Processing Manual Follow-up (MFU) tax activities for Advance recoveries 107-19061240

When an advance payment is granted, the amount of the advance payment is added to the basic/taxable component of customer's payment for the year the advance is paid in. This amount will be reported on a customer's payment summary.

An advance payment will be recovered from any available component of the customer's payment. For example, if the customer's rate of payment reduces to only the rent assistance component, then the advance payment will be recovered from this.

The system will reduce the amount paid on the amended payment summary when the advance payment is recovered through deductions from the customer's ongoing payments, or if an advance payment debt is raised for the outstanding balance if the customer's payments are cancelled.

Where an advance is granted in one financial year but recovered in the subsequent year, the advance recovery will reduce the income in the second year.

For example, customer is granted the advance payment in May 2020 which is in the 2019/20 financial year but most of the recovery is done in the 2020/21 financial year (after 1 July 2020).

When the recovery occurs from any non-taxable component, this will cause a negative amount to display on the payment summary. This amount will need to be added back to the basic payment component on the payment summary. If the customer is on a taxable payment, this amount will need to reduce the gross taxable income.

Check the advance payment in the Advance Payment workflow/Manage Advances tool to determine which Social Security Entitlement payment the advance was paid from and repayment was made from (in case the customer has changed payments during the life of the advance).

Advance payments (ADV) debts generating MFU tax activities for a different financial year

An Advance Payment (ADV) debt may generate a MFU tax activity that displays a negative amount on the payment summary for a different financial year. This error is being investigated. See the Process page for a temporary workaround until the issue has been resolved.

If a MFU tax activity displays on the customer record the payment summary will not issue.

Correct any negative amount(s) on the MFU tax activity, and issue a payment summary.

Staff need to have access to the Tax Adjustment Details (TXAJ) screen to adjust a customer's payment summary. Payment Assurance Operations will process Advance recovery corrections. See the Resources page for how to request this access.