6.4.4.10 Reconciliation - Current Partners

Summary

This topic discusses the treatment of current partners (1.1.P.30) in the reconciliation process. It details:

  • the impact of a current partner on the timing of reconciliation,
  • the impact of 1 partner not lodging an income tax return, and
  • the assessment of ATI (1.1.A.20) for periods when the individual (1.1.I.90) was partnered.

A current partner for the purposes of reconciliation is a person with whom the individual was partnered for part of, or for the entire claim period, during the relevant income year (1.1.R.23) and with whom they were still partnered on 30 June of that year (or for CCS, still partnered on the last day of the CCS year).

Impact of a current partner on the timing of reconciliation

For FTB, if both the individual and their current partner are not required to lodge a tax return, reconciliation can occur immediately following the end of the relevant income year provided all the other conditions for reconciliation are met. For CCS, if both the individual and their current partner are not required to lodge a tax return, both individuals are required to notify Centrelink of their actual ATI in order for reconciliation to occur.

If the individual and/or their current partner are required to lodge tax returns for the relevant income year, reconciliation can only occur after their income tax return/s have been lodged and all the other conditions for reconciliation are met.

Example: An individual in receipt of FTB, Rachel is partnered to Steve throughout the relevant income year. Both are required to lodge income tax returns. Steve lodges a return by 1 October in the current lodgement year and actual maintenance income and child-care usage are available at that time. Rachel has not yet lodged her income tax return. No reconciliation of Rachel's FTB entitlement can be carried out until Rachel lodges her income tax return.

Policy reference: FA Guide 6.4.1.30 Reconciliation Process, 6.4.3.10 Valid Reasons for Not Lodging a Tax Return

Tax return/s not lodged by March/April of lodgement year

For FTB, in instances where the individual and/or their current partner are required to lodge an income tax return but have not done so by March/April of the lodgement year (1.1.L.30), the individual will be subject to the non-lodger (1.1.N.33) notice process.

Policy reference: FA Guide 6.4.3 Requirement to Lodge an Income Tax Return

CCS reconciliation conditions not met

An individual fails to meet the reconciliation conditions by not lodging a tax return or, where they are not required to lodge a tax return, by not advising Centrelink of their ATI by lodging a non-lodgement advice to the ATO. These obligations also apply to any partner of a claimant during that financial year.

The first deadline by which reconciliation conditions must be met is 1 year after the end of the financial year in which CCS entitlement (1.1.E.30) was determined - i.e. 1 July following the relevant income year. If the individual (and any partner) does not meet the reconciliation conditions before the first deadline, a debt will be raised for the subsidy that has been paid in relation to the CCS year (i.e. all CCS fortnights (1.1.C.10) that start in the financial year). In addition, determinations of no entitlement (i.e. no CCS payments) will be made from the first deadline until the individual meets the reconciliation conditions.

If an individual meets the reconciliation conditions after the first deadline but before the second deadline, their CCS entitlement will resume from the week in which reconciliation conditions were met.

The second deadline is the end of the second year after the end of the financial year in which CCS entitlement was determined. If reconciliation conditions have not been met by the second deadline, the individual will lose their eligibility for CCS, and recovery will commence for any debt amount that was raised when reconciliation conditions were not met by the first deadline.

Loss of eligibility for CCS will also result in a loss of eligibility for ACCS, if applicable. In order to regain eligibility and entitlement to CCS and/or ACCS, the individual will need to ensure they meet reconciliation conditions for all financial years in which CCS entitlement was determined, before they will be able to make a new effective claim for CCS.

Example 1: Jo received CCS in the 2018-19 financial year. She was partnered with Tom for the whole financial year. Jo lodges a return by 1 October 2019, Tom lodges a tax return in April 2020. Jo's entitlements can now be reconciled and she continues to receive CCS.

Example 2: Trish received CCS in the 2018-19 financial year. She was partnered with Clive for the whole financial year. Trish and Clive fail to lodge tax returns for 2018-19 by July 2020 (the first deadline). Trish loses her entitlement to CCS, so no CCS payments are made to her approved provider on her behalf from 1 July 2020 onwards. A debt is raised by Centrelink for the amount of CCS Trish received in the 2018-19 financial year. The debt amount is raised, but will not be recovered, unless the second deadline is reached without Trish and Clive having met the reconciliation (1.1.R.10) conditions. Trish and Clive lodge their tax returns on 23 July 2020. Trish starts receiving CCS entitlement from the week in which she met the reconciliation conditions and is not entitled to any subsidy for the period 1-22 July 2020. The debt amount raised in relation to the 2018-19 financial year is cancelled.

Assessment of ATI

For individuals with a current partner or an ex-partner, assessment of their family assistance entitlement is carried out by including:

  • only the individual's ATI for any period they were single, and
  • both the individual's and partner's ATI for any period they were a member of a couple (1.1.M.50).

Example: Gayle receives FTB for the whole of the last financial year. She is partnered to Gordon for the period 1 July to 30 September, single for the period 1 October to 31 December, and partnered to Brian for the period 1 January to 30 June. Gayle's actual ATI for this year is $10,000, Gordon's income is $20,000 and Brian's income is $8,000. The ATI for Gayle's FTB for each period is as follows.

Period FTB Part A FTB Part B Child care subsidy
1/7 to 30/9 $30,000 $10,000 $30,000
1/10 to 31/12 $10,000 No income test $10,000
1/1 to 30/6 $18,000 $8,000 (see note) $18,000

Note: FTB Part B is generally assessed on the secondary earner's income for members of a couple. However, an income limit of $100,000 is applicable to the primary income earner in a couple family, and to individuals who are single.

Policy reference: FA Guide 6.4.3 Requirement to Lodge an Income Tax Return

Last reviewed: 2 July 2018