Non-payment of Family Tax Benefit (FTB) instalment payments to zero entitlement customers 007-11010150

Customers who repeatedly underestimate their income for FTB and then have zero entitlement at reconciliation will no longer be entitled to receive fortnightly instalment payments of FTB Part A and/or FTB Part B.

Preclusion from receiving fortnightly FTB instalments will apply if all of the following has occurred to the customer (or their current partner) for 2 consecutive financial years since 2009-10:

• the customer was entitled to FTB Part A or FTB Part B as fortnightly instalments with a legislative rate greater than zero based on their estimate of income (including customers on zero rate due to payment choice or Prohibition of FTB Instalment Payments)
• at reconciliation, the customer had no entitlement to that component
• at reconciliation there is at least one day in the instalment period where there is no entitlement to that component due to income, resulting in the component being cancelled (CAN-INC) for that period and during the CAN-INC period:
• for FTB Part A only, all of the income estimates provided were less than the Actual Taxable Income (ATI) amounts
• for FTB Part B only, the zero entitlement is due to the underestimation of the primary income earner
• there were no other days in the financial year where the customer was entitled to a rate greater than zero based on their adjusted taxable income (ATI) (includes both instalment and lump sum claim periods)

Action to take

• If a customer asks about this initiative, go to Step 2
• If a warning or Manual Follow-up (MFU) advising that the customer may be subject to precluded payments displays before finalising a new claim or change in circumstance activity, go to Step 3

In Process Direct:

• Type START in the Super Key and select the FTB Zero Entitlement Preclusion workflow from the Task Selector
• Select the FTB Zero Entitlement Override and Exemption task
• Select Start
• The FTB Zero Entitlement Override and Exemption Summary (FTBZEC) screen will display
• The FTB zero entitlement override (part A) and FTB zero entitlement override (part B) tables display preclusion details, including dates and the relevant First Zero Entitlement Year

In Customer First:

• Select Family Benefits menu > FTB Zero Ent. Preclusion to go to the Zero Entitlement Customer Summary
• This page will display which component/s of FTB are precluded, and the start date.
• Select the preclusion entry line to display the first zero entitlement year.

Is the customer currently subject to preclusion for the relevant component/s?

• Yes, discuss and record details on a Note/DOC. For what to advise the customer, go to Step 7
• No, go to Step 4

A warning will appear, before the finalisation of a claim or relevant change in circumstances on the record of a customer (or partner) who may be subject to preclusion. The warning will appear on the:

• Error (SWE) screen in Process Direct, and
• Assessment Warning and Error (AWE) screen in Customer First

Service Officers must make a determination before completing the activity. To check and code if the customer is eligible for an exemption, see Assessing and recording exemptions from the non-payment of Family Tax Benefit (FTB) instalment payments to zero entitlement customers.

Once it is determined the customer is not eligible for an exemption, go to Step 4.

In Process Direct:

• Go to the FAO Reconciliation & Claim Summary (FRCS) screen
• Check the reconciliation result for all financial years from the most recent financial year back to 2009-10, or until the customer has two consecutive zero entitlement years
• Select the year to view from Financial Year
• Select the most recent reconciliation line and a navigation pane will open
• Select FTB Calculation Result (FACRF)
• Check the Totals row for the Reco $ column for a $0 amount

In Customer First:

• Select Family Benefits > FTB and CCB Reconciliation to go to the FTB Reco Entry Screen.
• Check the reconciliation result for all financial years from the most recent financial year back to 2009-10, or until the customer has two consecutive zero entitlement years
• Select the year to view on the financial year tabs
• To view a more detailed explanation of a result, select the activity number that matches the result to be viewed.

Note: if re-reconciliation has occurred and the most recent result is zero on FRCS, this indicates that there has been no change to the previous result, not that the customer has zero entitlement. A re-reconciliation result of zero entitlement would appear as the negative amount of the previous result.

Has the customer (or their current partner) had two consecutive zero entitlement years since 2009-10?

• Yes, to record the preclusion
• in Process Direct, go to Step 5
• in Customer First, go to Step 6
• No, the customer is not eligible for preclusion under this initiative.
• Finalise the activity
• Record details on a Note/DOC
• Cancel all associated MFUs
• Procedure ends here

If outside of a new claim, start a Non-New Claim (NNCL) transaction:

• Key START in the Super Key
• Select the FTB Zero Entitlement Preclusion workflow from the Task Selector
• Select the FTB Zero Entitlement Override and Exemption task
• Select Start

If in a new claim transaction:

• Navigate to the FTB Zero Entitlement Override and Exemption Summary (FTBZEC) screen via Super Key

To record a preclusion within the started New Claim (NCL) or NNCL transaction, on the FTBZEC screen:

• The FTB zero entitlement override (part A) and FTB zero entitlement override (part B) tables display
• Override Type: exemption and preclusion
• Start date and End date
• The relevant First Zero Entitlement Year
• Exemption reason code
• Any Document notes
• To record a preclusion code the following:
• Select Add for the component to preclude
• The Create zero entitlement override for the selected component will display
• Override Type: Preclusion
• Start date: later of date paid to plus one, or 1 July of the current entitlement year
• First zero entitlement year: select the first year of the two consecutive confirmed nil entitlement years - For example, the first of two years that the customer under-estimate their income, and their actual income subsequently precluded entitlement
• Document Notes: record relevant information. This information will be included in an automatically generated Note/DOC for NNCL updates
• Select Save
• Complete the Receipt Date and Channel fields if prompted, select Save
• The above steps can be repeated for both components if required
• Select Assess and address any errors/warnings
• Check the result on the Entitlements (ELD) screen
• Select Finish and record details of the update
• Select Finalise to complete the transaction

In Customer First, cancel any preclusion or exemption MFU activities that are generated as a result of this activity.

Go to Step 7

• Select Families Benefits > FTB Zero Ent. Preclusion from the menu
• The Zero Entitlement Customer Summary page will display which components (FTB Part A and/or FTB Part B) are precluded
• Select the Choice of Override Type, then select preclusion from the entry line to update: Start date: later of date paid to plus one, or 1 July of the current entitlement year
• Benefit Type: select which component of FTB will be precluded
• First zero entitlement year: select the first year of the two consecutive confirmed nil entitlement years - For example, the first of two years that the customer under-estimate their income, and their actual income subsequently precluded entitlement
• Activity Note: record relevant information. This information will be included in an automatically generated DOC
• Source:
• DOR: fields
• Repeat the above steps for each component of FTB that will be precluded
• Go to the Assessment Results (AR) screen to check the result and complete the update.
• Cancel any preclusion or exemption MFU activities that are generated as a result of this activity.

Go to Step 7.

Make one genuine attempt to contact the customer. Advise them their instalment payments have been precluded or cancelled because they or their current partner have had 2 consecutive zero entitlement years since 1 July 2009.

FTB Part A or FTB Part B only precluded

Advise the customer:

• They will still be able to access their entitlement for an entitlement year during reconciliation once their actual income is confirmed by the Australian Taxation Office (ATO)
• If their circumstances change, they can request an exemption to recommence instalment payments
• Any preclusions applied to the customer will also be applied to instalment claims made by their current partner, unless their circumstances have changed

FTB-CAN/ZEP or REJ/ZEP

Advise the customer that a new claim for FTB is required to be assessed for payment of FTB by instalments. See Claiming Family Tax Benefit (FTB) instalments for children in care other than a newborn or adopted child.

Alternatively, the customer can lodge an FTB lump sum claim after the relevant financial year to have their entitlement assessed. See Initial contact by customers claiming Family Tax Benefit (FTB) as lump sum for a previous year.

Note: any preclusions applied to the customer will also be applied to instalment claims made by their current partner unless their circumstances have changed.

Record details on a DOC.

The customer will receive an automatic cancellation letter advising of the preclusion.

Review and appeal or change in circumstances

Normal review and appeal processes apply if the customer disagrees with the preclusion and their circumstances have not changed.

If the customer's circumstances have changed since the preclusion was applied, they may be eligible for an exemption.