The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

3.2.8.30 Revised estimates

Introduction

This topic relates to the making of revised income estimates in relation to FTB and CCS where a determination is in force for one or other of those payments. It also relates to revised estimates where a claim for SBP is rejected.

Changing an estimate

For FTB and CCS, individuals (1.1.I.90) may provide a revised estimate of their ATI (1.1.A.20) at any time during the financial year, either in writing, over the phone, or online. The revised estimate must reflect their estimated financial circumstances for the whole of the current financial year.

Where a claim for SBP has been rejected because of the income estimate, the individual's eligibility can be reviewed if the individual provides a revised estimate within 52 weeks of being notified of the rejection. The revised estimate must include the individual's income and, if the individual was partnered on the day the claim was lodged, the income of the person to whom they were partnered on the day the claim was lodged. This means that if the individual has separated since lodging the claim, their former partner's income for the 6-month income test period needs to be included in the revised estimate. If the individual wants to exclude their former partner's income from the income estimate, they need to lodge a new claim within the required timeframes (4.15.1).

In all cases where a revised estimate is provided Centrelink must make a determination on whether the new estimate is reasonable taking into account all available information.

Reason for change in estimate

For FTB and CCS, if the individual wishes to provide an estimate that is lower than their current estimate or the previous year's actual income they will need to give valid reasons for providing the lower figure.

If the estimate is being given over the phone, Centrelink must record the reason together with the amount and the financial year.

Estimate must be reasonable

Centrelink must be satisfied that the new estimate is reasonable, taking into account the reason for the change and the individual's expected financial circumstances for the income year.

Possible reasons for an individual providing a revised estimate could include the individual:

  • changing jobs or starting a new job
  • a change in the number of shifts, overtime, or weekend work
  • going on unpaid leave, such as parental leave
  • receiving or likely to receive a lump sum payment
  • restructuring their business or experiencing a business downturn, or
  • making a superannuation withdrawal.

The individual's explanation of how they calculated the estimate should be consistent with the estimated amount.

Example: If the estimate has reduced, the reason given should be consistent with the reduction in income.

Any discrepancies must be discussed with the individual to see if any of the figures should be changed. The estimate used by Centrelink must be accepted by the individual.

Explanation: Centrelink staff may assist the individual in working out the estimate, however the individual is legally responsible for the estimate and therefore must be satisfied with the figures they provide.

When an individual provides an estimate of their ATI that is not considered to be reasonable, and they are unwilling to discuss with Centrelink reasons for or possible changes to the estimate:

  • In the case of FTB - FTB entitlement (1.1.E.30) must be cancelled. The date of effect of the cancellation is the day after the end of the individual's latest entitlement period.
  • In the case of CCS - the individual's claim (1.1.C.27) should not be cancelled, however, it must be determined that the individual's CCS percentage (1.1.A.70) is zero.
  • In the case of SBP - the estimate cannot give rise to eligibility for SBP.

Application of the new estimate

For FTB and CCS, if the new estimate is considered reasonable it is applied to payments of the individual's FTB or CCS entitlement for the remainder of the financial year. For FTB, the individual's rate of FTB will be calculated on the basis of the new income estimate, but this rate may be reduced to take account of any overpayment of FTB that has notionally occurred in the financial year, following recalculation on the new estimate.

Where the new estimate is provided in the context of a review of the rejection of an SBP claim, if the new estimate is considered reasonable and below the income cut-off, and other eligibility criteria are satisfied, the individual can be paid SBP.

Act reference: FA(Admin)Act section 31A Variation of instalment entitlement determination to reflect revised adjusted taxable income estimates, section 67DB Determinations when adjusted taxable income is not known

FAAct section 36 When an individual is eligible for SBP in normal circumstances

Policy reference: FA Guide 4.3.1.30 Mandatory continuous adjustment of FTB instalments, 4.4.2.20 Changes in income related circumstances, 3.2.8.10 Initial estimate when making a claim, 3.5 CCS entitlement, 3.5.1 CCS - combined annual ATI

Offsetting a fluctuation in income

When an individuals' family income changes during the financial year they may already have received too much FTB and/or CCS. This may create a debt that Centrelink would generally recover after the end of the income year.

To help individuals avoid an end of year debt resulting from an incorrect income estimate, 5% of the weekly CCS entitlement will be withheld. Following reconciliation (1.1.R.10), any outstanding amounts owed to the individual will be paid to them directly as a lump sum. Individuals will also be able to update their income estimate at any time during the year, for example if their circumstances change, and their CCS percentage will be adjusted.

Where an individual who receives FTB by instalment provides an updated income estimate during the income year which changes their rate of entitlement Centrelink will be required to calculate whether a notional overpayment has occurred. If there is an overpayment Centrelink would adjust as necessary the individuals new daily rate of FTB based on the new income estimate for the remainder of the income year to reduce the notional overpayment of FTB which has occurred based on their previous income estimate in the earlier part of the year.

Where an individual's rate of FTB is being adjusted, any future increase or decrease in their income estimate during the income year will require a new calculation of the adjustment to their daily rate of FTB for the remainder of the income year.

Mandatory continuous adjustment also applies to an individual's rate of FTB where an indexed income estimate or indexed actual income is applied during the financial year, and where an individual's maintenance income estimate changes during the current income year.

Act reference: FA(Admin)Act section 31E Continuous adjustment of daily rate of FTB, section 67EB(3) The withholding amount, for a payment …

Policy reference: FA Guide 1.1.R.10 Reconciliation (CCS), 4.3.1.30 Mandatory continuous adjustment of FTB instalments, 6.4.1 Overview of reconciliation, 3.5.4 Calculating CCS entitlement

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