6.6.3 Non-entitlement to FTB Part A &/or FTB Part B due to underestimation of income

Summary

There are exceptions for certain circumstances that will also allow individuals to regain access to FTB based on an estimate and linked benefits where they have lost entitlement due to having 2 consecutive years of zero entitlement. These include where any of the following events occur after the 2 years of zero entitlement. The individual:

• becomes an income support individual
• has a new FTB child come into their care
• separates from their partner
• establishes a rate greater than nil for a more recent entitlement year, or
• resumes their eligibility to FTB.

Generally these will apply automatically when the event occurs or notification of a change of circumstances is provided by the individual in the general course of business. However, exceptions granted under special circumstances category will not be automatic.

An individual can also have multiple exceptions applying to them at once. Therefore if one exception ceases to apply, another may take effect. Exceptions with the most beneficial effect (i.e. earliest date of effect) should be applied first.

Exceptions are also tied to specific consecutive years of non-entitlement.

Income support individual

If at any time after the end of the 2 consecutive zero entitlement years the individual or their partner received a social security pension, a social security benefit, a service pension, veteran payment or income support supplement they will be excepted from non-entitlement. This exception continues to apply even if the individual or their partner has since ceased to be in receipt of any income support payments.

New FTB child

If, since the end of the 2 consecutive years of non-entitlement, an FTB child comes into the individual's care that was not a child in their care at any time during the 2 consecutive years of zero entitlement, this exception will apply.

This provision includes a regular care child (RCC) of the individual who has changed their level of care since the 2 years of non-entitlement and is now deemed to be an FTB child of the individual.

Further, an FTB child coming into care will include individuals who partner since the end of the 2 consecutive years of non-entitlement, with an individual who also has an FTB child.

Couple separates

This exception will apply if, at any time since the end of the 2 consecutive years of zero entitlement, the individual separates from a person who was their partner at the end of the 2 zero entitlement years. This exception will continue to apply even if the individual re partners with a new partner.

However, if the individual reconciles with the person who was their partner at the end of the 2 consecutive zero entitlement years, they will be non-entitled unless a different exception applies.

Greater than nil rate of FTB for later income year

If an individual is found to be entitled to FTB Part A and/or FTB Part B at a rate greater than nil based on actual ATI for a more recent income year since the 2 consecutive years of zero entitlement, this exception will apply.

This may be either through a lump sum or reconciled instalment claim which is for a year that falls any time after the 2 consecutive years of zero entitlement that have resulted in the individual being non-entitled.

Note: Individuals who have been granted an exception due to separation and later establish an entitlement greater than nil can be given a new exception under this category. However, if the individual later re-partners with the original partner they were with when they lost entitlement, and the Secretary is reasonably assured the individual only established entitlement greater than nil due to being single, they will lose their greater than nil rate exception upon their separation exception being revoked and become non-entitled again.

Resumption of eligibility for FTB

If the individual was not eligible for FTB Part A and/or FTB Part B for the whole of an income year (ineligible year) following the 2 consecutive years of zero entitlement, and ineligibility was for a non-income related reason (e.g. they did not have an FTB child), they may qualify for an exception. To test this, the individual must provide Centrelink with a copy of their ATO notice of assessment for the ineligible year. Centrelink will then use this, in conjunction with the individual's current circumstances, to establish whether the individual has any entitlement to FTB on the basis of that income in the current income year. If they do, the exemption will be applied.

Special circumstances

Individuals may also be granted an exception if special circumstances exist in relation to them or their partner that did not exist at the end of the 2 consecutive years of zero entitlement that make it inappropriate to preclude payment of FTB A and/or FTB B based on an estimate. Special circumstances exceptions are not automatic and will be determined on a case by case basis as per the normal special circumstances considerations, but may include events such as becoming disaster affected.