# 3.1.4.10 Method 1 - calculating the maximum rate of FTB Part A

## Summary

This topic provides information about calculating the rate of FTB Part A using Method 1 of the FTB rate calculator.

## When to use Method 1

Method 1 for calculating the maximum rate (1.1.M.26) of FTB Part A applies when a family's ATI (1.1.A.20) is less than the income free area, or greater than the income free area and equal to or less than the higher income free area (1.1.H.10). Their maximum rate of FTB Part A is reduced by 20% of the income excess above the income free area. Where the family's rate is calculated using Method 1 under Step 3 of the Method 2 income test for comparison purposes, a rate reduction of 30% of the income excess above the higher income free area applies.

The income-tested rate of Method 1 cannot go below the base rate of FTB payable.

**Act reference:** FA(Admin)Act section 20A Indexed estimates, section 20B Indexed actual incomes

**Policy reference:** FA Guide 3.1.1.20 Current FTB rates & income test amounts, 1.1.I.85 Indexed income - actual or estimate (FTB)

## Components of maximum rate of FTB Part A using Method 1

The components are:

- the standard rate (Method 1)
- newborn supplement
- ES Part A
- FTB Part A supplement
- multiple birth allowance, and
- rent assistance.

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

From 20 March 2017 ES ceased 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 calculations for grandfathered individuals. See 8.2.

**Policy reference:** FA Guide 3.1.1.20 Current FTB rates & income test amounts, 3.1.4.30 Rent assistance, 3.1.1.25 Current ES Rates

## Maintenance income test

The maintenance income test is only applicable under a Method 1 calculation for FTB Part A.