The maintenance action test
Child support and Family Tax Benefit are linked in a way that surprises many separated parents. If you care for children from a previous relationship, how you handle child support can decide whether you receive the full Part A rate or only the base rate — even if you receive no child support at all. There are two linked tests: the maintenance action test, which is about whether you tried, and the maintenance income test, which is about what you receive or are entitled to receive.
The action test: try, or be capped at the base rate
If a person or their partner cares for children from a previous relationship, they can apply for a child support assessment through Services Australia. If they do not take reasonable action to obtain child support, or seek an exemption from this requirement, they may receive only the base rate of Part A — $75.60 a fortnight per child — for those children. That cap applies regardless of family income: a low-income parent who has not sought an assessment can be on the base rate while a neighbour on the same income receives the maximum rate. The children affected are only the children from the previous relationship; children of the current relationship are not capped by this test.
Exemptions
An exemption exists where there are circumstances that make it difficult to apply for child support from the other parent, including family and domestic violence, or because the children's parentage is unknown. Services Australia can be contacted on the Families line where such circumstances apply. An exemption is not automatic and it is not permanent by default: it is a decision on the circumstances as they stand, and it should be sought explicitly rather than assumed. Parents who are unsure whether their circumstances qualify should ask, because the cost of not asking is the difference between the maximum rate and the base rate for every fortnight the cap applies.
The income test: 50 cents in the dollar, never below the base rate
Separately, each dollar of maintenance received over the maintenance income free area may reduce the maximum Part A rate by 50 cents for each child attracting maintenance. It does not reduce the base rate, and it does not reduce the rate for children who do not attract maintenance. The free area is $2,080.50 a year for a single parent, or for one of a couple receiving maintenance; $4,161.00 a year for a couple where each partner receives maintenance; plus $693.50 for each additional child. A worked example: a single parent receiving $5,080.50 a year in child support is $3,000 above the $2,080.50 free area, so the maximum rate is reduced by $1,500 a year — 50 cents for each of those dollars — for the child attracting maintenance. The parent is still better off by $1,500 a year overall, because $3,000 of support minus a $1,500 FTB reduction leaves a $1,500 gain; but the gain feels smaller than the assessment, which is exactly why this test confuses people.
What counts, and what to watch
A person's rate may be affected if they or their partner receive child support or spousal maintenance from a former partner, or if they do not take reasonable action to obtain child support. Changes to an assessment, changes in how support is collected, and changes in care can all change the maintenance income test result through the year, with balancing after 30 June. The practical advice is the same as for the income test: report changes promptly, keep the assessment current, and do not let an old assessment or an unclaimed exemption quietly cap the payment at the base rate.