Reconciliation of Family Tax Benefit (FTB) 007-11010000

FTB reconciliation is the automatic process of comparing a customer's FTB entitlement after the end of the financial year with the amount they were paid in FTB instalments, including zero rate periods during that financial year. The reconciliation process also applies to lump sum FTB claims when estimated income was used to assess the claim and actual income is then received, or when new information changes the customer's entitlement.

At reconciliation, the system:

• calculates correct FTB entitlement based on actual dates of changes in circumstances, actual income details transferred from the Australian Taxation Office (ATO) (if required), or income provided by the customer when completing a not required to lodge advice, immunisation status and actual maintenance income
• includes, if entitled, Part A supplement, Part B supplement, Energy Supplement Part A and Part B and Single Income Family Supplement (SIFS) in maximum annual FTB entitlement once all required information and adequate income details are available. SIFS is assessed using taxable income, not adjusted taxable income (ATI), which means FTB reconciliation may result in only SIFS being assessed. Note: SIFS is not payable to new claimants for 2017-18 and later financial years. Grandfathering provisions apply for current customers
• assesses entitlement to Part B quarantine period if return to work details are recorded
• compares correct entitlement based on actual adjusted taxable income and maintenance income with the amount of FTB the customer was paid during the financial year using estimated income and estimated maintenance income
• will use a top-up to offset any debts, even if a payment arrangement exists

FTB zero rate periods will be assessed automatically at reconciliation.

Applicable zero rate periods (CZR) include:

• ITH or IEU where FTB has reduced to zero rate because a customer provided estimate is too high to receive fortnightly payments
• MCA Mandatory Continuous Adjustment
• MCO Nil Pay More Choice Option
• Prohibition of FTB instalment payments (PIP)

For customers and partners required to lodge an income tax return, annual FTB entitlement is calculated using:

• income details transferred from the Australian Taxation Office (ATO), and
• any other actual adjusted taxable income (ATI) recorded

A completed and accepted non-lodgement advice provides the:

• non-lodgement exemption reason, and
• income details to be used to reconcile FTB

If Services Australia have not accepted a non-lodgement advice but the income details are considered reasonable, the income declaration will still be recorded on the FAO Income for Previous Year (FIPY) screen. This income will be used in reconciliation if an ATO 'Return Not Necessary' (RNN) advice is later received. For CCS ex-partner income details, record this within Process Direct via the EXFNLE screen.

For customers to receive their full annual FTB entitlement, income lodgement requirements must be met by the end of the lodgement year.

Reconciliation can result in:

• no adjustment
• a top-up amount:
• this can be used to offset outstanding family assistance debts. A top-up amount can be used to repay family assistance, social security, student assistance and Paid Parental Leave scheme payment debts, whether or not the customer has a repayment arrangement in place
• an FTB top-up (including supplements and SIFS if entitled) can only be paid if, by the end of the lodgement year, they lodge their tax return, or notify they are not required to lodge a tax return
• an overpayment. This may be recovered from the customer's tax refund (or their partner's if they have given consent). Any remaining overpayment amount is raised as a debt

FTB reconciliation can automatically occur from 2 July of the lodgement year once all information is available including adequate income details or not required to lodge information for the customer and their current partner.

Automatic FTB reconciliation will occur in the first 2 weeks of July of the lodgement year for customers who have received their last payment for the financial year and:

• have adequate income/not required to lodge details available, or
• are single and on an income support payment with no gaps in payment or employment income nil rate periods for the entire period they were FTB current during the financial year, for example, Parenting Payment Single (PPS)

Partial reconciliation will occur from 2 July of the lodgement year if only ex-partner actual income details are needed for reconciliation to occur. Special processing applies for customers with an ex-partner.

Reconciliation will remain pending until all required information is available for reconciliation.

The non-lodger process applies if expected actual income details or not required to lodge details are not available within the relevant time frame.

Note: if a child does not meet the immunisation requirements and they are serving an FTB immunisation grace period at the end of the financial year, FTB reconciliation will not occur until the child meets immunisation requirements or the FTB immunisation grace period ends (whichever occurs first). An FTB immunisation grace period can last for up to 63 days from the date the child fails to meet immunisation requirements. See Immunisation requirements for Family Tax Benefit (FTB) Part A from 1 July 2018.

FTB lump sum claims cannot be finalised until adequate income details are available for the customer (and their current partner). Lump sum claims must be lodged and income confirmed by the end of the lodgement year .

A lump sum FTB claim will be made not effective if the claim is lodged late or income is not confirmed by the end of the lodgement year, unless a special circumstances extension is granted

A child’s immunisation status is checked when the claim is determined. On the date of determination, if the child’s immunisation is:

• No (immunisation requirements are not met), the FTB Part A reduction due to immunisation is applied to the rate of FTB Part A for the entire lump sum claim period
• Yes (immunisation requirements are met), the FTB Part A reduction due to immunisation is not applied to the rate of FTB Part A
• Unknown, the FTB lump sum claim will have a status of pending for up to 14 days while the AIR link is attempted

See Processing FTB lump sum claims.

Reconciliation is a two-step process that uses the actual dates of any changes in the family's circumstances to work out their correct FTB rate. The steps are:

• Income reconciliation for income reconciliation periods where the customer's income estimate was used to work out their FTB rate during the relevant financial year. If available, actual adjusted taxable income details are used to work out correct FTB entitlement
• Maintenance reconciliation for any periods the customer or their partner was entitled to claim child support. The system limits FTB Part A to base rate for the child for periods appropriate maintenance action was not taken. The Maintenance Income Test is applied using actual child support received for customers with a child support collect case and the deemed amount for private collect cases. Customers with a child support entitlement registered for collection by Child Support may benefit from the Maintenance Income Credit

Reconciliation is generally an automatic process but in some cases manual intervention is needed to finalise the reconciliation process.

If income details or circumstances for the relevant financial year are updated after FTB reconciliation has occurred, re-reconciliation will occur automatically using the new details.

A FTB top-up or lump sum claim amount, after debt offsetting by Centrelink, may be used by the ATO to offset tax debts if the ATO has not yet issued the NOA.

Services Australia issues the FTB reconciliation top-up payment or lump sum claim amount (if entitled) and issues a letter to the customer to advise the result. If the customer has subscribed to Electronic Message and Reminder Service, an SMS may be sent to confirm a top up has been issued.

Reconciliation letters advise details of any amounts used to offset or repay a Centrelink debt. An account payable will be issued for any FTB reconciliation debt raised for the relevant financial year.

See Debt offsetting during family assistance reassessment, reconciliation and claim processing.

There are restrictions with regard to disclosure and confidentiality of customer, partner and ex-partner information. Privacy, Person Permitted to Enquire (PPE) and implied authority provisions apply.

P24845 - in some cases where FTB for a child is being paid to the step parent, care is not being applied correctly. See Notification and assessment of shared care arrangements for FTB.