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Raising Parental Income Test (PIT) debts 107-09120040

For staff responsible for raising debts.

This document outlines how and why debts relating to the Parental Income Test (PIT) are raised.

How to raise a PIT debt

Table 1

Step	Action
1	Change in circumstances Check the customer’s record if: a Youth Allowance (YA), ABSTUDY or Assistance for Isolated Children (AIC) Additional Boarding Allowance (ABA) customer advises of a change in circumstances, or data matching activities show new taxable income figures that affect the customer's rate of payment Has the record been updated with the changes? Yes, go to Step 2 No. Follow the relevant procedure below and go to the point of finalising the assessment on the Assessment Results (AR) screen: Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Circumstances when the Parental Income Test (PIT) does not apply Changes which may affect the Parental Income Test (PIT) Determining a dependent child for inclusion in the family pool for the Parental Income Test (PIT) Youth Allowance (YA) and ABSTUDY Parental Income Test (PIT) reviews
2	System indicates a negative adjustment Does the system indicate there is a negative adjustment following the reassessment? Yes, and the customer receives: YA, go to Step 3 ABSTUDY, see Raising ABSTUDY debts AIC (ABA), see Assistance for Isolated Children (AIC) debts No. Finalise the activity: the payment details are adjusted by the system procedure ends here
3	Excess payment reason When updating the YA customer record with the verified (actual) parental income, check if a legally recoverable debt exists. See Finalised 'no debt' (FND) or 'zeroing' debts that are not legally recoverable. See the Resources page for an example of a legally recoverable debt. If a YA customer's rate of payment is based on an estimate of parental income, a letter requesting verification is sent. Check the Household Income and Assets (NHI) screen to confirm the date of issue. No debt can be raised before the 21 day period after the letter is sent. Did the YA customer's excess payment arise because verified (actual) parental income is higher than the estimate? Yes, go to Step 4 No, go to Step 6
4	Actual income timeframe Did the YA customer provide the verified (actual) parental income within the 21 day timeframe given in the verification letter? Yes. If the debt occurred solely because the verified (actual) parental income is higher than the estimate, the excess payment is not legally recoverable. Go to Step 7 No, go to Step 5
5	Examine the cause of the debt A legally recoverable debt exists if: the YA customer did not respond within 21 days to the agency's notice of request to verify their parental income. Raise the debt from day 22. See Actioning an undetermined debt on the Debt Management and Information System (DMIS), or parental income is unable to be verified within 21 days, and the YA customer did not advise of verified parental income by the nominated date (between 30 September to 31 December). Raise the debt based on the estimate for the whole period (starting from 30 September). See Actioning an undetermined debt on the Debt Management and Information System (DMIS) No legally recoverable debt exists if: the YA customer lodges a Notice of Assessment from the Australian Taxation Office (ATO) the DMN/NDB activity generated even though the YA customer responded to the agency's notice of request within 21 days, and there is an increase to the verified (actual) parental income the agency did not send the YA customer a notice of request to verify (actual) parental income. The customer cannot be expected to know that they have an obligation to provide this information. See Finalised 'no debt' (FND) or 'zeroing' debts that are not legally recoverable go to Step 7
6	Calculate the debt Calculate the debt from: the 'Date of Issue' of the Notice of Assessment if this is after 1 January, or the first day of the period that includes 1 January. See example on the Resources page Use the Debt Action script to action the debt. If the script is unavailable, see Create a new debt record manually on the Debt Management and Information System (DMIS) to manually raise the debt. Procedure ends here.
7	Finalise the activity as no debt If a DMN/NDB activity has been created, use the Debt Action script to finalise as 'no debt'. use FND reason code excess payment EXP - no legal debt complete the DOC to record the FND decision See Finalised 'no debt' (FND) or 'zeroing' debts that are not legally recoverable.