Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) Scheme 108-02020020

Has there been a change in parental income?

• Yes:
• parental income has increased by 25% of the base tax year and more than 25% of the parental income free area (PIFA). For the PIFA, see the Parental Income Test (PIT) - Youth Allowance (YA) link on the Rates and thresholds page. Go to Step 2
• parental income has decreased, go to Step 5
  Note: a decrease is substantial if it is enough to give the customer entitlement to YA, ABSTUDY or AIC Additional Boarding Allowance (ABA), or cause an increase in the rate of payment
• No, there is no change to the base year, go to Step 11

If a parent/applicant or customer advises an increase in parental income in the current tax year, determine if parental income has increased by more than 25% of the base tax year income and more than 25% of the parental income free area (PIFA).

If the customer/applicant thinks such an increase has occurred, ask them to provide an estimate of the parental income for the current tax year. This estimate can be provided on either:

• for YA and ABSTUDY customers, either:
• a Module JY - Parent(s)/Guardian(s) details for the Base Tax Year and Current Tax Year (MOD JY), or
• a Youth Allowance/ABSTUDY Annual Parental Income Reassessment (SY012(A)) with the correct current year indicated on it, or
• accept a verbal statement if parent(s) are present
  Note: parental income details (for YA and ABSTUDY) can be advised using online accounts on the Services Australia website. See the Resources page for a link to the Advise Parental Income online service
• for AIC Additional Boarding Allowance (ABA) customers, an Assistance for Isolated Children (AIC) Current Tax Year Assessment (SY042). AIC applicants receiving ABA assessed on parental income are also sent a letter in August or September each year asking them to contact the relevant AIC Smart Centre if they think the income for current tax year has increased by more than 25% of the base tax year income and more than 25% of the PIFA

Request the MOD JY/SY012(A)/SY042 using an RFI. See Requesting information (CLK).

When the MOD JY/SY012(A)/SY042 is returned, see one of the following for assessment information:

• Completing Parent(s)/Guardian(s) details for the Base Tax Year and Current Tax Year (MOD JY)
• Youth Allowance (YA) and ABSTUDY Parental Income Test (PIT) reviews
• Assessing the Assistance for Isolated Children (AIC) Current Income Assessment (SY042)

If there has not been an increase of more than 25% above the base tax year, assessment will continue to be assessed on the base tax year income for the remainder of the calendar year.

If there has been an increase of more than 25% of the base tax year income and more than 25% of the parental income free area (PIFA), the customer/AIC applicant will be assessed on the basis of this higher parental income from:

• the first pay period that ends after 30 September in the current calendar year for YA customers, or
• 1 October for ABSTUDY and AIC Additional Boarding Allowance (ABA) customers/applicants. For AIC, this is called a Reverse Current Income Assessment

If an increase in parental income occurs in the financial year commencing 1 July in the year of study/activity, there is no effect on the customer's/applicant's entitlement in the year of study/activity. It may however, affect the YA customer's entitlement from the first pay period that ends after 30 September or the ABSTUDY/AIC ABA customer's/applicant's payment from 1 October in the following year.

If YA or ABSTUDY Living Allowance is no longer payable because of the increase in parental income, the parent may qualify for Family Tax Benefit (FTB) for the student.

If AIC ABA is no longer payable, AIC Basic Boarding Allowance remains payable. FTB can also remain payable for a student for whom AIC is being received. See Family Tax Benefit (FTB) child of a person.

For YA customers only, if a new parental income assessment applies, it applies to the entire period of the first pay period ending after 30 September.

In the customer's record:

• go to the Household Income and Assets (NHI) screen and code the following fields:
• Date of Event: see Event date for Parental Income
• Financial Year Ending: as the current tax year
• Estimate: Y
• Review Date: the date provided by the parent advising when the actual income details will be available
• Taxable Income: for the parents and details of any overseas income, maintenance paid, maintenance received and net investment losses (that is, negative gearing). Check for any reportable fringe benefits and superannuation contributions
• Source: and DOR: as appropriate and the action is 'I' (insert)
• [Enter] to update the screen details and complete the assessment on the Assessment Results (AR) screen
• the change to the YA customer's rate takes effect from the beginning of the first pay period that ends after 30 September in the current year
• the change to the ABSTUDY or AIC ABA customer/applicant's rate takes effect from 1 October

If the date is in the past, a debt may be raised by the system that needs to be checked to see if it is recoverable. Go to Step 11.

Note: if a parent or guardian advise an increase in income, Service Officers must ensure all sibling records are updated.

Ask the customer or the parent/guardian:

• when the decrease in income occurred and if the decrease is likely to last for at least 2 years, and
• explain that a current year assessment may be made if there has been a substantial decrease in parental income that will last at least 2 years

For the decrease to have effect in the calendar year, it must occur prior to 1 July (that is, before the end of the current tax year). If parental income decreases after 1 July, the reduced income cannot be taken into account or coded until 1 January of the following year. Tell the customer to contact again on or after 1 January to request a current year assessment. There is no need to provide supporting documents (MOD JY, payslips etc) again if they have already been supplied. Reduced parental income can be taken into account under circumstances for a Parental Income Test (PIT) exemption.

Parents and/or guardians advising a decrease in income must supply evidence of the decrease. Examples of evidence may include (but are not limited to) payslips, a notice indicating change or loss of employment or medical evidence about work limitations.

A customer may request a current year assessment up to 13 weeks in advance of the event. However, it must be satisfied that there is sufficient evidence to support the estimate provided. If not, a follow up action may be required to determine whether the information is still accurate closer to the event.

Will the decrease in income last at least 2 years?

• Yes, and the customer is receiving:
• YA ABSTUDY, go to Step 6
• AIC, go to Step 7
• No, there is no change to the appropriate tax year and the customer's rate of payment will not change. Go to Step 11

YA or ABSTUDY customer's parent/guardian has had a decrease in income that will last at least 2 years:

• If the parent/ guardian has not supplied evidence of the decrease, request evidence. Examples of evidence may include (but are not limited to):
• payslips
• a notice indicating change or loss of employment, or
• medical evidence about work limitations
• Record the issue of the form on a DOC and resubmit for 14 days. For full details on assessment, see Completing Parent(s)/Guardian(s) details for the Base Tax Year and Current Tax Year (MOD JY). Go to Step 9

AIC customer's parent/person deemed to be a parent for the purposes of the parental income test has a decrease in income that will last at least 2 years:

• issue the customer or the parent/person deemed to be a parent for the purposes of the Parental Income Test (PIT) with a SY042 form. See the Resources page for a link to the form
• record the issuing of the form on a DOC and resubmit for 14 days. For full details on assessment, see Assessing the Assistance for Isolated Children (AIC) Current Income Assessment (SY042)

• Examine information the customer's parents have provided about their income and decide if the current year is the appropriate tax year
• compare estimated income for the current year with previously supplied details for the base tax year

Will using current tax year income give the customer entitlement to payment or increase the current rate of payment?

• Yes, current tax year is the appropriate tax year. Go to Step 9
• No, base tax year is the appropriate tax year. Go to Step 11

For ABSTUDY and AIC customers if the change occurs:

• before 1 January in the year for which assistance is being claimed, a current tax year assessment applies from 1 January
• on or after 1 January in the year for which assistance is being claimed, from the date the decrease occurred

If the customer has requested a current year assessment in advance of the decrease, determine whether a Manual Follow-up (MFU) action is required to ensure the estimate is still accurate closer to the event.

For current year assessments for YA customers see Event Date for Parental Income.

A decrease in parental income that occurs after 1 July in the current calendar year does not affect:

• a YA payment until the EPSD immediately before 1 January of the following calendar year. If 1 January is coded in the Event Date: field of the NHI screen, the system will automatically apply this from the EPSD immediately before 1 January
• an ABSTUDY or AIC ABA payment until 1 January of the following calendar year

• in the customer's record, go to the Household Income and Assets (NHI) screen
• record the Event Date: field, as determined in the previous step
• the Financial Year ending: field, will be the current tax year
• if the current income is an estimate, enter 'Y' in the Estimate: field and a date in the Review Date: field. The review date should be a date when the actual income can be verified, probably after the end of the financial year
• Taxable Income: for the parents and details of any overseas income, maintenance paid, and net investment losses (that is, negative gearing). Check for any reportable fringe benefits and superannuation contributions
• complete the Source: and DOR: fields and the action is 'I' (insert)
• [Enter] to update the screen details and complete the assessment on the Assessment Results (AR) screen

Note: if a parent or guardian advise an increase in income, Service Officers must ensure all sibling records are updated.

Record details of decision to approve/reject the change to the appropriate tax year on a DOC.