# 1.1.M.26 Maximum rate (FTB)

## Definition

For the purposes of FTB Part A, the maximum rate of FTB is worked out using the appropriate rate calculation method. A higher standard rate applies for Method 1 compared to Method 2 or Method 3.

From 1 July 2016, the FTB Part A supplement is only included in Method 1 or Method 2 calculations where the combined ATI is equal to or less than $80,000 for the relevant income year.

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. Therefore, ES will only be included in Method 1 or Method 2 calculations for grandfathered individuals. See 8.2.

## Method 1

Using Method 1 to calculate the rate of FTB Part A, the components of the maximum rate are:

- standard rate (1.1.S.103), plus
- newborn supplement, plus
- multiple birth allowance, plus
- ES Part A, plus
- FTB Part A supplement, plus
- rent assistance.

The income test and the maintenance income test are applied to the maximum rate to calculate an individual's (1.1.I.90) rate of FTB Part A. If a family's ATI is more than the income free area, but less than or equal to the higher income free area, their maximum rate of FTB part A is reduced by 20% of the income excess.

**Act reference:** FAAct Schedule 1 clause 3 Method of calculating Part A rate

**Policy reference:** FA Guide 3.1.4 FTB Part A Rate Calculation - Method 1, 3.1.7 Maintenance income test

## Method 2

Using Method 2, the components of the maximum rate are:

- standard rate for Method 2, plus
- newborn supplement, plus
- multiple birth allowance, plus
- ES Part A for Method 2, plus
- FTB Part A supplement.

A lower standard rate applies for Method 2 compared to Method 1. The income test is applied to the maximum rate to calculate an individual's rate of FTB Part A. If a family's ATI is more than the higher income free area, their maximum rate of FTB part A is reduced by 30% of the income excess above the higher income free area. This applies both when the family's rate is calculated using Method 2 and when it is calculated using Method 1 under Step 3 of the Method 2 income test.

The maintenance income test is not applied when the rate is worked out using Method 2.

**Act reference:** FAAct Schedule 1 clause 25 Method of calculating Part A rate

**Policy reference:** FA Guide 3.1.8 FTB Part A rate calculation - Method 2

## Method 3

Method 3 applies where a person shares the care of a child with another person, other than their partner, and their share of care is more than 14% but less than 35% and has no other FTB children. The components of the maximum rate are:

- rent assistance

The income test applied under Method 3 is the same as Method 1, however the maintenance income test is not applied and there is no comparison with the base rate because they are not eligible for FTB Part A.