Recording not required to lodge advice and previous year income 007-11010080

FTB, CCB and CCS reconciliation cannot occur until any required actual income details for the customer (and their partner/ex-partner) transfer from the Australian Taxation Office (ATO). Partial reconciliation can occur for FTB using customer actual income alone if only an ex-partner's actual income details are outstanding.

CCS is not subject to partial or interim reconciliation and all CCS customers must meet CCS reconciliation requirements by confirming all income estimated during a CCS year. This includes confirming income for any partners or ex-partners they may have had during relevant CCS periods in the year.

Income for CCS is confirmed by either:

• lodging an Income Tax Return with the ATO
• advising Services Australia they are not required to lodge an Income Tax Return and providing their actual income, or
• submitting a non-lodgement advice to the ATO, and advising actual income to Services Australia

A person must consult the ATO website and use the 'Do I need to lodge a tax return?' online tool or an accountant to find out if they are required to lodge a tax return, including when their income is below the tax free threshold. The Resources page contains a link to the online tool.

For FTB, a person may need to lodge a tax return if they:

• received an income support payment for the whole financial year, and
• had any ISP nil rate periods due to employment income

Refer the customer to the ATO website for more information. This does not apply for CCS. All CCS customers (and their partner/ex-partner) must provide their actual income details for reconciliation to occur, unless the customer requests a Most Recent Estimate (MRE) exception to allow reconciliation to be calculated using the ex-partner's most recent estimate.

A non-lodgement advice is accepted if the person meets all of the following criteria:

• Single Touch Payroll (STP) data does not indicate that a tax return is required, see the Single Touch Payroll Families (STPF) screen for the relevant year in Process Direct
• taxable income reported by customer or visible on the STPF screen is equal to or below the relevant tax free threshold
• no tax was paid or withheld from any amount of income
• the person had no net investment losses, reportable superannuation contributions, exempt reportable fringe benefits, other reportable fringe benefits or tax exempt foreign income
• if they have a child support assessment in place to pay or receive child support, they received ISP for the whole financial year
• was not involved in a business or a beneficiary of a trust

Note: when the above criteria is met, Services Australia are able to accept non-lodgement advice for FTB and CCS balancing purposes. Customers with a Child Support assessment in place must be advised to check with the ATO to ensure they do not have any other requirements to lodge for ATO or child support purposes.

If all of the above criteria is not met, refer the customer to the ATO to check their details, and either:

• lodge an income tax return, or
• complete an ATO 'non-lodgement advice'

Advise them to visit the ATO website for more information.

• staff still need to run the non-lodgement exemption workflow regardless of whether or not non-lodgement will be accepted so income details can be recorded
• single ISP customers with taxable income over the tax free threshold may still have a requirement to lodge. See the Resources page for an example

Single Touch Payroll (STP) is an Australian Taxation Office (ATO) initiative where employers submit payroll data to the ATO with each pay event. Where a customer or their partner is a mutual client of Centrelink and the ATO, the ATO will share their STP data with Services Australia.

STP payroll data may be used to determine if a non-lodgement advice, provided through self-service channels, is accepted. Services Australia will not be able to accept a non-lodgement advice if STP data indicates the person has a tax lodgement requirement. For example, a tax lodgement may be required if a person has:

• had tax withheld, regardless of the amount of income
• taxable income above the tax free threshold
• any amount of reportable fringe benefits, reportable superannuation contributions or tax exempt foreign income

The use of STP data does not currently extend to the Family Assistance Office non lodgement exemption workflow in Customer First.

From the 2020/21 financial year onwards, previous financial year STP data can be viewed on the STP Data for FTB Customer (STPF) screen in Process Direct, including:

• if a tax return is required (based on STP information)
• the reasons a tax return is required
• the amount of STP reported salary and wages (for the customer only)

The amount of STP reported salary and wages is in addition to any taxable income support paid for the year.

This information can help to determine the expected outcome of the non-lodgement advice before the Family Assistance Office non lodgement exemption workflow in Customer First is run.

Note: the 'Reconciliation income source' field on the STPF screen should not be used to determine if income has been confirmed or if reconciliation has completed. Use FTB and/or CCS reconciliation screens.

To receive their full annual FTB entitlement and avoid the non-lodger and late lodger process, customers must meet income lodgement requirements by the end of the lodgement year (extended lodgement year for 2011-12 or earlier years).

To ensure that CCS customers are assessed correctly for their CCS entitlement, customers must also meet income confirmation requirements by the first and second deadlines. If a CCS customer has special circumstances preventing them from meeting income confirmation requirements, they may request an extension to the deadline. See Reconciliation of CCS for more details.

FTB customers with special circumstances preventing them from confirming their income within the allowed timeframe may be granted an extension of time to meet the requirement.

Customers can notify that they or their current partner are not required to lodge a tax return for the last 3 financial years and provide their income details by using:

• their Centrelink online account Advise non-lodgement of tax return option
• Express Plus Centrelink mobile app

CCS customers cannot advise their ex-partner is not required to lodge via online services. This information must be updated by a Service Officer.

This workflow is used to record 'advise non lodgement of a tax return' and income for the non-lodgement year. It guides a discussion in providing a non-lodgement and income declaration.

This workflow is available in Customer First only. The version located in Process Direct is still being developed. Do not use in any circumstances.

Only run the workflow if:

• the customer has language or literacy barriers affecting their capacity to complete updates using self service, or
• the customer is advising non-lodgement for a financial year more than 3 years in the past

The 'not required to lodge' advice may or may not be accepted. Mostly, this is automatically determined based on responses to the question assessment and known information about the customer's circumstances. Service Officers should always check the outcome is reasonable before finalising the workflow. If an automatic determination is not reasonable, a Service Officer can manually change the outcome.

If the income declaration is considered reasonable but the non-lodgement declaration is not accepted, the income declaration will still be recorded.

For CCS, ex-partner details cannot be updated using this workflow. Code them separately in Process Direct.

For the declared income and 'not required to lodge' exemption to be used, the customer must acknowledge that:

• income may still be confirmed with the Australian Taxation Office (ATO) using data such as payment summaries lodged by employers and declarations by financial institutions
• if a tax return is later lodged, actual income details will be transferred from the ATO and used to review family assistance entitlement

If the 'not required to lodge' advice is not accepted, the customer or their partner must:

• lodge a tax return, or
• complete an ATO non lodgement advice with the ATO

Details will then be transferred from the ATO and used to reconcile family assistance.

Note: CCS customers must also confirm their income with Services Australia even if they have completed the ATO non lodgement with the ATO.

If Services Australia have not accepted the 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 non lodgement advice is later received. For CCS ex-partner income details, record this within Process Direct via the EXFNLE screen.

FTB top-ups, supplements, lump sum claim amounts and instalment arrears can be used to recover any overpayments for:

• Family Assistance
• Social Security
• Student Assistance, and
• Paid Parental Leave

This will occur even if the customer has a current payment arrangement, or, in some cases, where the debt is paused or temporarily written off.

CCS arrears can only be used to recover CCS/CCB/CCR debts, excluding Job Education and Training (JETCCFA) debts.

If exceptional and/or unforeseen circumstances apply which may cause the customer to suffer severe financial hardship, FTB customers can request to be temporarily excluded from debt recovery prior to any money being taken from their arrears, lump sum or top-up payments. This is not applicable for CCS.