The Legal Practitioner's Guide
2.3 Effect of agreements on Family Tax Benefit Part A
Family Tax Benefit Part A (FTB A) is paid to many parents receiving child support and may
be adjusted on the basis of child support received. From 1 July 2008, for parents with
agreements, entitlement to FTB A will be based on the child support that would have been
paid if the agreement had not been made. This will apply equally to limited and binding
child support agreements, regardless of the value of the agreement.
The amount of child support that would have been paid if the agreement had not been made
will be calculated via a "notional assessment". This approximates a Part 5 formula
assessment, and can also include variations that could normally be made under Part 6A in
an administrative departure from the formula. Where parents have a limited agreement,
they can request a new notional assessment at any time. For all agreements, a new notional
assessment will be issued if the amount payable under the agreement changes by more
than 15%, or if 3 years has passed since the previous notional assessment was made.
This means that if parents agree to receive a different amount of child support than would
be payable under the formula, their FTB A will not be affected in the same way as before
1 July 2008. Currently their FTB is based on the agreement amount. After 1 July, it will
be based on the notional assessment amount.
Notional assessments also allow parents (particularly with limited agreements) to gain an
idea of how much child support would have been payable if the agreement had not been made,
and therefore to assess the ongoing appropriateness of the agreement when circumstances
change. Further information on agreements and notional assessments is available in
The Guide: CSA Law and Policy
at www.csa.gov.au. Examples of draft clauses are
available in Chapter 5 of this publication.