Family Tax Benefit (FTB) reconciliation debts where estimated or actual income was used 107-04090010

Debbie received FTB during the financial year by instalments.

Debbie and partner lodged their income tax returns. Reconciliation results in a debt of $40.

• Services Australia waives recovery of the $40 as the total debt amount is less than the small debt waiver threshold
• a letter is issued to the customer to advise the result of FTB reconciliation and the debt has been waived

Kelly has received FTB by instalments for the entire financial year.

Kelly and partner lodge their income tax returns. Reconciliation results in a debt of $300. Kelly has a tax refund of $240:

• the ATO recovers $240 of the FTB debt and sends details back to Services Australia
• recovery of the $60 balance is commenced
• a letter is issued to the customer to advise the result of FTB reconciliation, money owed and debt offsetting from the tax refund

Joyce has a FTB reconciliation debt of $600.

Joyce’s partner, Grant, has a tax refund of $575. Grant has given consent to the ATO to use his tax refund to recover Joyce’s debt.

Recovery of the balance of $25 will commence.

Joyce receives a letter advising the result of FTB reconciliation. It includes details of the amount recovered from Grant's tax refund and advises the balance needs to be paid.

Boris is:

• partnered to Anita from 1 July 2000 - 1 January 2001
• single from 2 January - 31 May 2001
• partnered to Kathleen from 1 June - 30 June 2001

Boris lodges an income tax return (ITR) on 1 September 2001.

Anita lodges an ITR on 1 August 2001.

Kathleen lodges an ITR on 14 August 2001.

The ATO transfers Boris' actual taxable income (ATI) to Services Australia

The Services Australia system determines that Boris was Kathleen's partner on 30 June of the relevant financial year. Boris' income is needed to reconcile Kathleen's and Anita's FTB for the periods Boris was partnered to each customer.

For Anita:

• FTB reconciliation results in a debt for the period Anita was not partnered to Boris
• Services Australia send the debt details to the ATO. The ATO has issued Anita's NOA. The debt cannot be recovered from the tax refund. The ATO send the details back to Services Australia
• the debt is unparked on Anita's record and automatic recovery action commences
• an automatic letter is sent to Anita to advise debt and recovery details

For Kathleen:

• FTB reconciliation using Kathleen and Boris' ATI (Boris' ATI is only used for the period they were partnered) results in a debt
• Services Australia sends debt details back to the ATO with Boris’ tax file number (TFN) / Customer Reference Number (CRN)
• the debt is fully recovered and Boris is advised of the details on the Notice of Assessment (NOA)
• ATO recovery details are sent back to Services Australia
• Kathleen's record is updated to show that the debt has been fully repaid
• Kathleen is sent an automatic letter to advise debt and recovery details

Scott is partnered to:

• Martina from 1 July 2000 - 1 January 2001
• Catherine from 1 August 2001

Catherine thinks there will be an FTB debt.

Catherine and Scott lodge their income tax returns (ITR) on 10 September 2001.

Martina lodges an ITR on 1 August 2001.

The ATO transfers Scott's actual adjusted taxable income (ATI) to Services Australia.

The system determines that Scott was only partnered to Martina during the relevant financial year. They were not partnered on 30 June of that financial year therefore, Scott's consent is ignored.

For Martina:

• FTB reconciliation uses both their actual ATI and results in a debt
• debt details are sent to the ATO
• the ATO has issued Martina's NOA. The debt cannot be recovered from the tax refund. Details are sent back to Services Australia
• the debt is unparked on Martina's record. Automatic recovery action commences
• an automatic letter is sent to Martina to advise debt and recovery details

For Catherine:

• FTB reconciliation using Catherine’s income only, results in a debt due to maintenance income. Note: Catherine was single throughout the financial year
• debt details are sent to the ATO
• the ATO sends an activity back (to Services Australia) advising they have not recovered Catherine's debt
• the debt is unparked on Catherine's record. Automatic recovery action commences
• an automatic letter is sent to Catherine to advise debt and recovery details

Jamie is partnered to Alison for the entire 2000-01 financial year.

Jamie and Alison lodge their ITRs on 1 September 2001.

The ATO transfers Jamie's actual adjusted taxable income (ATI), tax file number (TFN) / Customer Reference Number (CRN) plus consent indicator to Services Australia.

Services Australia records show that Jamie is partnered to Alison. Jamie’s actual ATI is needed for reconciliation:

• FTB reconciliation cannot occur as Alison's actual ATI is not yet available. Jamie's ATI is stored but the consent is ignored
• Alison's actual ATI is passed to Services Australia showing FTB reconciliation resulted in a debt
• Services Australia send debt details to the ATO. Alison’s Notice of Assessment (NOA) has not been issued. The debt amount is recovered from the tax refund
• the ATO sends recovery details back to Services Australia. Alison's records are updated.
• a letter is issued to the customer to advise the result of FTB reconciliation and debt offsetting from the tax refund