How a social worker assesses and codes a deferral where requirements are met 003-12050020

The Prohibition of Family Tax Benefit Instalment Payments (PIP) is when a customer's Family Tax Benefit (FTB) fortnightly instalments are ceased (reduced to nil rate) because the customer or their partner has an outstanding non-lodger debt for any financial year from 2000-01 onwards when either person was in receipt of FTB.

FTB instalment payments will only be payable via a lump sum at the end of year reconciliation when their outstanding tax returns have been lodged. Customers are still entitled to non-cash ancillary benefits e.g. Health Care Cards.

A deferral of PIP can be granted before or after PIP has been applied, allowing FTB instalments to continue or recommence. The social worker can:

• assess the customer's situation in relation to family and domestic violence
• recommend a deferral if they determine that the customer and/or family may experience family and domestic violence, if they request the partner to lodge their income tax return/s

If a couple have separated, the ex-partners non-lodgement of returns can no longer affect the FTB payments of the customer. The customer can reclaim FTB.

If a customer cannot lodge their tax return because of the actions of their ex-partner, it is possible to grant a PIP deferral for a specified period.

Where the customer (not the partner) is the non-lodger, then PIP will still apply and may also be carried over into a new relationship. See information below on blended families.

Deferrals for family and domestic violence:

• can only be determined by a social worker, and
• will be for up to 6 months at a time from the time of assessment, backdating is not possible

Social worker deferrals do not prevent the PIP Sunset Clause being applied to customers if they or their partner, have not lodged 3 or more financial years' taxable income. A Families and Parenting Service Support Officer will determine whether special circumstances apply which will allow a deferral.

A permanent social worker PIP deferral can occur where the customer has social worker deferrals (family and domestic violence) granted continuously for 6 years (12 x 6 month deferrals with no breaks in deferral), so long as:

• they remain partnered and have less than 3 years outstanding income, or
• the actions of an ex-partner is preventing the customer from lodging their tax returns

Social worker deferrals can include where the violence was threatened or carried out against a child, or another member of the family who resides in the household and the customer has been unable to lodge their tax return.

Customers with outstanding tax lodgements can only reduce their risk of FTB cancellation by:

• submitting their (or their partners) outstanding tax lodgements
• advising family assistance they are not required lodge
• applying for an exemption from lodging with the Australian Taxation Office (ATO) (that is, if they had no earnings)
• separating from their non-lodging partner

In all cases customers should be advised to resolve tax return issues with the ATO.

PIP is applied to both members of the blended family but deferrals can be applied to customers individually.

If one member of the couple has not lodged their income tax return, PIP is applied to FTB for both customers.

Example: a non-lodger may separate from partner X and form a new blended family with partner Y and their children. Partner X will no longer be subject to this PIP, however the PIP will now apply to partner Y, even if partner Y is a lodger/not required to lodge tax returns. For a blended family, PIP will be applied to both partners, however deferrals can be applied to the customer individually.

Under the special PIP rules for blended families, the combined FTB can be redistributed between the partners. Partner Y can arrange to receive up to 99% of the total amount of household FTB - leaving the non lodger with only 1% that has the PIP applied to it. Partner Y can apply for a deferral (social worker or otherwise). This effectively means the blended family under a deferral can continue to receive 99% of their combined FTB payment, however there will be no back payment on reconciliation to the non lodger if/when they eventually lodge their tax returns. This may exacerbate a family and domestic violence situation. Therefore the impacts and risks of this redistribution option should be carefully considered before this is taken up.

In line with a zero tolerance approach to harm of children, if a staff member in the course of their duties observes behaviour, which raises concerns about a child or young person's safety, Services Australia sets out specific steps that must be taken. Follow the agency's Risk Identification and Reporting model when identifying and responding to child safety concerns. See Risk identification and management of threats to the safety or welfare of a child for more information regarding this model and the agency's commitment to the safety of children and young people.