefit (FTB) Part A you get.

If you or your partner receive child support, these payments can affect your FTB. If the amount of child support you receive changes, your FTB payments may change too.

Why you need to apply for child support while you get FTB Part A

Where possible parents should take primary responsibility for the cost of looking after their children. This is why we ask you to apply for child support.

If it’s difficult for you or your partner to apply for a child support assessment, there may be other options. Please call us on the Child Support enquiries line.

We consider a parent to be either a biological or adoptive parent, or a person who’s legally responsible for:

  • a child born through an artificial conception procedure
  • a child born where there’s a surrogacy court order.

Maintenance Action Test

You can meet this test by applying for a child support assessment.

To meet this test, you must try to get child support. This is if you get FTB and care for your child from a previous relationship.

If you both don’t do this you may only get the base rate of FTB Part A for the child.

Maintenance action grace period

You or your partner must take reasonable steps to get child support within 13 weeks of the following. The latest date:

  • the child was born or entered your care
  • you or your partner separated from the child’s other parent
  • your percentage of care increased to 35% or more
  • you or your partner first became eligible to apply for child support.

Child support collection

How you collect your child support payments may impact your FTB and our ability to recover child support underpayments.

You can choose between 3 ways to receive child support:

  • Private Collect
  • Child Support Collect.

Private Collect and FTB

Private Collect is where you and the other parent manage the transfer of payments. We calculate how much child support you should receive.

When we calculate your FTB, we assume you collect your full child support assessment. We don’t look at the amount you actually receive.

We can’t pay you more FTB if you don’t collect the full amount of child support you’re assessed to receive.

If you can’t collect your full amount of child support, call us on the Child Support enquiries line.

If there might be backdated changes to your child support assessment, you may prefer to use Child Support Collect. For example, if the paying parent doesn’t regularly lodge a tax return.

Child Support Collect and FTB

Child Support Collect is where we collect and transfer the payments for you. We work out how much child support you should receive. This option means you don’t have to discuss child support payments with the other parent. There are 2 ways to calculate your FTB:

  • modified entitlement method
  • disbursement method.

You can swap between these methods at any time.

Modified entitlement method

We compare the following:

  • the amount of FTB you would get if you got your full child support assessment
  • the amount of FTB you would get based on the amount of child support you actually receive.

We’ll use which ever results in the most maintenance income to work out your ongoing FTB Part A rate. We do this to reduce the risk of an overpayment.

We’ll use this method unless you ask us to use the disbursement method.

Disbursement method

We work out your FTB Part A rate based on the child support you actually receive in the financial year.

We’ll adjust your FTB rate depending on how often and how much child support you actually receive. This can result in your FTB Part A rate changing throughout the year.

You must ask us before we’ll use this method. It may work for you if either:

  • the amount of child support you receive is substantially less than what you’re assessed for
  • you get irregular payments.

How child support affects FTB Part A

The more child support you and your partner receive or are entitled to, the less FTB you can get.

There are factors that can affect how much FTB Part A you get. These factors include:

  • the amount of child support you receive
  • the way you collect child support
  • if you change how you transfer child support
  • if we update your child support assessment.

Amount of child support

You can receive a certain amount of child support before it affects your FTB. We use a Maintenance Income Test to work this out.

We reduce your FTB by 50 cents for every dollar of child support you receive over the threshold. We call this threshold the Maintenance Income Free Area. We apply these automatically.

Your child support won’t reduce your FTB below the base rate of FTB Part A. However, other factors like your family’s adjustable taxable income may also affect how much FTB you can get.

Example of child support affecting FTB Part A

Sally has a 3 year old child from a previous relationship. Sally’s child support assessment is $5,000 for this year.

The amount of child support over her Maintenance Income Free Area is $5,000 - $1,565.85 = $3,434.15.

We then reduce Sally’s FTB by 50 cents for every dollar of child support over $1,565.85. This is $3,434.15 x 0.50 = $1,717.08.

Sally’s annual FTB Part A payment based on her income and other circumstances is $4,423.80 - $1,717.08 = $2,706.72.

This means Sally’s FTB Part A is now $2,706.72 for the year.

What happens if you change how you transfer child support

If you change how you collect child support, it could impact your FTB Part A. It could also impact our ability to recover underpayments of child support.

From Private Collect to Child Support Collect

You can ask us to collect child support on your behalf. We can collect either:

  • up to 3 months of unpaid child support
  • up to 9 months of unpaid child support in some circumstances.

To collect unpaid child support from periods earlier than this, you can get legal advice about court action. This will be at your own cost.

If you collect child support privately and aren’t receiving the full amount, call us on the Child Support enquiries line. We’ll refer you to a family assistance specialist to talk about collecting on your behalf. They’ll also talk to you about how this may impact your FTB Part A.

From Child Support Collect to Private Collect

If we collect child support for you and you then decide to collect privately, either of the following can happen:

  • we continue to collect any overdue amounts for you
  • you choose to collect any overdue amounts privately.

If you choose to collect overdue child support yourself, we’ll assume you’ve collected the full amount. This may impact how much FTB we’ll pay you.

Call us on the Child Support enquires line first to understand the impact on your FTB.

What happens if we update your child support assessment

If circumstances change for you or the other parent, we’ll update your child support assessment. This means your FTB payments may change too.

Backdated changes to your assessment could impact your past rate of FTB. This may result in us updating your FTB payments using the new information.

Private Collect and backdated changes to your child support assessment

Decrease in child support assessment

If you collect privately and your assessment decreases, meaning you now owe child support, we may have underpaid you FTB.

If the decrease is in the current financial year, we’ll adjust your ongoing rate of FTB. We’ll assess any FTB arrears when we balance your payments.

If the decrease is in a past financial year, we’ll automatically update your FTB payment for those years. If you were underpaid FTB, you may get arrears.

Increase in child support assessment

If you collect privately and your assessment increases, meaning you’re now owed child support, we may have overpaid you FTB.

If the increase is in the current financial year, we’ll adjust your ongoing rate of FTB.

If there‘s an increase you may also have a projected FTB overpayment for the current financial year. In this case we may reduce your FTB further to offset the overpayment.

If the increase is in a past financial year, we’ll automatically update your FTB payment for those years. If we paid you too much FTB, this may result in an overpayment of FTB, or a debt. We’ll start collecting this overpayment straight away. We can also use tax refunds to recover debts.

Child Support Collect and backdated changes in your child support assessment

Decrease in child support assessment

If you use Child Support Collect and your assessment decreases, meaning you now owe child support, we may have underpaid you FTB.

If the decrease is in the current financial year, we’ll adjust your ongoing rate of FTB. We’ll assess any FTB arrears when we balance your payments.

If you’re required to repay a child support overpayment, you can request a review of your FTB. You must request a review within 13 weeks from the date of your overpayment letter. To request a review, call us on the child support general enquiries line.

Increase in child support assessment

If you use Child Support Collect and your assessment increases, meaning you’re now owed child support, we may have overpaid you FTB.

If the change is in the current financial year, we’ll adjust your ongoing rate of FTB.

If there’s an increase you may also have a projected FTB overpayment for the current financial year. In this case, we may reduce your FTB further to offset the overpayment.

If your FTB changes due to your child support assessment changing, we’ll tell you in writing. If you have any questions, call us on the child support general enquiries line.

Example of FTB Part A changing when we update a child support assessment

Yvette collects her child support through Private Collect. We based her past child support assessment on the provisional income of the paying parent, Xavier. This is because he hadn’t lodged a tax return in 3 years.

We got Xavier’s actual income details from the Australian Taxation Office, and his income was higher than the provisional income. The child support assessment for that period changes and Xavier now owes Yvette child support.

Since the amount of child support Yvette was entitled to increased, we reassess her FTB Part A for that period. We do this because we assume she received the child support Xavier owes her. Yvette gets an FTB overpayment of $500. This happens because Yvette’s child support case is Private Collect. We’ll base her FTB on the amount of child support she’s assessed to receive, not the amount she actually collects.

We raise an FTB debt of $500 which Yvette has to start repaying immediately. She can appeal, and ask us to collect child support on her behalf. This can include up to 3 months of unpaid child support.

When you have a child support agreement

If you have a binding child support agreement or a limited child support agreement, we’ll:

  • assess the child support you could receive if the agreement wasn’t in place – this is a notional assessment
  • use this to calculate how much FTB Part A you can get.

If we accepted your agreement before 1 July 2008, we’ll assess your FTB Part A on the actual agreement value.

How we balance your payments

At the end of the financial year, we balance your family assistance payments. This tells us if you got the right amount of FTB.

Private Collect

We balance your FTB Part A based on the amount of child support we assessed you to receive. We can’t pay you more FTB if you didn’t collect the full amount of child support.

If we change your child support assessment then the amount of child support you were eligible for may increase. If this happens we’ll update your FTB Part A. This may happen whether or not you receive the child support owed to you by the paying parent. This could result in an FTB overpayment, or debt, that you need to repay.

Example of how we balance your payment when you’re using Private Collect

When a paying parent lodges a tax return for a previous financial year, we get their actual income details. Their income may be higher than the income we used in the child support assessment. If this happens, the child support payable for that period will go up.

Child Support Collect

We balance your FTB Part A based on the actual amount of child support you received during the financial year. If you received less child support than we assessed you to receive, you may get an FTB top up. If you got more than we assessed you to receive, you may get an overpayment, which we’ll start collecting immediately. We can also use tax refunds to recover the overpayment.

If you don’t use all of your Maintenance Income Free Area, you may access the Maintenance Income Credit. If you have a Maintenance Income Credit we can use this credit to reduce an overpayment. We can only do this if you receive child support arrears.

When your circumstances change

Tell us straight away about any changes that may affect child support. This will help us make sure your assessment is accurate and change it if it isn’t.

You can tell us by either:

If you need help with your Child Support online account, read our online account and Express Plus mobile app guides. Read more about the changes that affect your child support.

Page last updated: 14 November 2018