Family Tax Benefit (FTB) reconciliation debts where estimated or actual income was used 107-04090010

Where a customer and their current partner are not required to lodge a tax return, reconciliation will occur using:

• the latest income estimates for adjusted taxable income on the record
• actual maintenance income received in the relevant income year

Services Australia raise and recover FTB debts identified for these customers.

The income test has no effect on single customers on income support for FTB Part A or Part B.

If a single customer were on income support for the whole of the relevant income year, any reconciliation debt would mainly be because of maintenance income. This occurs when the actual maintenance income is higher than the maintenance income estimated during the relevant income year.

This is an automatic process using electronic transfer of information between Services Australia and the ATO.

• Recovery from a customer's tax refund occurs if actual income details are used in the reconciliation process
• Recovery from a partner's tax refund occurs if:
• the partner has given consent on their income tax return and
• the partner is entitled to a tax refund
• reconciliation can occur at the time the partner's tax refund is due for issue

Debt amount decreases

Automatic recalculation of interest charged:

• is from the original debt due date
• occurs for any periods where interest has been applied
• is on the new outstanding balance

Debt amount increases

The interest calculation is based on the previous debt amount for another 28 days, where the:

• debt amount increases and
• debtor is not in an acceptable payment arrangement

The system automatically calculates the Interest Charge on the new higher debt balance, 29 days from the issue date of the debt notice.

Attempt recovery through the ATO. The calculated debt is in the Debt Management and Information System (DMIS) pending ATO advice of any recovery action.

• If the debt is fully recovered (or partially recovered leaving a balance of less than $50) by the ATO from the customer's tax refund:
• the debt is raised in DMIS
• the amount recovered through the ATO is credited against the debt
• any balance is automatically waived
• the customer is advised of their reconciliation result
• A debt is raised in DMIS and a Family Assistance Letter sent if the debt is:
• fully or partially recovered by the ATO from the partner's tax refund
• partly recovered from the customer's tax refund leaving a balance of $50 or more or
• not recoverable through the ATO
• If the customer received maintenance during the relevant financial year:
• details of the amount received are known in July
• they will receive maintenance income details once reconciliation occurs
• the result includes adjustments for maintenance and adjusted taxable income

Recovery from a person’s tax refund depends on the ATO issuing the person's Notice of Assessment (NOA) by the time reconciliation is finalised.