4.4.5.20 Income Tax Return Not Lodged

Income tax return not lodged

Individuals and/or their partners have until 30 June of the lodgement year (also known as the first lodgement year) to lodge an income tax return, if they are required to do so. Where either the individual and/or their partner are required to lodge an income tax return, a decision can be made to the effect that they are not entitled to FTB for the income year for which the required tax return has not been lodged. In that instance the amount already received for that year must be raised as a debt and recovered.

Individuals who are not required to lodge a tax return will also have their FTB entitlement for the relevant income year raised as a debt, if they fail to notify Centrelink that they and/or their partner are not required to lodge an income tax return.

Explanation: An individual's FTB entitlement for the relevant income year is raised as a debt because failure to lodge an income tax return, or failure to notify Centrelink that they are not required to lodge a tax return has the same effect as not being entitled to the payment. This determination only relates to the relevant income year and does not affect an individual's ongoing entitlement to FTB.

Act reference: FA(Admin)Act section 28 Variation of instalment and past period entitlement determinations where income tax return not lodged

Cancellation of entitlement

An individual who fails to lodge a tax return before the income year following the year of entitlement is considered not to have had an entitlement to FTB for the relevant income year. The individual's entitlement for that year must be cancelled and any payments received must be raised as a debt.

A prohibition of FTB instalment payments may apply if an individual and/or their partner fail to lodge an income tax return or inform Centrelink they are not required to lodge (see 6.4.3.40 Non-payment of FTB Based on an Estimate).

Act reference: FA(Admin)Act section 28(2) Consequence of section applying, section 28(6) Consequence where claimant and ex-partner reconcile after separation

Tax return subsequently lodged in the second lodgement year

Where the outstanding tax return is subsequently lodged in the second income year following the entitlement year, the cancellation determination must be varied, taking into account, the newly available assessment of taxable income.

The date of effect of this variation is the date of cancellation. The variation may result in a debt, nil adjustment, or, if an extension has been granted due to special circumstances, a top-up (including supplements).

Tax return subsequently lodged after the second lodgement year

Where the outstanding tax return is lodged after the second income year following the year of entitlement, the cancellation determination must be varied, taking into account the newly available assessment of taxable income. However, the variation may only result in a debt or nil adjustment. No top-ups (including supplements) are payable in this instance.

Act reference: FA(Admin)Act section 28 Variation of instalment and past period entitlement determinations where income tax return not lodged

Last reviewed: 11 May 2015