Youth Allowance (YA) and ABSTUDY Parental Income Test (PIT) reviews 110-07060060

An annual Parental Income Test (PIT) review is conducted from September each calendar year to determine dependent Youth Allowance (YA) and ABSTUDY customers’ continuing entitlement to payment.

Annual PIT review letters are issued to dependent YA and ABSTUDY customers except when they:

• are exempt from the PIT, or
• have had taxable income details copied from the parent(s)/guardian(s) Centrelink file via the PIT Copy process
• will turn 22 years of age before the Entitlement Period Start Date (EPSD) of the entitlement period that covers 1 January
• submitted PIT information for a new claim on/after 1 September using the Advise Parental Income (API) online service. In this circumstance, both financial years are collected during the claim process

The system will automatically issue the annual PIT review letter on the customer's next Entitlement Period End Date (EPED), where the customer:

• has their payment cancelled before the annual PIT review letters being issued, and later restored after that date
• claims YA/ABSTUDY after the annual PIT review letters have been issued, and have not provided their parental income details for the current financial year, or
• was previously exempt from the PIT and their exemption stops after the annual PIT review letters have been issued

As part of the annual PIT review process, customers are issued a One Time Access Code (OTAC) and their parent(s)/guardian(s) can respond using the API online service. See Completing Parent(s)/Guardian(s) details for the Base Tax Year and Current Tax Year (MOD JY) for more details.

As the OTAC is linked to the review activity, the parent(s)/guardian(s) can use the OTAC multiple times, until the review has been completed.

When the parent(s)/guardian(s) provides the PIT information to Services Australia for the annual PIT review, the:

• information is assessed, and
• the customer's record is updated

Information returned via the API online service will usually be automatically applied to the customer's record.

If the parental income information is not supplied for an annual PIT review:

• YA customers are:
• issued a reminder notice, 28 days after the initial issue date of the review letter
• suspended 'YAR' (Failed to return PIT review form) if the information is not supplied within 21 days after the reminder notice is issued, unless the parent(s)/guardians(s) request an extension for lodging the review details
• cancelled 'PIA' (Parental income and assets not provided) if the information is not supplied and recorded by 31 December
• ABSTUDY customers:
• are not issued a reminder notice
• will stop to receive any means tested ABSTUDY payments from 1 January, if the information is not supplied and recorded by 31 December

A Change in Circumstance Parental Income Test (PIT) review is conducted when there is a change in a dependent YA or ABSTUDY customer's parent(s)/guardian(s) circumstances. See Changes which may affect the Parental Income Test (PIT) for reasons a Change of Circumstance PIT review may be issued.

The PIT review:

• is issued via the customer's preferred contact channel, and
• includes a One Time Access Code (OTAC). This allows the parent(s)/guardian(s) access to the Advise Parental Income (API) online service

In limited circumstances, customers may also receive a YA/ABSTUDY Current Family Circumstances (SY012E) or Parent(s)/Guardian(s) details (Mod JY) form for completion.

Some PIT reviews will be allocated for manual processing and have no information pre-populated on the NHI screen.

This can occur when:

• there is a mismatch in the parental information
• for example, a change to the parent(s)/guardian(s) relationship status
• taxable income has not been collected through the Advise Parental Income Service (API)

See Step 2 in Assessing Youth Allowance (YA) and ABSTUDY Parental Income Test (PIT) reviews table for processing information.

The PIT does not apply if PIT linked parent(s)/guardian(s) get certain social security benefits, pensions, or Department of Veterans' Affairs payments.

If the parent(s)/guardian(s) payment is suspended or cancelled, the PIT exemption is no longer applied and the system will automatically issue a PIR review.

The PIR review is issued via the customer's preferred contact channel and includes a One Time Access Code (OTAC). This allows the parent(s)/guardian(s) access to the Advise Parental Income (API) online service.

Note: Service Officers must not cancel PIR reviews where the parent(s)/guardian(s) payment has been restored or re-granted, and there is a gap in their entitlement. For example, where a parent's payment is SUS/CAN from 1 September and the payment is either restored, or another payment is granted, from 15 September.

As there is a gap in the PIT exemption between 1 September and 15 September, the dependent YA or ABSTUDY rate of payment must be assessed based on the combined parental income for this period.

The PIT does not apply if PIT linked parent(s)/guardian(s) get certain social security benefits, pensions, or Department of Veterans' Affairs payments.

If the parent(s)/guardian(s) is taken to be receiving their income support payment entirely as a Home Equity Access Scheme loan or during an employment income nil rate period, the PIT exemption is no longer applied for that period, and the system will automatically issue an EIR review.

The EIR review:

• is issued via the customers preferred contact channel, and
• includes a One Time Access Code (OTAC). This allows the parent(s)/guardian(s) access to the Advise Parental Income (API) online service

Note: Service Officers must not cancel EIR reviews.

This is needed:

• in new claims
• when a PIT estimate review date is reached
• if a PIT estimate is unreasonable or doubt exists to the validity of the information given

For PIT reviews, parental taxable income is accepted as actual income where the parent(s)/guardian(s) advise they have received their Notice of Assessment (NOA) issued by the Australian Taxation Office (ATO), and provide the Date of Issue of the NOA via:

• Advise Parental Income (API) service
• MOD JY or SY012, or
• verbally

Parental income details can be verified from the parent(s)/guardian(s) record if actual taxable income is available on the FAO Income for Previous Year (FIPY) screen.

Note: never use estimated income showing on a parent(s)/guardian(s) FIPY screen, that is, income recorded as part of an FAO non-lodgement.

For the parental income test, if the parental income is below the tax-free threshold or they do not need to lodge a tax return, an estimate is recorded as the actual income on the Household Income and Assets (NHI) screen. The parent(s)/guardian(s) must give any taxable or other income details for the relevant financial year.

Note: record details where the parent(s)/guardian(s) is providing verified income. Do not record estimated income where a PIT exemption is recorded.

The parent(s)/guardian(s) will be asked to give:

• an estimate if unable to give the actual taxable income
• the date that evidence of income can be provided

See Assessing and coding parental income for ABSTUDY, Assistance for Isolated Children (AIC) Scheme and Youth Allowance (YA).

PIT review letters are issued at different times based on the customer's circumstances. For:

• YA customers, annual PIT review letters are issued over a 10 day period based on the customer's Entitlement Period End Date (EPED). Generally, these letters are issued from the first Monday after the September ICT Major Release
• ABSTUDY customers, annual PIT review letters are issued on a single day after the September ICT Major Release
• YA and ABSTUDY customers, Change of Circumstance, PIR or EIR PIT review letters are issued, after the change in circumstance occurs on the parent(s)/guardian(s) record, and ripples to the customer's record

The rate of payment for a dependent YA or ABSTUDY customer is based on their parent(s)/guardian(s) financial situation. Generally, the PIT assesses the combined income of the parent(s)/guardian(s) in the base tax year. As the base tax year changes each calendar year, parental income must be updated annually. This information is collected in the annual PIT review.

Depending on the financial situation of the parent(s)/guardian(s), the assessment may take effect from the following dates:

• For YA:
• the payment period that includes 1 January of the next calendar year
• the first payment period ending after 30 September (the entire period of the first pay period ending after 30 September is affected), if parental income has increased to more than 125% of the base tax year income and more than 125% of the parental income free area, or
• date of notification (if there has been a decrease in parental income that will last for a minimum of 2 years)
• For ABSTUDY:
• 1 January of the next calendar year
• 1 October of the current calendar year (if parental income has increased to more than 125% of the base tax year income and more than 125% of the parental income free area), or
• date the decrease occurred (if there has been a decrease in parental income that will last for a minimum of 2 years)

For more information, see Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Scheme.

YA/ABSTUDY PIT reviews cannot be processed when returned incomplete.

When the additional information/evidence is provided, the PIT review can be assessed.

If the additional information is not returned, the Service Officer will suspend the customer's record.

Customers may request an extension for providing the updated parental information. It may be necessary for the PIT review letter to be re-issued.

When making an unfavourable decision, speak to the customer:

• explain the decision
• give them a chance provide more information or evidence
• tell them of their review and appeal rights, and record an application for a formal a review of the decision if they ask for one

Make 2 genuine attempts to contact the customer before finalising the decision.