2.7 Entitlement to FTB advance payment
Entitlement to FTB advance
Individuals who receive FTB Part A by fortnightly instalments may request an FTB advance payment. The individual's ongoing FTB Part A payments are then reduced to repay the advance payment.
An individual is entitled to receive an FTB advance if:
- they make an effective request for an FTB advance; and
- on the advance assessment day (1.1.A.55):
- they are entitled to be paid FTB by instalment (1.1.I.100), and
- they have at least one FTB child, and
- their legislative rate of FTB Part A before any existing advance reductions is equivalent to at least the base standard rate for one child aged under 18, and
- the amount of advance that the individual would be entitled to is at least the minimum amount, and
- if determining a regular advance (1.2.8), the previous regular advance was repaid within 182 days, and
- the Secretary considers, on the basis of the information available on the assessment day, that the daily reduction amount to repay the advance will not cause the individual to suffer financial hardship, and
- the individual is not excluded from being paid an FTB advance.
An individual is excluded from being paid an FTB advance if:
- they have not repaid a previous advance payment that was paid to them more than 12 months before the advance assessment day (including old advances that are now being repaid as a notional new advance), or
- they are subject to prohibition of FTB based on an estimate (184.108.40.206), or
- they owe a debt to the Commonwealth which is recoverable under FA(Admin)Act Part 4 by deductions from their FTB instalments.
Debts written-off because they are irrecoverable by law or due to an ex partner non-lodger will not preclude an advance.
When an individual requests an advance and they share the care of their child/ren with another individual, their shared care rate of FTB Part A, before any existing advance reductions, must be equivalent to at least the base standard rate for one child under 18 in order to be eligible for an advance.
An FTB advance cannot be granted to an individual with a regular care child only (220.127.116.11). Where an individual is granted an advance and their children subsequently become regular care children, as long as the individual's annual rate of FTB Part A is greater than nil before any advance reductions (due to still being in receipt of FTB Part A components such as RA), the advance will generally continue to be repaid (subject to 7.6).
Entitlement to, and the maximum amount of, an FTB advance is calculated based on an individual's rate of FTB Part A on the advance assessment day. This rate is the individual's FTB Part A entitlement prior to any existing advance rate reductions being applied. The individual's rate of FTB Part A includes all components such as MBA and RA, but excludes the FTB Part A supplement.
Act reference: FA(Admin)Act section 35A Entitlement to FTB advance, section 34 Form of request, section 35B Regular FTB advances, section 35D Maximum amount of FTB advance payable
Policy reference: FA Guide 18.104.22.168 FTB advance payments - details
FTB advance requests
An FTB advance request can be made in person, via telephone, in writing or online. When a request is made Centrelink makes a determination as to whether to grant the request using the criteria in the section above. Centrelink may seek to obtain additional documentation from an individual in order to determine the request.
An individual may withdraw or vary a request for an FTB advance if the advance has not yet been determined.
Act reference: FA(Admin)Act section 33 Request, section 34 Form of request, section 35 Request may be withdrawn or varied
Assessment of financial hardship
Upon receipt of an application for an FTB advance, an assessment of the individual's ability to afford the applicable rate reduction is made considering their current income and expenses. When there is a question about the individual's capacity to afford the rate reduction following receipt of an advance, a discussion should occur. The purpose of the discussion is to satisfy Centrelink that an application considered 'doubtful' would not result in the applicant suffering hardship during the advance repayment period.
A discussion should generally occur when:
- the income left after deducting expenses does not cover the rate of repayment applicable to the advance amount requested, or
- there have been instances of misrepresentation or problems with repayment of an earlier advance (e.g. reduced or suspended repayment applied), or
- amounts owed (e.g. other financial commitments) are high and may affect capacity to live on reduced fortnightly payments.
When assessing an individual's ability to afford an advance, the following things may be considered:
- assessing hardship, and
- considering changed or reorganised circumstances.
An advance cannot be paid to an individual if there is reason to believe that the reduction in their ongoing FTB Part A rate would result in financial hardship.
The income and expenses stated by the individual should provide sufficient information upon which to base a decision on an individual's capacity to afford the advance, unless the individual:
- states unreasonable amounts, or
- has a history of hardship applications or referrals to external agencies for help, or
- has a history of problems associated with repaying an earlier advance payment.
The individual should have the right of reply before this information is relied on to make a decision.
In addition, if the individual has a current FTB or income support advance with a reduced or suspended repayment arrangement in place, this is taken as an indication of a limited capacity to afford an advance, and subsequent advances should not be granted, including regular advances (1.2.8). A reduced or suspended repayment applied to a previous advance that has been fully repaid may also be an indication of hardship, but will not necessarily preclude eligibility for a further advance.
Accessible family income or amounts owed (which could affect the likelihood of hardship arising) should be considered after calculating the gap between income and expenses. Individuals with debts not owed to the Commonwealth will have their fortnightly net income, minus any other debt repayments, taken into account when assessing affordability.
Generally, rejecting an application for an advance because of affordability should only occur if the individual is not left with enough funds to cover existing regular expenses that are largely beyond their control. In these cases, individuals should be given the opportunity to reorganise their finances to see if they can cope with the reduction. Individuals must explain how any changes are reasonable and achievable. Where the changes are neither reasonable nor achievable, generally the application should be rejected.
Individuals rejected on hardship grounds, who apply again with changed income and expenses, should be treated in the same way as those who choose to reorganise their finances.
If it is determined that the advance amount requested may cause financial hardship, the individual will generally not be entitled to that specific advance amount. However, the individual is able to be granted a lower amount (that is not lower than the minimum amount) if the lower amount would not cause financial hardship. The individual does not have to make a 'new request' for the lower amount.
Individuals whose FTB advance requests are rejected on hardship grounds may be referred to Commonwealth Financial Counselling as appropriate.
Commonwealth Financial Counselling
Existing processes and triggers will be used to identify individuals who receive FTB advance and who may benefit from a referral to Commonwealth Financial Counselling. These referrals operate in the exact same manner as any other referral to Commonwealth Financial Counselling.
However, in addition, families with repeated requests for advances are assessed to see whether they could benefit from financial support and counselling. There is no strict definition of 'repeated advances', but an example might be where an individual requests several advances within a 6 month period and they already have their maximum advance amount outstanding. A referral should also be considered if the individual's request for an advance is rejected or the amount of advance granted is lower than the amount requested.
Example: Ewan calls Centrelink and requests an advance. Centrelink service officer Amy, checks Ewan's eligibility, and discovers that he has had 4 rejected advance requests in the past 6 months as he is still repaying 2 other advances whose combined original amounts equal Ewan's maximum advance amount. Ewan has also attempted to change his FTB payment date twice in the last 6 months, and has recently cancelled all his Centrepay deductions. Amy is unable to grant any further advances, but given the information available on Ewan's record, she suggests he may benefit from a referral to Commonwealth Financial Counselling. Ewan accepts her offer and Amy processes a referral as per normal procedures.
Policy reference: SS Guide 11.1.2 Financial wellbeing support services supporting welfare payments reform
Individuals with a child support debt
In addition to the existing restrictions relating to other recoverable Commonwealth debts, individuals who have an outstanding child support debt being withheld from their FTB instalments on the advance assessment day will be ineligible to receive an FTB advance. This includes individuals who have elected to receive a regular FTB advance (1.2.8).
Act reference: FA(Admin)Act section 227 Payment of deductions to Child Support Registrar, section 35A Entitlement to FTB advance, section 35B Regular FTB advances
Policy reference: FA Guide 7.4 Child support debts
Eligibility for an advance when the care of the FTB child is shared
Where an individual requests an FTB advance and they share the care of a child with another individual, their total FTB Part A rate before any advance repayment must still be equivalent to at least the base standard rate for one child aged under 18.
Policy reference: FA Guide 22.214.171.124 Shared care rate for FTB
Approved care organisations
ACOs are not eligible for FTB advances.
Individual members of blended families are able to claim advances independently of their partners. Such individuals do not need their partner's consent to request an advance. Furthermore, if one member of a blended family has a recoverable debt which makes them ineligible for an advance, this will not make the other member ineligible.
Review & appeal process for FTB advance decisions
The decision not to grant an advance or the determination of the amount of an advance payable can be appealed in the normal manner set out under FA(Admin)Act Part 5.
Policy reference: FA Guide 6.1 Centrelink review & appeal process