Taxable income for family assistance and Paid Parental Leave scheme payments 007-07080010

If the estimate of taxable income is for:

• the current financial year, in most cases the Family Income and Choices workflow is used to record the reasonable income estimate for the recipient (and their partner). See Updating income estimates for the current financial year
• a previous year, view and record the reasonable income estimate on the FAO Income for Previous Year (FIPY) screen. See Recording or updating income estimates for previous year for family assistance payments

Customers can view and update their family income estimate or their payment choice for FTB via self service (online, Mobile App and phone)

For further information, see:

• Family assistance and Paid Parental Leave scheme options online
• Family Tax Benefit (FTB) claim options and payment choices

At reconciliation or for a previous year lump sum claim, income assessment details can be viewed on the FAO Income Component Summary (FICS) screen.

To manually record the taxable income estimate for the current financial year, go to the FAO Taxable Income (FTI) screen directly or via the FAO Income Task Selector (FITS) screen.

• If an FTI screen does not exist for the current financial year, code 'I'nsert in the Action: field and press [Enter]. Code the relevant year in the Financial Year: field
• If an FTI screen exists for the current financial year, use this screen

The FTI screen is included in the screen flow for family assistance claims. While it is not mandatory to complete the details, a FTB claim will be not effective unless the person receives income support.

Data is protected when:

• it is supplied by the Australian Taxation Office (ATO) - the From: field displays ATO
• if a person and their partner are unlinked, the partner's details are protected
• a page has been created for a financial year

'I'nsert is used when recording a revised estimate. Taxable income is inserted on the first available line.

'C'orrect should only be used if the original entry is incorrect. It can be used to correct any item except date of event.

'D'elete a line only if the details should not have been recorded. Note: all lines, including deleted lines, will display.

Code the following details in customer/partner fields:

• Event Date: date the estimate is notified
• Amt A$: estimated amount in Australian dollars, (must be in whole dollars). Code '0' for persons with nil taxable income
• 'EST'imate in Type: field
• 'CUS'tomer in From: field
• DOR: and Source: fields
• Press [Enter] to confirm all details

The estimate must include all taxable income the customer (and their partner on the date of the claim) expects to receive during the 6 month period beginning on the day the stillborn child was delivered.

If the customer has included reportable fringe benefits in their estimate for a 6 month period starting on or after 1 April 2017 and before 1 July 2017, a manual calculation may be required to apply the correct fringe benefit tax rate. See the Resources page in Assessment of adjusted fringe benefits for family assistance and Paid Parental Leave scheme payments for an example.

If updates to the record are required, see Processing claims for Stillborn Baby Payment (SBP).

For a Parental Leave Pay (PPL) claim, customers must meet the PPL income test to be eligible for PPL. All customers claiming PPL must provide an estimate of their ATI for the financial year before the date of claim or the date the child was born or entered care, whichever is earlier.

For children born or adopted before 1 July 2023, the PPL income test is based on the estimate of the customer’s income only, and does not include their partner’s income estimate.

Secondary and tertiary claimants need to give an estimate when they claim PPL. For example, after the primary claimant returns to work, or after the death of the primary carer/claimant.

For children born or adopted on or after 1 July 2023, a family income test may apply, in addition to the individual income test. If the customer does not meet the individual income test, then the family income test limit is applied. This applies to both single and partnered customers.

The customer's estimate must be considered reasonable for it to be used to assess their eligibility

See Paid Parental Leave income test and previous financial year income estimate.

When a person receives PPL and has an amount withheld for tax purposes, they receive a payment summary after the end of the financial year, stating the amount of PPL received and amount of tax deducted.

If they lodge their tax return based on the payment summary details and a debt of PPL is raised for the same financial year, they must lodge an amended tax return with the ATO. An amended payment summary will not be issued until a debt repayment is received from the person.

For information about adjusting tax deductions before the end of financial year close down, see Refunding Australian Taxation Office (ATO) excess tax deductions.

Note: tax instalment recovery cannot be applied if a debt amount is attributable to PPL which was provided by an employer.