3.1.1.40 Calculating FTB Bereavement Payment

Summary

This topic includes information about calculating an FTB bereavement payment and covers the following:

  • bereavement payments and ACOs,
  • FTB paid in substitution for a deceased individual,
  • continuation of eligibility for a deceased FTB child,
  • application of the maintenance action and maintenance income tests during the FTB bereavement period,
  • exceptions to continuation of eligibility,
  • lump sum bereavement payment,
  • quarterly ES and instalment bereavement payments,
  • quarterly ES and lump sum bereavement payments,
  • 14-week period extends over 2 financial years,
  • 14-week period extends over 2 financial years - past period claim,
  • 14-week period extends over 2 financial years - increase in standard rate,
  • how to calculate a bereavement rate during the 14-week period,
  • how to calculate a lump sum bereavement payment,
  • how to calculate bereavement payment for a past period claim, and
  • FTB advances.

Note: The ES ceased on 20 March 2017 for new FTB recipients. For individuals who became new recipients of FTB after 20 September 2016, they will no longer be paid ES after 19 March 2017. However, eligible individuals and ACOs may continue to be paid ES as part of their FTB rate under grandfathering rules. See 8.2.

If an individual is eligible for FTB for a child and the FTB child dies, the individual is eligible for an FTB bereavement payment. Individuals who receive instalment (1.1.I.100) payments may choose to receive the bereavement payment as a lump sum or as a continuation of their eligibility for FTB for that child. Past period (1.1.P.60) claimants are paid a lump sum.

If a regular care child dies, the individual who receives RA components of FTB for the child may choose to receive the bereavement payment as a lump sum or in instalments.

If the individual is subsequently convicted in relation to the death of the FTB child the total amount received as bereavement payment may become a recoverable debt to the Commonwealth. The payment should not be stopped on the basis of the charges alone as the individual should be afforded the presumption of innocence.

Act reference: FAAct section 31 Continued eligibility for FTB if an FTB or regular care child dies, section 32 Eligibility for a single amount of FTB if an FTB or regular care child dies, section 64 Calculation of rate of FTB for death of FTB or regular care child, section 65 Calculation of single amount for death of FTB or regular care child

Policy reference: FA Guide 2.1.1.110 Death of an FTB or Regular Care Child, 2.2.2 Death of an Individual Eligible for FTB

Bereavement payments & ACOs (1.1.A.80)

ACOs are not eligible for a bereavement payment of FTB when an FTB child of the ACO dies. FTB payments to the ACO will cease from the date of the child's death.

Explanation: The bereavement provisions in the legislation only apply to individuals (1.1.I.90).

FTB paid in substitution for a deceased individual

If an individual was eligible for FTB before they died, and there is an amount of FTB outstanding to the individual, the amount can be paid to someone else if the Secretary considers that individual is eligible. This can include a period of eligibility for FTB even if the deceased individual did not claim FTB before they died. It may also include a bereavement payment for a child if the individual's FTB child died at the same time or before the individual died.

Eligibility is worked out based on the circumstances of the deceased individual, not the circumstances of the individual claiming FTB. The amount payable is the amount the individual would have been paid if they had not died. There is no other payment in respect of the individual's death.

Act reference: FAAct section 33 Eligibility for family tax benefit if an eligible individual dies

Policy reference: FA Guide 2.2.2 Death of an Individual Eligible for FTB

Continuation of eligibility for a deceased FTB child

The FTB bereavement payment is a continuation of eligibility for FTB to an individual for a deceased FTB child for a period of 14 weeks from the day the child died. The individual is generally eligible for the same rate of FTB that would have been paid if the child had not died.

If the deceased child was the only child for whom the individual was entitled to receive maintenance (1.1.M.10) from a particular payer and, at the time of the child's death, that individual's FTB Part A was restricted to base rate as a result of failing the MAT (3.1.5.10), the base rate restriction no longer applies during the bereavement period. Similarly, where an individual was receiving maintenance for the deceased child and the child was the only child for whom they were entitled to receive maintenance from a particular payer, any maintenance received during the bereavement period is disregarded. This is because there is no longer a relevant period (1.1.R.25) for maintenance in these circumstances. The rate of FTB payable is still affected by any other expected changes in circumstances during the 14-week period. In contrast, if the individual is also receiving maintenance from that payer in relation to another child who has not died, any maintenance received during the bereavement period continues to affect the bereavement payment for the deceased child. This is because the relevant period for maintenance continues in these circumstances.

Example: Jane lodges a past period claim for FTB for her child Matthew. Matthew died during the period of the claim, 6 weeks before his 5th birthday. Jane's FTB entitlement includes a bereavement payment for Matthew. The bereavement payment consists of 2 rates - a higher rate of FTB Part B for the first 6 weeks and a lower rate taking into account his 5th birthday for the remaining 8 weeks.

If the individual is receiving FTB instalments, their bereavement payment is paid as a continuation of FTB for 14 weeks for the deceased child unless the individual requests a lump sum payment. If the individual is being paid an adjusted rate of FTB (1.1.A.45), the rate of FTB during the 14-week continuation period is the adjusted rate, unless the individual requests the original arrangement to cease. Any additional entitlement will be calculated after the end of the financial year, when the individual's actual ATI is known.

If the individual is claiming FTB for a past period, the bereavement payment is included in their total lump sum entitlement for the period.

Act reference: FAAct section 31(2) Individual remains eligible for FTB for 14 weeks after the death of the child, section 64 Calculation of rate of FTB for death of FTB or regular care child

Policy reference: FA Guide 2.1.1.110 Death of an FTB or Regular Care Child, 3.1.7.15 Relevant Period

Application of the maintenance action & maintenance income tests during the FTB bereavement period

Whether the MAT and maintenance income test (MIT) are to be applied during the FTB bereavement period depends on several factors including whether the deceased individual was:

  • passing the MAT prior to death, or
  • the only child in a child support case prior to death.

Where the child was the only child in a child support case the payer relevant period ends the day before the bereavement period commences. As there is no longer a child support liability, the child will pass the MAT in the bereavement period. Any child support received for the child after the date of death (i.e. during or after the bereavement period) will be ignored for purposes of the MIT.

Note: Where an individual has more than one child in the same child support case and was restricted to base rate for failing the MAT (3.1.5.10), at the time the child died, the relevant period during which the individual is entitled to receive maintenance for the deceased's FTB sibling/s will continue during the bereavement period and the individual would continue to be restricted to base rate during the bereavement period.

Exceptions to the continuation of eligibility

There are 4 exceptions to the continuation of the rate of FTB during the 14-week bereavement period.

The period of payment cannot include:

  • if the child had not turned 16, any day on which the child would have been 16 years and the child would not have been a senior secondary school child (1.1.S.27), or
  • if the child was aged over 16 years, any day on which the child would have ceased to be a senior secondary school child, or
  • if the child was aged 19 years and was a senior secondary school child, 31 December of the calendar year in which the child turned 19, or
  • if the child was overseas and their expected return date was more than 6 weeks in the future, any day which exceeded the initial 6-week absence.

Example: Sarah has been receiving FTB for her son David, who has been studying full-time toward his year 12 certificate. On 3 December, 2 weeks before the date he was expected to complete his year 12 certificate, David dies in an accident. As it was expected that David would have completed his year 12 certificate on 17 December, Sarah is entitled to receive her bereavement payment for David for the 4-week period until the end of December. As David would have ceased to be a senior secondary school child (1.1.S.27) and consequently ceased to be an FTB child from 1 January of the following year. Sarah's bereavement payments ceases on 1 January.

Note: A child does not cease to be an FTB child during the 14-week bereavement period in any other circumstances.

Act reference: FAAct section 31(3) 14 weeks reduced in certain circumstances

Policy reference:FA Guide 3.1.1.20 Current FTB Rates & Income Test Amounts

Lump sum bereavement payment

An individual may request to have their bereavement payment paid as a lump sum instead of as a continuation of entitlement for the deceased child. The lump sum period begins on the day the individual requests the lump sum payment and finishes at the end of the bereavement period, 14 weeks from the day the child died.

Explanation: The lump sum period does not include the period between the day the child died and the day the individual requests the lump sum payment because the individual's rate of FTB for those days will have already included payment for the deceased child. If the individual was receiving an adjusted rate of FTB (1.1.A.45), the lump sum payment is calculated based on the adjusted rate, unless the individual requests the original arrangement to cease.

Act reference: FAAct section 32(1) Eligibility for a single amount of FTB if an FTB or regular care child dies - Instalment case, section 65(1) Calculation of single amount for death of FTB or regular care child - Instalment case

Quarterly ES & instalment bereavement payments

If an individual is entitled to a bereavement payment by instalment for a child, and has an ES quarterly election in place, the bereavement entitlement would continue to exclude ES. After the end of any affected quarters the ES review would calculate the extra amount of the ES bereavement payment for days in that quarter (including the days in that quarter that the deceased child is taken to be an FTB child).

If there are no other surviving children, the end of the bereavement period would end the ES quarterly election and an ES review would occur as soon as practical following the end of the bereavement period.

An individual may also elect to end the quarterly election at the commencement of the bereavement period.

Quarterly ES & lump sum bereavement payments

If an individual is entitled to a lump sum bereavement payment for a child, and has an ES quarterly election in place, the quarterly election is ended in order to make the lump sum payment. Individuals may not make a new quarterly election until after the end of the bereavement period.

14-week period extends over 2 financial years

If the entitlement to bereavement payment falls over 2 financial years and the individual chooses to receive their payment as a lump sum paid in the first financial year, the bereavement payment is assessed on the individual's ATI for the first financial year.

Explanation: This is done by using the ATI for the first financial year to calculate FTB entitlement for the part of the 14-week period falling in the second of the 2 financial years.

If an individual is receiving FTB instalments and receives the bereavement payment as a continuation of their rate during the bereavement, and the 14-week accrual period overlaps 2 financial years, normal rules apply.

Explanation: Bereavement entitlement for periods during the second financial year is based on ATI for the second year.

Act reference: FAAct section 65(1) Calculation of single amount for death of FTB or regular care child - Instalment case

14-week period extends over 2 financial years - past period claim

If an individual makes a past period claim for an FTB child, and the child died during the financial year, they are eligible for the continuation of eligibility for the 14-week period. If the 14-week period spans 2 financial years, the individual is paid a lump sum for the second of the financial years, based on their ATI of the first of the financial years. The total amount for the past period claim is paid as one lump sum payment. This includes any entitlements to other FTB components (e.g. ES, MBA and RA).

Explanation: A past period claim relates to a single financial year. This provision ensures that entitlement to a lump sum bereavement payment is the same for individuals whether they receive FTB as a lump sum or instalment payments.

Act reference: FAAct section 32(2) Continued eligibility for a single amount of FTB if an FTB or regular care child dies - Other cases, section 65(3) Calculation of single amount for death of FTB or regular care child - Other cases

14-week period extends over 2 financial years - increase in standard rate (1.1.S.103)

The standard rate for FTB Part A and FTB Part B increases on 1 July in line with CPI changes. Where the 14-week period extends over 2 financial years, the new standard rate from 1 July must be applied for the second part of the period.

Explanation: This is the rate that would have applied for the child from 1 July if she or he had not died.

How to calculate a bereavement rate during the 14-week period

Unless an individual requests a lump sum payment, their bereavement payment is paid as a continuation of FTB for 14 weeks for the deceased child.

The individual's rate of FTB is paid for a 14-week period starting from the date of the FTB child's death as though the child did not die. Any changes in rate that would have occurred during this period if the child had not died must still be taken into account:

  • including changes in the assessment of the individual's estimated or actual ATI, and
  • disregarding any FTB child from the day they turn 16 if they are not a senior secondary school child, or from 31 December if aged 19 and a senior secondary school child (see Exceptions to the continuation of eligibility above).

However, if the deceased child was the only child for whom the individual was entitled to receive maintenance, neither the MAT not the MIT would apply during the bereavement period. This is because there is no longer a relevant period for maintenance.

Act reference: FAAct section 31 Continued eligibility for FTB if an FTB or regular care child dies, section 64 Calculation of rate of FTB for death of FTB or regular care child

How to calculate a lump sum bereavement payment

The following table shows how to calculate the FTB rate payable to an individual who receives instalment payments.

Step Action
1 Work out the lump sum period. The lump sum period starts on the day the individual requests the lump sum and ends 14 weeks from the day the child died.
2 Work out the rate of FTB Part A and FTB Part B that would have been payable if the child had not died:
  • including the rate for any other FTB children of the individual, and
  • disregarding any FTB child from the day they turn 16 if they are not a senior secondary school child, or from 31 December if aged 19 and a senior secondary school child, or for any overseas absence in excess of the initial 6-week portability period where the expected return date was more than 6 weeks after the departure date (see Exceptions to the continuation of eligibility), and
  • disregarding the base rate restriction as a result of failing the MAT, if the deceased child was the only child for whom the individual was entitled to receive maintenance from that particular payer, and
  • disregarding any maintenance received during the bereavement period, if the deceased child was the only child for whom the individual was entitled to receive maintenance from that particular payer, and
  • applying the ATI from the first financial year only, if the accrual period spans 2 financial years, and
  • using the standard rate for each FTB child from 1 July to the second part of the period, if the 14-week period spans 2 financial years.
3 Work out the rate of FTB Part A and FTB Part B for the lump sum period:
  • excluding the deceased child, and
  • disregarding any FTB child from the day they turn 16 if they are not a senior secondary school child, or from 31 December if aged 19 and a senior secondary school child, or for any overseas absence in excess of the initial 6-week portability period where the expected return date was more than 6 weeks after the departure date (see Exceptions to the continuation of eligibility), and
  • applying the ATI from the first financial year only, if the accrual period spans 2 financial years, and
  • using the standard rate for each FTB child from 1 July to the second part of the 14-week period, if the accrual period spans 2 financial years.
4 Subtract the result from Step 3 from the result of Step 2
This amount is the lump sum bereavement payment for the deceased child.

How to calculate bereavement payment for a past period claim

If the 14-week period is contained within one financial year, the rate of FTB payable is worked out by continuing the eligibility of the deceased FTB child from the date of death to the end of the 14-week period.

Explanation: The bereavement payment is included with the total amount payable for the past period claim.

If the 14-week period extends over 2 financial years:

  • the bereavement amount for the first financial year is included in the past period by the continuation of eligibility for the deceased child, and
  • a lump sum bereavement amount is worked out for the second of the financial years.

The following table shows how to calculate the lump sum for the second financial year.

Step Action
1 Work out the lump sum period. The lump sum period begins on 1 July and finishes at the end of the 14-week accrual period.
2

Work out the rate of FTB Part A and FTB Part B that would have been payable if the child had not died:

  • including the rate for any other FTB children of the individual, and
  • disregarding any FTB child from the day they turn 16 if they are not a senior secondary school child, or from 31 December if aged 19 and a senior secondary school child, or for any overseas absence in excess of the initial 6-week portability period where the expected return date was more than 6 weeks after the departure date (see Exceptions to the continuation of eligibility), and
  • disregarding the base rate restriction as a result of failing the MAT, if the deceased child was the only child for whom the individual was entitled to receive maintenance, and
  • disregarding any maintenance received during the bereavement period, if the deceased child was the only child for whom the individual was entitled to receive maintenance, and
  • applying the ATI from the first financial year of the 14-week period, and
  • using the standard rate for each FTB child from 1 July to the second part of the period.
3

Work out the rate of FTB Part A and FTB Part B for the lump sum period:

  • excluding the deceased child, and
  • disregarding any FTB child from the day they turn 16 if they are not a senior secondary school child, or from 31 December if aged 19 and a senior secondary school child, or for any overseas absence in excess of the initial 6-week portability period where the expected return date was more than 6 weeks after the departure date (see Exceptions to the continuation of eligibility), and
  • applying the ATI from the first financial year of the 14-week period, and
  • using the standard rate for each FTB child from 1 July to the second part of the period.
4 Subtract the result from Step 3 from the result of Step 2. This amount is the lump sum bereavement payment for the deceased child.
5 The total amount of the past period claim and the lump sum bereavement payment are paid as one lump sum when the claim is determined.

FTB advances

Bereavement payments for a deceased FTB child, whether paid as instalments over a 14-week period or a lump-sum, may be impacted by the receipt or repayment of an FTB advance.

Policy reference: FA Guide 1.2.8.10 FTB Advance Payments - Details

Last reviewed: 8 May 2017