FTB and Shared Custody: How Split Care Arrangements Affect Your Payments

When parents separate, arranging how children will spend their time between households affects more than just family schedules. Family Tax Benefit payments are directly linked to care percentages, meaning the amount each parent receives depends on how much time children spend with them. Understanding these rules helps separated families navigate FTB entitlements fairly and avoid payment complications.

How Care Percentage Works for FTB

Services Australia calculates FTB based on the percentage of care each parent provides. Care percentage is determined by how many nights the child spends with each parent over a 12-month period, converted to a percentage. A child who spends equal time with both parents has a 50/50 care arrangement, meaning each parent provides 50 percent of care.

The care percentage directly affects how FTB is split between households. If you have 60 percent care, you receive 60 percent of the maximum FTB amount for that child. Your ex-partner receives the remaining 40 percent, assuming they also meet FTB eligibility requirements. This proportional split ensures both households receive support reflecting their actual caregiving responsibilities.

Care percentage thresholds create cut-off points for FTB eligibility. If your care falls below 35 percent (roughly equivalent to less than 128 nights per year), you cannot claim FTB for that child at all. Above 65 percent care (more than 237 nights), you receive 100 percent of the FTB, and the other parent cannot claim.

Understanding Care Percentage Thresholds

The percentage brackets for FTB are designed to reflect meaningful differences in care responsibility. The main thresholds are: less than 35 percent care means no FTB eligibility; 35 to 65 percent care means proportional FTB sharing; and above 65 percent care means full FTB to one parent.

In practical terms, 35 percent care translates to approximately 128 nights per year, or roughly every second weekend plus half the school holidays. The 50 percent mark equals about 182.5 nights, while 65 percent represents approximately 237 nights. These night counts help you estimate where your care arrangement falls.

If both parents have care between 35 and 65 percent, both can claim FTB for the child. Each parent's FTB is calculated separately using their own household income and the child's age-based rate, then multiplied by their care percentage. This means a lower-income parent may receive more FTB dollars despite having the same care percentage as a higher-income ex-partner.

Documenting Care Arrangements

When you apply for FTB with a shared care arrangement, you need to provide details about your care schedule. This can come from a formal parenting plan or court order, or from an agreement you've made directly with your ex-partner. Even informal arrangements are valid for FTB purposes, though having documentation helps resolve any disputes.

Services Australia may contact both parents to confirm the care arrangement. If parents give conflicting information about care percentages, Centrelink will investigate and make a determination. In disputed cases, they consider available evidence including school records, medical appointments, and other indicators of actual care patterns.

Keeping a care diary or calendar can be valuable, particularly if arrangements are informal or change frequently. Note the nights each child spends with you and keep copies of any communications with your ex-partner about care schedules. This documentation helps if questions arise about your care percentage.

When Care Arrangements Change

Care arrangements often change over time as children grow or circumstances shift. Whenever there's a significant change to how much time your child spends with each parent, you need to notify Centrelink. Failing to report changes can result in overpayments (if your care decreased) or underpayments (if your care increased).

A "change of care" for FTB purposes means a shift in the ongoing care pattern that lasts or is expected to last at least 14 weeks. Temporary variations like a child spending extra time with one parent during school holidays don't necessarily require notification if they're part of the regular arrangement. However, if the overall pattern changes, you should report it.

When a change occurs, Centrelink reassesses both parents' FTB. The parent gaining care may receive increased payments, while the parent losing care sees theirs reduced. Payments are adjusted from the date of change, which can sometimes result in a debt if you've been receiving FTB you weren't entitled to.

FTB Part B and Shared Care

FTB Part B works differently from Part A in shared care situations. Part B is designed for single-parent families and single-income couple families. When care is shared, Part B eligibility depends on the care percentage thresholds rather than being split proportionally.

If you have at least 35 percent care, you may be eligible for the full rate of FTB Part B as a single parent, regardless of the exact percentage. However, only one parent can claim Part B for a particular child at any time. If both parents claim, Centrelink will determine who receives it based on care arrangements and other factors.

In equal care situations (close to 50/50), one parent is generally designated as the Part B recipient. This is often determined by which parent is nominated as the primary carer or by agreement between the parents. If you can't agree, Centrelink makes a determination based on your circumstances.

Practical Tips for Separated Parents

Communication with your ex-partner about care arrangements helps avoid FTB complications. When both parents provide consistent information to Centrelink, claims are processed smoothly. Disagreements about care percentages cause delays and may require formal reviews that take time to resolve.

Consider how changes to care arrangements affect both households' FTB payments when negotiating parenting plans. While FTB shouldn't drive parenting decisions, understanding the financial implications helps both parents plan their budgets. Sometimes small adjustments to care schedules can have significant payment impacts.

If you're unsure about your care percentage or how FTB applies to your situation, contacting Centrelink directly provides personalised guidance. They can explain how your specific circumstances affect payments and what happens if arrangements change.

Key Takeaways

• Care percentage determines how FTB is split between separated parents
• Below 35% care means no FTB eligibility for that child
• Between 35% and 65% care, FTB is shared proportionally
• Above 65% care, one parent receives 100% of FTB
• Report care arrangement changes within 14 days
• FTB Part B rules differ from Part A in shared care situations

Shared custody arrangements require separated parents to understand how care percentages affect their FTB entitlements. While the rules add complexity, they're designed to ensure both households receive appropriate support for their caregiving responsibilities. Keeping Centrelink informed of your actual care arrangements ensures you receive your correct entitlement and avoid payment complications down the track.