2.1.1.10 FTB Child

Summary

This topic explains the concept of an FTB child and covers the following:

• FTB child,
• FTB child - general exceptions,
• FTB child exceptions - income provisions,
• the activity test for an FTB child aged 16 to 20,
• study requirements for an FTB child aged 21,
• legal responsibility for an FTB child under 18 (1.1.L.20),
• FTB eligibility for an individual who is imprisoned or confined,
• FTB status for a stillborn child (1.1.S.130),
• FTB child living away from home, and
• FTB child is a member of a couple (1.1.M.50).

This topic applies only to an FTB child of an individual (1.1.I.90). FTB for an ACO (1.1.A.80) is covered in a separate topic.

Where an individual has care of a child for between 14 and 35% of the care period, they have a regular care child. Definition of regular care child is covered in topic, 2.1.1.11.

Where a change of care occurs, a child may be an FTB child of a foster carer. FTB for foster care situations is covered in topic, 2.1.1.85.

Policy reference: FA Guide 2.3 FTB Eligibility for Approved Care Organisations (ACOs)

FTB child

The following table explains the criteria for when an individual is an FTB child of an adult. Where more detail about a criterion is required, the second column indicates where you will find this and the third column indicates the relevant Act reference.

Act reference: FAAct section 22 When an individual is an FTB child of another individual, section 23 Effect of FTB child ceasing to be in individual's care without consent, section 25 Effect of FTB child being in individual's care for less than 35% of a period, section 27 Extension of meaning of FTB or regular care child in a blended family case

Family Assistance and Other Legislation Amendment Act 2011 Schedule 1(6) Application and saving provisions

Policy reference: FA Guide 2.1.2.10 Residence Requirements

FTB child - general exceptions

The following table explains certain limited situations or circumstances that prevent a child who would otherwise be an FTB child of an adult, from being an FTB child. The income provisions are explained separately in this topic.

Note: Relevance to eligibility for MIA. For the purposes of eligibility for MIA for children adopted from outside Australia, some of the above exceptions do not apply and therefore do not prevent a child from being an FTB child (see FAAct section 39(10) and FA Guide 2.5.2 MIA Eligibility & Claiming Provisions - Transitional Arrangements for Children Adopted from Outside Australia).

Act reference: FAAct section 22A(1) Exceptions to the operation of section 22, section 39(10) For the purposes of paragraphs (7)(b), (8)(a) and (b) and (9)(f)...

FTB child exceptions - income provisions

A child cannot be an FTB child if their ATI (1.1.A.20) exceeds the cut-out amount (1.1.C.80). The following table describes how much income an FTB child can have:

Note: The rules that mean that the child income cut-out amount does not apply to senior secondary school children who are not exempt from the FTB activity test only have effect from 1 January 2012. For periods prior to 1 January 2012, the child income cut-out amount applies to all FTB and regular care children aged 16 and over.

If it becomes known that the child's ATI has exceeded or is estimated by the individual as likely to exceed the cut-out amount during the income year, the child is no longer considered to be an FTB child for the period of the income year that the cut-out amount was applicable to the child. Entitlement is reassessed immediately to prevent any further incorrect payments.

A decision that a child's ATI (including estimated income) exceeds the cut-out amount means that it exceeds the cut-out amount for every day in the relevant period of that income year, not just from the point in the year when it first becomes evident that income for the year has exceeded or will exceed the cut-out amount.

If the child is not an FTB child because the estimate of the child's income exceeds the cut-out amount and the child's expected income reduces during the remainder of the income year or actual income for the income year becomes known after the end of that year and is less than the cut-out amount, the adult can request FTB entitlement for that year.

If the individual makes a past period claim and the child's ATI for that income year is more than the cut-out amount for that year, the child is not an FTB child for the period of the income year that the cut-out amount was applicable to the child.

Act reference: FAAct section 22A Exceptions to the operation of section 22, Schedule 3 Adjusted taxable income

FA(Admin)Act section 105 Secretary may review certain decisions on own initiative, section 71 Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

Policy reference: FA Guide 3.1.1.20 Current FTB Rates & Income Test Amounts, 3.2 Adjusted Taxable Income

Activity test for FTB child aged 16 to 20

An individual aged 16 but less than 21 years can be an FTB child only if they satisfy the FTB activity test, or have an exemption from the FTB activity test. The FTB activity test is satisfied if the child has either completed a Year 12 or equivalent qualification, or is undertaking full-time study in an approved course leading to a Year 12 or equivalent qualification, as defined under the Australian Qualifications Framework, or is studying overseas full-time in a course that would result in a level of education that is broadly equivalent to an Australian qualification.

Undertaking full-time study in an approved course of education or study has the same meaning in the A New Tax System (Family Assistance) Act 1999 as in the Social Security Act 1991 section 541B. Studying overseas full-time has the meaning as defined in the Family Tax Benefit (Studying Overseas Full-time) Determination 2011. The FTB child is still considered to be a full-time student during a short break from study where there is a definite intention to return to study. For example, a student aged 16 but less than 21 years who takes a break because of ill health, is still considered a full-time student for FTB purposes if there is an intention to return to study. A 'short break' is considered to be a period of no more than 13 weeks and there must be a clear intention for the child to return to study within that period, evidence for which could include, for example, enrolment details or confirmation from the educational institution. If the break from study is for a longer period, a formal exemption would need to be applied for in relation to the child (see below).

There is also capacity, in limited circumstances, for a determination to be made that a certain number of hours of study per week for the FTB child, averaged over the period that the FTB child is enrolled in the course, constitute that FTB child's normal amount of full-time study. Such a determination is also referred to as an 'adjusted full-time study load' determination. An FTB child may be exempt from the FTB activity test in certain circumstances. These circumstances include where:

• there is no locally accessible approved course, or place available on an approved course of education or study (including any such course available by distance education), or
• there is a locally accessible approved course of education or study (including any such course available by distance education), but the child is not qualified to undertake the course, or
• there is a locally accessible approved course of education or study (including any such course available by distance education), but the child lacks capacity to undertake the course because the child has a physical, psychiatric or intellectual disability or a learning disability such as attention deficit disorder, or
• special circumstances exist that make it unreasonable to require the child to undertake an approved course of education or study.

Act reference: FAAct section 17B FTB activity test

Family Tax Benefit (Studying Overseas Full-time) Determination 2011

Student Assistance (Education Institutions and Courses) Determination 2009 No. 2

Policy reference: FA Guide 1.1.F.53 FTB activity test, 1.1.F.60 Full-time study

Study requirements for FTB child aged 21

An individual aged 21 years can be an FTB child only if they are undertaking full-time study or are studying overseas full-time (1.1.F.60).

The FTB child is still considered to be a full-time student during a short break from study where there is a definite intention to return to study. A short break is generally considered to be for a period of approximately 13 weeks, but this may vary depending on the circumstances and the available evidence relating to the child's intentions to return to full-time study.

Example: A student aged 21 years who takes a break because of ill health, is still considered a full-time student for FTB purposes if there is an intention to return to study.

A short break is not an exemption. There are no exemptions available in relation to full-time study for 21 year olds.

Note: From 1 January 2012, a young person who has turned 22 but who is under 25 as at 31 December 2011 and who is undertaking a course of full-time study as at that date may still be an FTB child of the recipient until they finish their current course of study or they turn 25, whichever is sooner. The young person would need to be wholly or substantially dependent on the adult and the young person's income in the financial year must not exceed the cut-out amount.

Act reference: FAAct section 22(6) Individual aged 21 undertaking full-time study or studying overseas full-time

Circumstances surrounding legal responsibility for an FTB child under 18

The following table provides examples of possible care arrangements for children under 18 years of age:

Policy reference: FA Guide 2.1.1.20 Shared Care & Change of Care Summary, 2.1.1.70 Disputed Care Arrangements, 2.1.1.100 Child at Risk of Harm, 2.1.1.90 Abducted, Absent or Missing Child

FTB eligibility for an individual who is imprisoned or confined

FTB can continue to be paid to an individual who is imprisoned or confined provided their FTB child is still in their care. Consideration must be given to whether a shared care arrangement exists, or if change of care has occurred. There is no time limit on continuing to pay FTB if the child is still in the individual's care.

Example: An imprisoned parent continuing to breast feed her newborn child.

Explanation: The institution may encourage the parent to maintain a close relationship with their child.

Act reference: FAAct section 22(2) Individual aged under 16

Policy reference: FA Guide 2.1.1.20 Shared Care & Change of Care Summary

Stillborn child

A stillborn child cannot be an FTB child. However baby bonus and MIA can be paid for a stillborn child.

A child that is born alive and dies shortly after birth can still be an FTB child.

Explanation: This is known as a neonatal death.

Policy reference: FA Guide 2.4 Baby Bonus Eligibility, 2.5.1 MIA Eligibility

FTB child living away from home

FTB can be paid for a child who is living away from home as long as the adult continues to have responsibility for the care of the child. This situation usually occurs with children living away from home to attend school. Although the adult does not have day-to-day contact with the child, care may continue to be provided.

The individual may be required to provide evidence supporting claims they have responsibility for the care of the child. Evidence of care may include:

• providing for the child financially,
• continuing responsibility for the long-term welfare of the child, and
• the child usually returning home for school holidays.

Example: Emma receives FTB for her 15 year old son Julian who is studying overseas for 2 years towards his year 12 equivalent qualification at a school for the gifted in India. She pays all the school fees and is informed by the school anytime he is sick. Julian returns home for school holidays.

In some circumstances a young person who is living away from home to study may be eligible for YA (see SS Guide 3.2.3.10 Qualification for YA).

Act reference: FAAct section 22(2) Individual aged under 16

FTB child is a member of a couple

It is possible for a person who is a member of a couple (1.1.M.50) to be an FTB child of another adult. However, the circumstances under which this could occur are limited. If the FTB child has a partner, the ATI of both the child and their partner must be assessed when determining whether their combined income is below the cut-out amount.

Example 1: Kate's 17 year old daughter Emma and Emma's boyfriend Kym are living with her. Kym has a part-time job. Emma is 7 months pregnant and has been unable to continue with her study due to difficulties with the pregnancy. Kate has been providing daily care for Emma, who is exempt from the FTB activity test. Emma and Kym's joint income is less than the cut-out amount, and Emma has not claimed a payment in her own right. Kate can claim FTB for Emma.

Example 2: Laurel is receiving FTB for her 18 year old secondary student child Cindy. Cindy moves in with her 20 year old boyfriend Sean who receives YA. Cindy is not qualified for YA as an independent young person until they have lived together for 12 months. Laurel pays Cindy's share of the rent and Cindy returns home in semester breaks. Cindy and Sean's joint income is less than the cut-out amount. Laurel can continue to receive FTB for Cindy while she continues to meet the requirements of the FTB activity test.

Act reference: FAAct section 22(3) Individuals aged 16-17, section 22(4) Individuals aged 18-20, section 22A Exceptions to the operation of section 22, Schedule 3 clause 3 Adjusted taxable income of members of couple

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Last reviewed: 3 January 2012