The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.M.65 Modified entitlement method (FTB)


Under the MEM, an individual's FTB Part A rate is determined using the estimated maintenance income worked out by applying the higher of the entitlement method and the disbursement method formula. The MEM applies where an individual has chosen the Child Support collection ( method and where an individual:

  • has not elected to use the entitlement method ( or disbursement method ( and they are assessed using the entitlement method by default, or
  • has elected to use the entitlement method.

These changes compliment the MIC to take better account of child support arrears when calculating FTB entitlement.

Example: Karim chooses to use the entitlement method and has an annual child support assessment of $1,500. He then starts collecting child support arrears owed for previous financial years (owed $4,000 in arrears).

The MEM activates to apply the disbursement method to take the arrears into account, decreasing Karim's ongoing rate of FTB. If the MEM was not applied, Karim would incur a reconciliation debt at the end of the entitlement year when the additional child support arrears he received are counted.

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 Maintenance income test, Maintenance income - modified entitlement method

Last reviewed: