3.1.7.20 Estimating Maintenance Income

Summary

The amount of maintenance (1.1.M.10) income an FTB instalment (1.1.I.100) individual is expected to receive for the relevant period (1.1.R.25) during the financial year must be estimated.

Explanation: The actual amount the individual receives will not be known until after the end of the financial year.

The estimated maintenance is then annualised, and the maintenance income test is applied.

Act reference: FA(Admin)Act section 20(3) Determination of rate may be based on estimate, indexed estimate or indexed actual income

Policy reference: FA Guide 3.1.7.30 Application of the Maintenance Income Test

Methods used to estimate maintenance income

There are 2 methods used by Centrelink to estimate an individual's maintenance income. The entitlement method (1.1.E.35) is used to estimate the maintenance income for all individuals who privately collect (1.1.P.130) their maintenance.

Individuals whose maintenance is registered for collection by Child Support have a choice between using the entitlement method, or the disbursement method (1.1.D.100). The default method for Child Support individuals is the entitlement method. From 1 July 2006, FTB individuals whose child support cases are registered for collection by Child Support and are being assessed under the entitlement method will be assessed under the MEM (1.1.M.65).

Individuals who have more than one Child Support collection case can nominate different methods for each case. An individual who has both private and Child Support collection can choose the disbursement method for their Child Support maintenance, but must use the entitlement method for their private maintenance.

Policy reference: FA Guide 3.1.7.21 Maintenance Income - Entitlement Method, 3.1.7.22 Maintenance Income - Disbursement Method, 3.1.7.23 Maintenance Income - Modified Entitlement Method

Reconciliation

After the end of the financial year, the individual's rate of FTB is reconciled, comparing their estimated maintenance income and estimated ATI (1.1.A.20) with the actual amounts. This may result in a credit or debt of FTB.

Policy reference: FA Guide 6.4.2.30 FTB Reconciliation Due to Maintenance Income, 3.2 Adjusted Taxable Income

Last reviewed: 20 September 2016