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Applying, assessing and coding parental income for Assistance for Isolated Children (AIC) 108-02010030

For Assistance for Isolated Children (AIC) Smart Centre only

This document outlines the application of the Parental Income Test (PIT) for Assistance for Isolated Children (AIC).

On this page:

Applying the PIT

Assessing parental income

Changes to the applicant's circumstances

Applying the PIT

Table 1

Step	Action
1	Circumstance For: applying, assessing and coding parental income, go to Step 2 applicants requesting an extension of time to provide actual income figures, go to Step 9 applicants providing verification for an income estimate, go to Step 10 a change in the applicant or their partner’s circumstances, see Table 3 requests for a current year income assessment, see Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC)
2	Receipt of form and Boarding Allowance Determine who the student's parents or guardians are for the purposes of applying the PIT. Generally, the PIT applies to the income of the approved applicant and their partner if they have a partner. If the parents are separated or divorced, determine who the approved applicant is and apply the PIT to that parent (and their partner, if applicable). See Determining who can be the applicant for the Assistance for Isolated Children (AIC) for assistance. Are both the applicant and student eligible for Boarding Allowance (BA) and an Additional Boarding Allowance (ABA) assessment has been requested? Yes, and the applicant is: an organisation, go to Step 3 a foster parent, go to Step 4 anyone not listed above, go to Step 6 No, ABA is not payable and parental income is not required. Procedure ends here
3	Institution/organisation applicant When the AIC applicant is an institution/organisation, the Parental Income Test (PIT) is waived. Updates must be made in the ISS system. To change to ISS AIC, code SVAIC in the Next field and select Enter. On the AIC Claim Details (EICD) screen, code the following fields: Relationship to Student: ORG Source: as appropriate Action: 'C'orrect Select Continue Is a new claim being assessed? Yes, continue to process the claim No, finalise the update and record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed. Procedure ends here
4	Foster parent applicant Where the student is in a state authorised foster care arrangement and their foster parent is not receiving a foster care or similar allowance, the PIT is waived. The applicant must provide a statement from the relevant government agency which includes all of the following from the relevant government agency: confirmation that a direction or authorisation by a minister, court or department is currently in effect in relation to the student's care advice of the care arrangements, including the name and address of the person(s), government agency or another organisation authorised to care for them and details that the person authorised to care for the student is not receiving any continuous payment to assist directly with their upkeep Tell the applicant the above required documents. If required, send a request for the documentation. Has suitable documentation to support the above been provided? Yes, go to Step 5 No: Advise the applicant ABA will not be assessed until the required documents are provided Record details on a DOC of decision or discussion Procedure ends here
5	Foster parent applicant coding Go to the AIC Claim Details (EICD) screen and code the following fields: Relationship to Student: FSP Foster Care Allowance Paid: N Source and DOR: as appropriate Action: 'C'orrect Select Continue Is a new claim being assessed? Yes, continue to process the claim. Procedure ends here No, finalise the update and record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed. Procedure ends here
6	Code details of the parents and siblings Go to the PIT Parent Selection (NPPS) screen and check the parent/guardian details are correct. Update as required, see Creating, updating and ending Parental Income Test (PIT) links for dependent student, Australian Apprentice and job seeker customers Check the details of the siblings to see if the children are contributing to the family pool on the Family Pool Summary (NSFP) screen. For more information, see Determining a dependent child for inclusion in the family pool for the Parental Income Test (PIT) Dependent siblings sharing a common parent with the customer are automatically linked when PIT links are created. If the siblings have not been linked on the PIT Sibling Selection (NPSS) screen, see Linking sibling records with customers/students/Australian Apprentices/job seekers - Parental Income Test (PIT) Once all required screens have been checked and coded, go to Step 7.
7	Assess for PIT exemption A PIT exemption applies if the applicant or their partner: receives a qualifying payment, or holds a Health Care Card (HCC) Does a PIT exemption apply? Yes, go to Step 8 No, see Table 2
8	PIT exemptions For most PIT exemption categories, the system will automatically update the PIT exemption reason on the Household Income and Assets (NHI) screen. If the appropriate PIT exemption does not display on the NHI screen, see Circumstances when the Parental Income Test (PIT) does not apply. Is a new claim being assessed? Yes, continue to process the claim. Procedure ends here No, finalise the update and record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed. Procedure ends here
9	Extension requested to provide actual income Before extending the PIT estimate review date, check the parent(s)/guardian(s)' FAO Income for Previous Year (FIPY) screen for any confirmed income for the relevant financial year. If there is verified actual income for the relevant financial year, see Table 2 > Step 2. Otherwise, to extend the PIT estimate review date, go to the Living Arrangement Details (EILA) screen: ‘S’elect the most recent HOS or SCH line with the Annual Boarding Fees: field coded as $1 and update the following fields: Living Arrangement Start Date: to the new advised date the applicant's Notice of Assessment (NOA) will be available. Note: Parental Income Test (PIT) estimates can only be accepted until 01 April, therefore do not code the Living Arrangement Start Date as a date after 01 April Action: 'C'orrect Source and DOR: as appropriate Select Continue Go to the Assessments Results (AR) screen and finalise the update Record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed Procedure ends here.
10	Actual income provided When an applicant is providing proof of income to verify a parental income estimate, the only sufficient formal evidence is one of the following: a Tax Notice of Assessment (NOA) issued by the Australian Taxation Office (ATO), or actual parental income data on the FAO Income for Previous Year (FIPY) screen Note: if an applicant's partner has not provided a Tax File Number (TFN) or their TFN is not recorded, verification can only be confirmed by a NOA. Is formal evidence available? Yes, see Table 2 > Step 2 No: advise the applicant the estimate will not be updated until the required documentation is provided on the applicant's record, issue an AIC Additional Boarding Allowance - Request for information Q888 letter. For details, see Creating a Q999 or Q888 letter record details on a DOC of decision or discussion procedure ends here

Assessing parental income

Table 2

Step	Action
1	Combined Parental income details See Parental Income Test (PIT) for a description of all sources of income that are assessed under the PIT. Collect information on the parent's income for the base tax year from either a Claim for Assistance for Isolated Children (SY040) or from the FAO Income for Previous Year (FIPY) screen of the applicant's record. If PIT details have previously been provided for any other dependent children in the family, this information can be used for this assessment. Check the Household Income and Assets (NHI) screen on the sibling's record(s). Has suitable proof of income been provided? Yes, go to Step 3 No, if required, send Q888 requesting the documentation: On the applicant's record, issue an AIC Additional Boarding Allowance - Request for information Q888 letter. For details, see Creating a Q999 or Q888 letter Tell the applicant ABA will not be assessed until the required documents are provided Record details on a DOC of decision or discussion Procedure ends here
2	Workaround removal When the parent/guardian has provided actual income to verify a previously coded parental income estimate, updates to the Living Arrangement Details (EILA) screen are required. On the EILA screen, delete the page with the Annual Boarding Fees field coded as $1. Key the following fields: Action: 'D'elete Source and DOR: as appropriate Select Continue To update the Household Income and Assessments (NHI) screen based of the actual income provided, go to Step 3.
3	Notice of Assessment (NOA) consideration A superannuation withdrawal under the First Home Super Saver (FHSS) scheme is not included as assessable income for calculating the Parental Income Test (PIT). The treatment of these withdrawals is different between Services Australia and the Australian Tax Office (ATO): For ATO purposes, part of the amount released is considered taxable income. It will be reflected on an individual's NOA as taxable income The income received by Services Australia via the data exchange will automatically have amounts released under the FHSS excluded. This will not be the case for an individual's NOA A customer supplying an NOA who has had a superannuation withdrawal under the FHSS will need to advise the amount considered taxable. This can be manually excluded for Service Australia's purposes If the parent(s)/guardian(s)' FAO Income for Previous Year (FIPY) screen displays actual income, use this information. However, if the parent/guardian contacts and they have any of the following income estimates recorded on their family assistance record, obtain the actual income information for these income components from the parent/guardian. Check: Tax Exempt Foreign income (FEF) screen Foreign Income (FFI) screen Tax Free Pension/Benefit (FTF) screen Deductible Child Maintenance Expenditure (FDM) screen Go to Step 4.
4	Coding the Household Income and Assessments (NHI) screen Record income details for the parent(s) for the base tax year on the Household Income and Assets (NHI) screen in Customer First. Updates must be made in the ISS system. To change to ISS AIC, code SVAIC in the Next field and select Enter. On the NHI screen, code the following fields for each PIT parent: Date of Effect: see Event date for parental income Financial Year Ending: as the base tax year Estimate field, 'N' Taxable income: the parent/guardian's taxable income Note: where the parent's actual income is $nil, code $0 and the system will automatically populate $1 of taxable income to allow calculation of ABA entitlement. Where auto population of $1 is inappropriate, leave this field blank and the system will automatically populate $0 Overseas income: income earned outside Australia that is not taxable in Australia. Note: the Australian Dollar value can be manually calculated by dividing the foreign currency amount by the exchange rate at 1 July of the relevant financial year Go to the Foreign Exchange Summary (RDFXS) screen In Process Direct, select the Relevant Country or Currency, then select Search In Customer First, select S for the relevant currency and scroll down to find the historical rates on the Foreign Exchange Details (RDFXD) screen Maintenance paid: amount paid as child support or to support a previous partner Net Investment Loss: total net investment losses Reportable super: reportable superannuation contributions Tax free pensions and benefits Exempt reportable fringe benefits: the exempt reportable fringe benefits amount, as recorded on a customer's group certificate, should be advised and recorded Other reportable fringe benefits: the other reportable fringe benefits amount, as recorded on a customer's group certificate, should be advised and recorded Was income coded using the parent(s)/guardian(s) Notice of Assessment (NOA) or confirmed income on the FIPY screen? Yes, for: new claims, continue to process the claim. Procedure ends here change of circumstances, go to Step 8 No, go to Step 5
5	Estimate coded When the parental income has been coded using income that has not been verified, a request for the parent(s)/guardian(s) Notice of Assessment (NOA) is required. Service Officers must make genuine attempts to contact the parent(s)/guardian(s) to request the information verbally. Due to system limitations, the Estimate: field on the NHI screen cannot be coded as a ‘Y’. To prevent the applicant's ABA entitlement from continuing without supporting evidence, code the following fields on the Living Arrangement Details (EILA) screen: Living Arrangement Start Date: code the date advised by the applicant when the NOA will be available. Note: Parental Income Test (PIT) estimates can only be accepted until 01 April Annual Boarding Fees field, $1 Action field, 'I'nsert Select Continue Go to Step 6.
6	Coding a manual review (RVR) In Customer First, create a manual review on the Review Registration (RVR) screen and complete the fields as follows: Service Reason: AIC Review Reason: REV (Manual Review) Due Date: code the date advised by the applicant when the NOA will be available Source: INT Date of Receipt: today's date Notes: 'PIT details are coded as an estimate. For ABA to continue to be paid, parental income verification is required. Request for information sent on XX/XX/20XX. Return to OB 108-02010030 Process > Table 2 > Step 6 to action MFU' Keywords: REVAIC Workgroup: leave blank Position: leave blank Transfer to Region: LPT The review will mature on the Due Date coded in the RVR activity. Workload Management will allocate the review for manual action. Once review: has been coded, go to Step 7 has matured: Check on the applicant’s record if they have provided the appropriate Notice of Assessment (NOA) If documents are provided, see Step 2 in this table to code the parent/guardian’s actual income If no documents have been provided, no updates required. Close the MFU
7	Issue a Q888 AIC Additional Boarding Allowance - Request for information letter On the applicant's record, issue a Q888 AIC Additional Boarding Allowance - Request for information letter. For details, see Creating a Q999 or Q888 letter. Once the letter has been sent, for: new claims, continue to process the claim. Procedure ends here change of circumstances, go to Step 8
8	Finalise activity Finalise activity on the Assessment Results (AR) screen, the system automatically calculates ABA entitlement based on details that have been recorded. Note: the activity creates a debt shell, processing staff should complete the debt raising process end to end. Record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed Procedure ends here.

Changes to the applicant's circumstances

Table 3

Step	Action
1	Determine the change in circumstance If the applicant has: become widowed, go to Step 2 separated or divorced, go to Step 3 become partnered, go to Step 4 passed away, see Death of an applicant for Assistance for Isolated Children (AIC). Procedure ends here If the student changes which parent/guardian they live with, see Determining who can be the applicant for the Assistance for Isolated Children (AIC). Procedure ends here.
2	Applicant has become widowed If an applicant has become widowed, refer them where appropriate to: a Services Australia social worker any other agencies See Social work services. If the applicant loses a partner by death, the income test only assesses the applicant's income. A death must be confirmed when a person contacts to advise the death of an applicant. Has the death action been completed? Yes, go to Step 3 No, complete the death action. Once actioned, go to Step 3
3	Applicant has become separated/divorced/widowed If the applicant loses a partner because of separation or becomes widowed, the income test only assesses the applicant's income. Note: a Mod S is not required if the customer's parent(s)/guardian(s) are partnered and not receiving an income support payment. End the PIT link of the partner Record details on a DOC. Use Fast Note - select Auto text, use Students, ABSTUDY and Apprentices > AIC > AIC Updated/Reassessed Procedure ends here.
4	Applicant has become partnered If the applicant gains a partner (for example, remarrying or beginning a de facto relationship),the income test uses the combined income of the applicant and the new partner. Link the new partner Make sure any new siblings are linked on the PIT Sibling Selection (NPSS) screen Refer to Table 2 > Step 4 to code the new combined income.