4.3.3 Instalments Paid by Direct Credit
Payment of FTB by instalments and SBP are generally made by direct credit unless an exemption has been granted. This topic covers direct credit payments and reasons for exemption from the direct credit requirement.
Direct credit requirement
A claim for FTB is not effective unless the applicant either provides bank account details, or makes a statement that they will provide bank account details within 28 days from the day the claim is lodged. This requirement applies to both an individual and an ACO (1.1.A.80).
The claim cannot be determined until the account details have been provided. This means that the applicant cannot be paid even if they have made a statement undertaking to provide account details within 28 days of lodging the claim.
Act reference: FA(Admin)Act section 7A Bank account details or statement to be provided for claims…, section 15A Restriction on determining claim where bank account details not provided, section 47 Payment of SBP
Policy reference: FA Guide 4.2 Claims for FTB
Payment can be made to a:
- credit union, or
- building society.
The individual must maintain the account, either solely or jointly with another person or organisation. This means that the account must have the individual's name, either alone or with another person. It is not sufficient for the individual to have access to another person's account. The following table shows what types of account are acceptable for FTB purposes.
|Type of account||Account acceptable for direct credit?|
|Savings account (debit)||Yes|
|Cheque account (debit)||Yes|
|Debit account with a credit limit, including those with a linked credit card.||Yes
Explanation: Even though the individual is allowed to overdraw the account, it is still a debit account.
|Credit card account
Examples: Visa, MasterCard, Bankcard, Diners Club.
Explanation: Credit card accounts are not directly administered by the issuing financial institution.
Note: An individual may have a credit card which has other accounts linked to it for electronic banking and EFTPOS. The debit accounts linked to the card can still be nominated for direct credit purposes, although the credit card number cannot be used.
Payment to a child's account
Payment cannot be made to an account held by a child if the child is able to withdraw funds independently of the individual in receipt of FTB. In this case, the individual is deemed not to maintain the account.
However, payment can be made to an account:
- held in trust for a child by the individual in receipt of FTB, or
- in the child's name, where withdrawals can only be made by the individual in receipt of FTB. In this case the individual is deemed to be maintaining the account.
Exemptions from direct credit
Note: The following only applies to exemptions from direct credit for FTB by instalment.
An individual who is granted an exemption from the direct credit requirement can be paid by other means.
Example: Payment by other means may occur due to the individual:
- not having a bank account and requires time to obtain and provide the details of the direct credit account, and
- is temporarily disabled or staying in a remote or isolated area (1.1.R.30) and is unable to get access to their account, or
- requires a payment immediately and this cannot be done in time through the direct credit system or does not have a bank account.
When a direct credit exemption ends the Secretary may require bank account details to be provided by the individual. If the individual fails to comply with this requirement within 28 days, the Secretary may determine the individual is not entitled to be paid FTB for any day that the determination was in place.
Act reference: FA(Admin)Act section 7A(4) Exemption from bank account requirement, section 26A Secretary's power to require bank account details, section 27A Variation of instalment entitlement determination…