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.

4.9.1 Overview of new financial year assessments

Summary

The purpose of the new financial year assessment process for FTB and CCS individuals (1.1.I.90) is to ensure that CCS individuals and individuals who receive their FTB entitlements through Centrelink as fortnightly instalments are assessed against their current circumstances, including an estimate of their annual ATI (1.1.A.20).

New financial year assessment (NFYA)

Centrelink contacts individuals between April and May of each year by a written notice. The notice requests that the individual provide an estimate of their, and their partner's (1.1.P.30), ATI for the new financial year.

The NFYA letter provides the individual with 2 options to estimate their income:

  • the individual can provide their own estimated ATI, or
  • accept an indexed income estimate determined by Centrelink. The indexed estimate (or indexed actual income, where applicable) is calculated by indexing the individual's most recent estimate by movement in the average weekly earnings.

Note: If an individual fails to respond to the NFYA letter, their rate of FTB, and/or CCS percentage, will be assessed using the indexed estimate amount advised in the letter. If an individual chooses to accept the indexed estimate as provided by Centrelink, or if the indexed estimate is applied by default (because the individual fails to respond), a second indexation process may occur when the individual's actual ATI becomes known. Centrelink will index the individual and/or their partner's actual ATI (as provided by the ATO) by movements in the average weekly earnings. The indexed actual ATI will then be compared to the indexed estimate and the higher amount will be used to determine the individual's FTB rate, and/or CCS percentage.

Through the NYFA process, an estimate of income is ascertained and used to determine an individual's rate of FTB, and/or CCS percentage, from the beginning of the new financial year. In addition, CCS individuals are contacted in June and advised of their CCS percentages for the current financial year and the next financial year.

Act reference: FA(Admin)Act section 20 Determination of rate may be based on estimate, indexed estimate or indexed actual income, section 20A Indexed estimates, section 20B Indexed actual incomes, section 20C Indexed estimates and indexed actual incomes of members of couples, section 31A Variation of instalment entitlement determination to reflect revised adjusted taxable income estimates, section 31C Variation of instalment entitlement determination to reflect indexation of estimate of adjusted taxable income, section 31D Variation of instalment entitlement determination to reflect indexation of adjusted taxable income, section 67DB Determinations when adjusted taxable income is not known, section 67DC Indexed estimates, section 67DD Indexed actual incomes, section 67DE Indexed estimates and indexed actual incomes for members of couples

Policy reference: FA Guide 3.5.1 CCS - combined annual ATI, 4.9.3 Outcomes of new financial year assessments, 1.1.I.85 Indexed income - actual or estimate (FTB)

New FTB claims following the NFYA process

Individuals who make a new claim for FTB by instalments between the issuing of NFYA letters and the end of the current financial year will be provided with a NFYA letter when granted payment. The letter advises of the estimated income amount that will be used to determine the individual's FTB rate in the new financial year. The individual should be encouraged to provide their own estimate at all times. Where the individual is unable to provide an estimate for the new financial year but provides an estimate for the current year, Centrelink indexes the amount and advises the individual of the estimate upon which their payment will be made in the new financial year following the usual notification rules. The individual is given the option to accept the Centrelink estimate or to provide their own estimate for the new financial year.

Policy reference: FA Guide 4.9.3 Outcomes of new financial year assessments

New CCS claims following the NFYA process

Individuals who make a new claim (1.1.C.27) for CCS between the issuing of the NFYA letter and the end of the current financial year will be required to give their, and their partner's, estimated ATI for the current financial year, and also their estimated ATI for the new financial year.

Policy reference: FA Guide 3.5.1 CCS - combined annual ATI, 4.9.3 Outcomes of new financial year assessments

FTB recipients included in the NFYA process

All FTB instalment recipients, except single income support recipients and individuals who have already provided a new financial year estimate at the time of the assessment, are contacted as part of the NFYA process.

Explanation: Single income support recipients are not contacted as part of the FTB NFYA process because they are not subject to the FTB income test and therefore receive the maximum rates of FTB Part A and FTB Part B. They may be issued a NFYA letter if they are a CCS recipient.

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