Reconciliation of Family Tax Benefit (FTB) 007-11010000

For customers and partners required to lodge an income tax return, annual FTB entitlement is calculated using:

• income details transferred from the Australian Taxation Office (ATO), and
• any other actual adjusted taxable income (ATI) recorded

A completed and accepted non-lodgement advice provides the:

• non-lodgement exemption reason, and
• income details to be used to reconcile FTB

If Services Australia have not accepted a non-lodgement advice but the income details are considered reasonable, the income declaration will still be recorded on the FAO Income for Previous Year (FIPY) screen. This income will be used in reconciliation if an ATO 'Return Not Necessary' (RNN) advice is later received. For CCS ex-partner income details, record this within Process Direct via the EXFNLE screen.

The following may be included during FTB reconciliation once adequate income or not required to lodge details are available:

• FTB Part A and Part B supplements based on ATI. From 1 July 2016, payment of FTB Part A supplement is subject to an income limit. There are no exemptions from the FTB Part A supplement income test
• Single Income Family Supplement (SIFS) based on taxable income. Note: SIFS is not payable to new claimants for 2017-18 and later financial years. Grandfathering provisions apply to current customers

For customers to receive their full annual FTB entitlement, income lodgement requirements must be met by the end of the lodgement year (extended lodgement year for 2011-12 or earlier years).

Reconciliation can result in:

• No adjustment
• A top-up amount:
• This can be used to offset outstanding family assistance debts. A top-up amount can be used to repay family assistance, social security, student assistance and Paid Parental Leave scheme payment debts, whether or not the customer has a repayment arrangement in place
• An FTB top-up (including supplements and SIFS if entitled) can only be paid if, by the end of the lodgement year (extended lodgement year for 2011-12 or earlier years), they lodge their tax return, or notify they are not required to lodge a tax return
• An overpayment. This may be recovered from the customer's tax refund (or their partner's if they have given consent). Any remaining overpayment amount is raised as a debt

FTB reconciliation can automatically occur from 2 July of the lodgement year once all information is available including adequate income details or not required to lodge information for the customer and their current partner.

Partial reconciliation will occur from 2 July of the lodgement year if only ex-partner actual income details are needed for reconciliation to occur. Special processing applies for customers with an ex-partner.

Reconciliation will remain pending until all required information is available for reconciliation.

The non-lodger process applies if expected actual income details or not required to lodge details are not available within the relevant time frame.

Note: from 1 July 2018, if a child does not meet the immunisation requirements and they are serving an FTB immunisation grace period at the end of the financial year, FTB reconciliation will not occur until the child meets immunisation requirements or the FTB immunisation grace period ends (whichever occurs first). An FTB immunisation grace period can last for up to 63 days from the date the child fails to meet immunisation requirements. See Immunisation requirements for FTB Part A from 1 July 2018.

Reconciliation is a two-step process that uses the actual dates of any changes in the family's circumstances to work out their correct FTB rate. The steps are:

• Income reconciliation for income reconciliation periods where the customer's income estimate was used to work out their FTB rate during the relevant financial year. If available, actual adjusted taxable income details are used to work out correct FTB entitlement
• Maintenance reconciliation for any periods the customer or their partner was entitled to claim child support. The system limits FTB Part A to base rate for the child for periods appropriate maintenance action was not taken. The Maintenance Income Test is applied using actual child support received for customers with a child support collect case and the deemed amount for private collect cases. Customers with a child support entitlement registered for collection by Child Support may benefit from the Maintenance Income Credit

Reconciliation is generally an automatic process but in some cases manual intervention is needed to finalise the reconciliation process.

If income details or circumstances for the relevant financial year are updated after FTB reconciliation has occurred, re-reconciliation will occur automatically using the new details.

There are restrictions with regard to disclosure and confidentiality of customer, partner and ex-partner information. Privacy, Person Permitted to Enquire (PPE) and implied authority provisions apply.

P24845 - in some cases where FTB for a child is being paid to the step parent, care is not being applied correctly. For more information, see Notification and assessment of shared care arrangements for FTB.