Determining the appropriate tax year for the Parental Income Test (PIT) for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Scheme 108-02010050

The combined parental income for a single financial year is used in the application of the PIT. It is necessary to ensure that the parental income amount for the appropriate tax year is used.

Normally, the combined parental income for the base tax year is used. However, the base tax year income may not reflect the current financial circumstances of the parent(s)/guardian(s). This is because current tax year income may increase or decrease significantly from the base year income. A significant increase or decrease in current tax year income may result in a current tax year assessment.

In some cases, the parental income amount for the current tax year may be used to determine the customer's entitlement. This is referred to as a current tax year assessment and can occur where:

• there is a substantial decrease in income for the current tax year from that of the base tax year, and
• the drop in income is expected to last at least 2 years

A customer (or parent) may request a current year assessment up to 13 weeks in advance. However, a current tax year assessment due to a decrease in income can only be applied from the later of:

• the day the request is made, or
• 1 January of the current tax year

See the Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Scheme for an example.

Evidence to support a current year assessment must be provided.

The customer’s entitlement is based on the current tax year figures if the current tax year income increases by more than 25% of the:

• base tax year, and
• Parental Income Free Area (PIFA)

The assessment applies from:

• the first payment period that ends after 30 September, or
• 1 October for ABSTUDY and AIC customers

See the Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Scheme Background page for more information.

For AIC, only an Additional Boarding Allowance received by a customer (usually the parent/guardian applicant for the student) is affected. Other AIC allowances are not affected as they are not subject to means testing.

For new claims see Event date for Parental Income.

For the purposes of a current year assessment requested between 2020 and 2023, where a parent advises a substantial decrease in income because of Covid-19, Service Officers were able to accept that the decrease will last for 2 years or more. Parents did not need to provide evidence of their decrease in income.