7.6 FTB advance debts
An FTB advance debt will generally only arise where the individual has lost ongoing legislative entitlement to FTB Part A (e.g. FTB is transferred to the individual's partner, no children in care, the individual dies, income precludes entitlement etc.). However, advance debts also arise where:
- it is established the individual was not entitled to the advance issued (or was entitled to a lesser advance amount)
- at the discretion of the Secretary where the advance repayment period has become unreasonably lengthy due to a reduction in the individual's ongoing FTB Part A rate, or
- a non-lodger determination is made for a period where an individual's FTB Part A rate was reduced to repay an advance.
Ongoing FTB Part A entitlement ceases
Where an individual receives an FTB advance and their ongoing FTB Part A entitlement ceases during the repayment period (1.1.R.33) or entitlement is reduced to nil due to non-compliance with immunisation or health check requirements (2.1.3), any unrepaid FTB advance becomes a debt.
The reduction amount to date is the sum of the daily reduction amounts applied since the repayment period for the advance commenced.
Example: Justin received an FTB advance, but ceased to be entitled to FTB Part A during the repayment period, as his only FTB child left his care. The amount of the advance left unrepaid when he ceased to be entitled to FTB Part A then becomes an advance debt.
Note: This does not apply to circumstances where the individual's FTB is currently at a zero rate due to reductions for a previous advance, FTB payment choices (126.96.36.199) or where the individual is subject to prohibition of FTB based on an estimate (188.8.131.52), as the individual's legislative entitlement is retained while subject to these provisions.
Act reference: FA(Admin)Act section 71A(3) Debt arising during the repayment period for an FTB advance
No entitlement to FTB Part A/overpayment of FTB Part A on advance assessment day
Where a variation or a review varies the individual's FTB Part A entitlement relating to an advance assessment day (1.1.A.55), the decision to grant the advance and the amount issued may be affected by the variation. In this situation, the advance issued is reassessed, and if the individual's correct advance amount is less than the actual advance amount issued, the new amount is taken to be the 'correct amount' (which could be nil). Any difference between the amount issued and the correct amount then becomes an FTB advance debt.
Note: This provision only applies to circumstance changes affecting the FTB Part A rate on the advance assessment day, whether the Secretary becomes aware of these changes as a result of the reconciliation process or otherwise. Therefore this provision does not apply to variations to the individual's FTB Part A rate on the advance assessment day as a result of actual ATI or maintenance income details being received, child income exceeding the income provisions for an FTB child (184.108.40.206) or a non-lodger determination (220.127.116.11).
Act reference: FA(Admin)Act section 71A(1) No entitlement to advance, section 71A(2) Overpayment
Retrospective variation to FTB Part A rate
If it is retrospectively determined for a past period (such as a previous period in the current year, or an earlier income year upon FTB reconciliation) that an individual's FTB Part A rate (including the supplement if relevant) before any advance repayments was actually less than the previous advance repayment amount for any part of the repayment period, but the advance assessment day is unaffected by the determination, this results in an unrepaid amount of the advance.
Note: This includes retrospective assessments due to FTB reconciliation and circumstance debts, but excludes non-lodger determinations.
If the individual remains legislatively entitled in the current year to FTB Part A instalments when the unrepaid amount is identified, then no advance debt will arise. See 18.104.22.168 for further explanation.
If no ongoing legislative entitlement to FTB Part A exists when the unrepaid amount is identified, the unrepaid amount is raised as an FTB advance debt.
Act reference: FAAct Schedule 1 clause 43 Part A rate insufficient to cover reduction-single FTB advance, Schedule 1 clause 44 Part A rate insufficient to cover reduction-multiple FTB advances, Schedule 1 clause 48 Changing the repayment period-recalculation of amount of unrepaid FTB advance, Schedule 1 clause 51 Recalculation of amount of unrepaid FTB advance
FA(Admin)Act section 71A(4) Debt arising due to variation or review after the repayment period for an FTB advance has expired
Policy reference: FA Guide 22.214.171.124 Variations to FTB advance repayment period
Repayment period has become unreasonable
Where an individual receives an FTB advance and, due to a change in estimated income and/or other circumstances, their ongoing FTB Part A rate reduces to below the base standard rate for one child under 18, the Secretary has the discretion to raise any outstanding advance balances as an FTB advance debt. For example, this discretion is exercised where the change in the FTB Part A rate results in the repayment period becoming unreasonably lengthy. If the length of the repayment period exceeds 2 years from the day the Secretary determines the increased repayment period, it could be considered unreasonable and the outstanding advance balance could be raised as an advance debt. Further, if the number of days remaining after recalculation is between 1 and 2 years, the Secretary may also exercise this discretion. However it is recommended that this should only occur after examining an individual's circumstances on an individual basis to determine whether it may be appropriate to continue repayments at the lower rate.
Act reference: FAAct Schedule 1 clause 45 Part A rate insufficient to cover reduction-discretion to create FTB advance debt
FA(Admin)Act section 71A(7) Debt arising due to determination under clause 45 of Schedule 1 to the Family Assistance Act
Non-lodger determination affects advance repayment period
If a non-lodger determination affects a period where an advance was being repaid, then an advance debt is raised for the amount of advance initially repaid during the non-lodger period.
If the individual's non-lodger status is subsequently resolved, the advance debt is taken never to have been an advance debt.