6.4.1.10 Individuals Affected by Reconciliation

Summary

This topic identifies FA (1.1.F.02) individuals (1.1.I.90) who are affected by reconciliation.

FA individuals who receive FA on the basis of ATI and/or maintenance income may be subject to reconciliation. All individuals who receive CCS during the financial year will be subject to reconciliation (1.1.R.10). ACCS entitlement is not reconciled, but if an individual receives both ACCS and CCS during a financial year, the CCS amounts are always reconciled. ATI, maintenance income and/or child care usage may be relevant for FTB by instalment, CCS by fee reduction, or FTB for a past period.

FTB individuals to whom reconciliation does not apply

Certain FTB individuals are not subject to reconciliation of ATI - either because all the relevant actual ATI is known when their FTB claim is determined or because their FTB entitlement is not subject to the income test. These include:

  • single individuals in receipt of income support for the entire period during the relevant income year that they received payment (noting that individuals whose annual income is over $80,000 are not entitled the FTB Part A supplement regardless of whether they are in receipt of income support),
    • Explanation: An individual's entitlement to FTB is not subject to an income test during the period when they and/or their partner receive income support. For periods during which the individual and/or their partner does not receive income support, the income test is applicable.
  • single individuals claiming for a past period in the previous income year,
    • Explanation: A past period claim for a previous income year can be determined only when the individual's actual ATI for that year is known.
  • partnered individuals claiming for a past period in the previous income year where their partner's actual ATI is available at the time the claim is made.
    • Explanation: If a partner's ATI is not available, a past period (lump sum) claim may only be determined using the individual's and the partner's actual income once it is known.
    • Example: Mary lodges an FTB claim on 1 August 2008 for the period 1 July 2007 to 30 June 2008 following lodgement of her tax return. Her partner Bill lodged his tax return in July 2008. Mary is paid FTB on the basis of her and her partner's combined actual 2007-08 ATI of $54,000. There is no reconciliation of ATI.

Act reference: FAAct Schedule 1 clause 28B Adjusted taxable income exceeding $100,000, Schedule 1 clause 38A Rate of FTB Part A supplement, Schedule 1 clause 38L Application of income test to pension and benefit recipients and their partners

FA(Admin)Act section 32C Relevant reconciliation time-first individual must lodge tax return

Policy reference: FA Guide 3.1.1.20 Current FTB Rates & Income Test Amounts

SBP individuals

Individuals who receive SBP may be indirectly subject to reconciliation. Where SBP is paid under the income test, payment is not reconciled. Where SBP is paid under the FTB Part A eligibility test, the SBP is not reconciled directly, but is raised as a debt where FTB reconciliation results in nil FTB Part A entitlement for the day that SBP was paid.

Note: If SBP is raised as a debt due to FTB Part A reconciliation, the individual may still be eligible for SBP for a later date. In this case, a debt is raised for the original payment and the debt is offset by the new SBP entitlement for the later date.

Example: Jane is receiving FTB Part A by instalments for 2 children and gives birth to a stillborn child. Jane does not meet the SBP income test, but is eligible for payment as she is in receipt of FTB Part A. SBP is paid due to Jane's FTB Part A eligibility on the day of the stillbirth. At FTB reconciliation, Jane's ATI is above the FTB Part A threshold. As such, all of Jane's FTB Part A for the relevant year and her SBP are raised as a debt during reconciliation. However, as Jane is still eligible for FTB Part A by instalments as at 1 July of the following year and it is still within 52 weeks beginning on the day of the stillbirth, Jane is now paid SBP due to her FTB Part A eligibility on 1 July. The new SBP is used to offset the debt raised for the original payment, and as the SBP rate had increased on 1 July due to the indexation of NBS rates, the difference is used to offset part of Jane's FTB Part A debt.

Act reference: FA(Admin)Act section 58 Variation where failure to provide tax file number, section 14 Restriction on determining claim where income tax assessment not made

Policy reference: FA Guide 6.4.1.20 Payments Affected by Reconciliation, 6.4.1.30 Reconciliation Process, 6.4.2.10 Verification of Adjusted Taxable Income, 6.4.2.30 FTB Reconciliation Due to Maintenance Income, 2.12 SBP Eligibility

Last reviewed: 2 July 2018