1.2.8.10 FTB Advance Payments - Details

FTB advances & deferral of FTB

An individual who has received an advance can, like other instalment individuals, choose to defer their FTB Part A. The legislative rate of FTB Part A for an individual with an advance arrangement in place is the ongoing instalment of FTB Part A payable after the advance reduction has been applied. This amount is deferred when the individual defers their FTB Part A.

If an individual with an arrangement to defer FTB Part A requests an FTB advance, the advance is to be paid as outlined above. This reduces the amount of FTB Part A that is deferred.

Act reference: FA(Admin)Act section 35E Payment of advance

Policy reference: FA Guide 4.3.1.20 FTB Payment Choices for Instalment Individuals

FTB advances & continuous adjustment

As entitlement to an FTB advance is based on legislative entitlement to FTB Part A, an individual whose FTB has been reduced by continuous adjustment will still be eligible for an advance if their legislative rate of FTB Part A (before the continuous adjustment and after any existing advance rate reductions) entitles them to the minimum advance amount (1.1.M.55). FTB Part A rate reductions following receipt of an FTB advance will be applied prior to any continuous adjustment of the individual's daily rate of FTB.

Act reference: FA(Admin)Act section 31E Continuous adjustment of daily rate of FTB

Policy reference: FA Guide 4.3.1.30 Mandatory Continuous Adjustment of FTB Instalments

FTB advances & non-payment of FTB based on an estimate/non-entitlement to payment of FTB based on an estimate

FTB advances are not available to individuals subject to non-payment of FTB based on an estimate (6.4.3.40). Similarly, an individual who has become Non-entitled to payment of FTB based on an estimate (6.4.3.70) is not entitled to an advance until such time that they become entitled to FTB Part A again.

If an individual's fortnightly rate is being reduced due to the receipt of an advance when they become subject to non-payment of FTB based on an estimate, the individual's FTB Part A entitlement will continue to be reduced as normal. This is because the individual retains legislative entitlement to FTB Part A during this period (similar to deferral of FTB above). In these circumstances the individual's legislative rate of FTB Part A will be less the advance rate reduction. No advance debt is raised. The individual cannot be granted an advance while they are subject to non-payment of FTB based on an estimate, but they can be repaying an advance paid previously. As long as an individual retains legislative entitlement to FTB Part A by instalments, the advance will be repaid from these instalments and an advance debt will not be raised. Where the non-payment of FTB based on an estimate is lifted, any FTB Part A top-up paid to the individual will be based on the individual's legislative rate as reduced by the advance repayment.

If an individual receives an advance and subsequently becomes non-entitled to payment of FTB based on an estimate during the repayment period, an advance debt for the balance of the unrepaid portion of the advance will be raised as the individual has lost legislative entitlement to FTB Part A.

Act reference: FA(Admin)Act Part 3 Division 1 Subdivision CA-Non-payment of family tax benefit for non-lodgement of tax returns, section 35A(2)(d) …on the advance assessment day…, section 71A Debts arising in respect of FTB advances

Policy reference: FA Guide 6.4.3.40 Non-payment of FTB Based on an Estimate, 6.4.3.60 Removal of Non-payment of FTB Based on an Estimate, 6.4.3.70 Non-entitlement to FTB Based on an Estimate Due to 3 or More Non-Lodger Decisions

FTB advances & bereavement

Bereavement payments, whether taken as a lump-sum or instalments, may be subject to advance rate reductions. As per topic 7.6, an FTB advance debt is generally only raised where the individual has lost ongoing legislative entitlement to FTB Part A.

If an individual's only FTB child passes away and the individual elects to receive their bereavement payment by instalments, the individual's FTB Part A entitlement remains at the advance reduced rate throughout the bereavement period. If there is still an amount outstanding at the end of the bereavement period when payments cease, an advance debt is raised for the amount outstanding.

If an individual's only FTB child passes away and the individual elects to receive their bereavement payment as a lump-sum, the lump-sum is based on the individual's advance reduced rate of FTB Part A. Any outstanding amount after the lump-sum is paid is raised as an advance debt.

If an individual's FTB child dies and the individual has other surviving FTB children who attract ongoing entitlement to FTB Part A, an advance debt is not raised after the end of the bereavement period as any outstanding balance continues to be repaid from the individual's ongoing FTB Part A for the remaining child/ren. If the ongoing FTB Part A rate for the remaining child/ren before the advance reduction equals or exceeds the advance reduction amount during the bereavement period, any lump-sum bereavement payment is not affected by the advance repayments (i.e. the advance continues to be repaid from the ongoing payments for the remaining child/ren, not the lump-sum). If the ongoing FTB Part A rate for the remaining children before the advance reduction is less than the advance reduction rate during the bereavement period, a portion of the advance will be repaid from any lump-sum bereavement payment (as the lump sum amount is based on the advance reduced rate of FTB Part A, and is lower than it would have been if there was no outstanding advance).

This means that the advance reduction is first applied to the ongoing payments for the surviving children, and any difference for the bereavement period only is then applied to the lump-sum. Once the bereavement period ceases, the advance reduction decreases to equal the ongoing FTB Part A rate before the advance reduction, and the repayment period will be extended accordingly.

However, the advance reduction applied during the bereavement period should not exceed the standard reduction (or if a different reduction amount was nominated, that nominated amount). This means that if:

  • an individual's ongoing FTB Part A rate for the remaining child/ren is less than the standard (or nominated) reduction amount, and
  • the remaining portion of the reduction is applied to the bereavement lump-sum, and
  • the individual's FTB Part A rate increases during the bereavement period, then the reduction applied to the ongoing FTB Part A payments will not increase during the bereavement period.

Example: Carl and Janice have 2 children, Diana and Noah. They are receiving FTB Part A at a daily rate of $4.00 before any advance reduction, and are repaying an FTB advance at a reduction of $2.50 per day, making their daily rate $1.50. Diana passes away and Carl and Janice elect to receive their bereavement payment as a lump-sum. The ongoing FTB Part A rate for Noah is now $2.00 per day, and as this is less than the advance reduction amount of $2.50 per day, the difference ($0.50) is applied to the bereavement lump-sum, making the ongoing payments for Noah $0.00.

Due to a change in circumstances, the ongoing FTB Part A rate for Noah then increases during the bereavement period to $3.50 per day before any advance reduction ($1.50 per day after the advance reduction). However, the advance reduction applied to the ongoing payments will not increase as the daily reduction amount of $2.50 has already been applied between the ongoing payments ($2.00) and the bereavement lump-sum ($0.50) for the bereavement period. When the bereavement period ceases, the full advance reduction will be applied to the ongoing payments for Noah, reducing them from $3.50 to $1.00 per day.

However, if the total reduction from the ongoing payments and the lump-sum were less than the standard reduction and the individual's ongoing FTB Part A rate increases during the bereavement period, the advance reduction may also increase. In this situation, the reduction applied to the ongoing payments during the bereavement period may increase prospectively, so that the total reduction applied between the lump-sum and the ongoing payments does not exceed the standard reduction.

Policy reference: FA Guide 3.1.1.40 Calculating FTB Bereavement Payment

FTB advances & income management

100% of FTB advances are subject to income management for individuals in any of the income management categories. An individual's reduced FTB instalment payment will then be subject to income management according to the relevant percentage, meaning that advance rate reductions will be applied before any remaining FTB instalment payments are disbursed to the individual's financial institution and their income management account.

Act reference: SS(Admin)Act Part 3B Income management regime

Policy reference: SS Guide 11 Income Management

Last reviewed: 20 March 2015