Family Assistance debts 107-04060000

FTB debts are identified:

• through the end of year reconciliation process
• by a customer or approved care organisation notifying their circumstances have changed after the event has occurred, or
• through compliance activities

The main types of FTB debts are:

• qualification
• circumstance
• family and maintenance income
• reconciliation, and
• non-lodger

Qualification debts occur when a customer receives a payment for which they were not eligible. This can occur if a customer:

• has care arrangements change for a child, such as:
  • loss of care, or
  • percentage of care changes
• receives FTB and it is later determined that they were not a resident of Australia, or
• was in receipt of more than base rate of FTB and has failed to meet the Maintenance Action Test (MAT)
• has a change in accommodation circumstances
• does not meet the eligibility requirements for:
  • individuals
  • grandparent carers
  • children in foster care

Raise qualification debts as soon as the loss of qualification is identified.

If the debt is undetermined when reconciliation occurs, the debt will automatically be:

• finalised, and
• included in the reconciliation outcome

See Qualification debt identified in FTB reconciliation result or when completing activity that triggers FTB reconciliation.

A circumstance debt occurs from any changes, other than:

• income, and
• maintenance income

Circumstance debts arise if a change in circumstances results in the customer losing qualification to a payment. Raise the debt at the time the change in circumstances is identified.

For example, FTB eligibility would cease from the day a child left care where a customer notifies that a child left their care 1 month ago. Raise the debt immediately.

Family and maintenance income overpayments generated for a period in the current financial year do not need to be raised immediately, zero the negative adjustment before finalising the activity.

Family and maintenance income debts will be determined in the FTB reconciliation process.

If an income or maintenance income related debt is not zeroed before the activity is finalised, the undetermined debt can be:

• finalised no debt, and
• included in the reconciliation result

Reconciliation debts are a result of underestimating family income and/or maintenance income.

Customers receiving FTB payments as fortnightly instalments or as a fee reduction are usually paid based on an estimate of adjusted taxable income for the financial year. If a customer received more than they were entitled to for that financial year, they will have a reconciliation debt.

Reconciliation debts can also:

• be raised due to child income and retrospective changes in circumstances
• include qualification debts that were undetermined when reconciliation occurred

A non-lodger debt occurs when a customer or their partner does not lodge an income tax return within the required time.