7.3.2.05 Waiver of $1000 - Transitional Arrangements for 2000-01
Under the Family Assistance Estimate Tolerance (Transition) Determination 2001 of 3 October 2001, the first $1,000 of certain FTB and CCB overpayment amounts for 2000-01 were waived under section 102 of the A New Tax System (Family Assistance) (Administration) Act 1999. Section 102 allows the Secretary to waive debts or parts of debts that are included in a class of debts specified by ministerial determination.
The $1,000 waiver applied separately to the first $1,000 of an individual's FTB overpayment due to incorrect estimates of income and/or shared care and the first $1,000 of an individual's CCB overpayment due to incorrect estimates of income and/or child care usage.
Overpayments to which the waiver applied
The transitional waiver applied to overpayments for 2000-01 due to any of the following factors:
- underestimates of ATI provided for payment of FTB by fortnightly instalments and/or CCB by reduced child care fees,
- underestimates of maintenance income provided for payment of FTB by fortnightly instalments,
- underestimates of a child's ATI (where the child's actual ATI exceeded the $7,662 income limit) for FTB by fortnightly instalments and/or CCB by reduced child care fees,
- FTB being paid fortnightly for a child at a percentage higher than the individual's share of care for that child, and
- overestimates of child care usage provided for payment of CCB by reduced fees.
Act reference: FAAct Schedule 3 clause 2 Adjusted taxable income
Application of the waiver
As FTB and CCB are paid to individuals, the $1,000 waiver was applied to individuals.
In cases of blended families or where one member of a couple claimed for part of the year and the other member of the couple claimed for another part of the year, each individual received the benefit of the $1,000 waiver provision.
Example: Natasha and Boris received FTB payments on a 50/50 percentage split as they were a blended family. At reconciliation, they incurred overpayments as they had underestimated their ATI. Natasha had an $800 overpayment and Boris had an $800 overpayment as well. Each overpayment was subject to separate application of the waiver and both Natasha and Boris had their overpayments waived.
If an individual had more than one FTB overpayment or more than one CCB overpayment and the first overpayment was less than $1,000 the residual waiver amount could be applied to the subsequent overpayment/s as long as all overpayments to which the waiver was applied satisfied the waiver conditions.
Example: Naomi had 2 children for whom she received FTB - Rachel and Peter. She was overpaid $560 for the first 6 months of 2000-01 for Rachel because she had 80% care but had been paid for 100% care for that period. She repaid the overpayment when it was detected and subsequently had it waived under the $1,000 waiver provisions. Later she advised that Peter's income for 2000-01 exceeded $7,662 (Peter was 17 and fully in her care). She therefore had been overpaid for the entire 2000-01 income year by $975 for Peter. Because this overpayment also satisfied the $1,000 waiver conditions, $440 of it was waived (i.e. the waiver amount remaining after waiving the shared care overpayment).
The $1,000 waiver did not apply to any overpayments of amounts paid in respect of past period claims made after 30 June 2001.
Act reference: FA(Admin)Act section 102 Secretary may waive debts of a particular class
Application of waiver where overpayment repaid
If an individual had repaid in full an overpayment to which the $1,000 waiver applied, the application of the waiver required that the amount that had been repaid by the individual is refunded to them.
Example: Sharon repaid a $400 shared care FTB overpayment for 2000-01. She had no other FTB overpayments to which the $1,000 waiver applied. The application of the $1,000 waiver to the shared care overpayment meant that the $400 was repaid to Sharon.
If an individual had partly repaid an overpayment to which the $1,000 waiver applied, the waiver was first applied to the amount still outstanding. The remaining waiver amount or the amount repaid by the individual, whichever is less, is paid to the individual.
Example: John was overpaid $800 FTB for his son Michael (aged 17) because Michael's income exceeded the child income limit. John repaid $600 of the overpayment. The $1,000 waiver was applied by waiving the outstanding $200 and paying $600 to John.