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

This is an automatic procedure and has no service centre involvement.

This document outlines information on FTB debts resulting from the reconciliation process.

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FTB reconciliation where adjusted taxable income is not required

FTB reconciliation using Actual adjusted taxable income from the ATO

FTB reconciliation where adjusted taxable income is not required

Table 1

Step	Action
1	Final payments for income year Scenario - Final maintenance payment details for the relevant income year received from Child Support and final payments for the relevant income year made. Unless actual income details are needed, FTB reconciliation compares the FTB paid based on: estimated income and maintenance income, and entitlement based on customer's latest estimate and actual maintenance The higher of the estimated tax-free pension/benefit and the actual amount paid are used. Any debt is automatically recorded in the Debt Management and Information System (DMIS). Is the total calculated debt amount (not outstanding balance) less than the small debt waiver threshold? Yes, the FTB debt will be automatically waived and DMIS record updated. Procedure ends here No, go to Step 2
2	Recovery action Centrelink commences recovery action. A letter automatically issues to the customer with details of the debt amount, including: Debt reason, FTB Reconciliation (FRC) Start date, 1 July of the relevant income year End date, 30 June of the relevant income year Section Act, section 71(2) Family Assistance (Administration) Act 1999 Source code, FAO/SYS Benefit Type, FTB
3	Recovery of overpayment Recover the debt in the following way, if the customer is: receiving payments from Services Australia, the standard reconciliation withholding rate applies not current and the amount remains unpaid by the due date, the customer must enter into a payment arrangement To avoid the Interest Charge the customer must, within 28 days of the date of the letter do one of the following: pay their debt(s) in full continue making payments under their existing payment arrangement, or enter into a payment arrangement and make payments under that arrangement
4	Zero entitlement Customers may be subject to non-payment of FTB instalment payments to zero entitlement customers, if: there is zero entitlement to FTB, due to the underestimation of income, and it is the second consecutive zero entitlement result since 2009-10

FTB reconciliation using Actual adjusted taxable income from the ATO

Table 2

Step	Action
1	Tax return assessed by the ATO The ATO assesses the tax return of a customer and their current partner or ex-partner and shares this information with Services Australia Are actual income details needed for the customer (or current partner) before reconciliation can proceed? Yes, go to Step 2 No, go to Step 3
2	FTB information The customer's taxation Notice of Assessment (NOA) issued by the ATO will not include any FTB information. Procedure ends here.
3	Recalculation of FTB entitlement Reconciliation is a recalculation of the customer's FTB entitlement. If the result is a debt, it is recorded in the Debt Management and Information System (DMIS). If the total calculated debt amount is: less than the small debt waiver threshold, the debt will be automatically waived SDW equal to, or more than, the small debt waiver threshold, details of the debt go back to the ATO. Services Australia will take no recovery action or advise the customer while the ATO attempts recovery Go to Step 4.
4	Mixed delivery customer A mixed delivery customer is a customer who has chosen to claim FTB: by instalments, and as a lump sum claim in the one financial year Is the mixed delivery customer’s FTB lump sum claim entitlement and reconciliation debt being processed at the same time? Yes, go to Step 5 No, go to Step 6
5	FTB lump sum used to offset FTB reconciliation debt The FTB lump sum amount is adjusted to offset: the FTB reconciliation debt, and any other outstanding debts The ATO may use any remaining FTB entitlement to offset tax debts. See Debt offsetting during family assistance reassessment, reconciliation and claim processing. Go to Step 7.
6	Debt offsetting The ATO may use the customer's (and consenting partner's) tax refund to offset outstanding FTB debts. See Debt offsetting during family assistance reassessment, reconciliation and claim processing. Services Australia will receive details of the actions taken by the ATO.
7	Status The status of the debt in DMIS will change to determined (DET). This will show any amount recovered from FTB lump sum claim entitlement or tax refund. See ATO recoveries on the Overpayment Recovery History (OPRH) screen as ATO - Reco. Tax refund. A letter is automatically sent to the customer advising the FTB reconciliation/lump sum claim result. This includes details of any amounts recovered from FTB lump sum claim or a tax refund.
8	Recovery action for debt balance owing Recovery action begins. The customer receives a letter with details of the debt amount, including: Debt reason, FTB Reconciliation (FRC) Start date, 1 July of the relevant financial year End date, 30 June of the relevant financial year Section act, Section 71(2) Family Assistance (Administration) Act 1999 Source code, FAO/SYS Benefit Type, FTB Note: recovery action on a raised reconciliation debt ceases if the NOA is cancelled. The debt is held until new details are advised.
9	Debt recovery process To recover the debt, if the customer is: receiving Centrelink payments, standard reconciliation withholding rate will apply not current and the amount is not paid by the due date, the customer must enter into a payment arrangement and Interest Charges will apply To avoid the Interest Charge being applied, non-current customers need to do one of the following within 28 days of the date of the letter: pay their debt(s) in full continue making payments under their existing payment arrangement, or enter into a payment arrangement and make payments under that arrangement