184.108.40.206 Income Test - FTB Part A Method 1
Income test - FTB Part A Method 1
The income test assesses whether an individual and their partner's (1.1.P.30) ATI (1.1.A.20) is greater than the income free area (1.1.I.40). If their income is more than the income free area, the rate of FTB is reduced accordingly.
Act reference: FAAct Schedule 1 clause 3 FTB Rate Calculator - Method of calculating Part A rate
FA(Admin)Act section 20A Indexed estimates, section 20B Indexed actual incomes
Policy reference: FA Guide 1.1.I.85 Indexed income - actual or estimate (FTB)
Reduction after reaching the income free area
When a family's ATI is more than the income free area, their maximum rate of FTB Part A is reduced by 20% of the income excess until the base rate (1.1.B.10) is reached or it reaches nil. This reduction is applied to the maximum rate (1.1.M.26) and results in the individual's income tested rate.
If the income reduction results in a rate that is lower than the base rate, the base rate should be paid.
Note: See 3.1.8 for reduction after reaching the higher income free area and information about paying the higher rate of Method 1 & Method 2.
Individual's in receipt of income support or supplement
If an individual or their partner is receiving a social security pension (1.1.S.90), benefit (1.1.S.60), service pension (1.1.S.30), income support supplement, or DFISA (1.1.D.65), the individual's income excess is nil and they receive the maximum rate of FTB Part A subject only to the maintenance income test. If the pension or benefit being paid to the individual or their partner is cancelled or they are placed on an employment income nil rate period, FTB Part A is no longer payable free of the income test.