Assessing and coding parental income for ABSTUDY, Assistance for Isolated Children (AIC) and Youth Allowance (YA) 108-02010090

The Parental Income Test (PIT) is applied to dependent YA, ABSTUDY and Assistance for Isolated Children (AIC) Additional Boarding Allowance (ABA) customers, unless a PIT exemption applies.

In most circumstances, the PIT is assessed using actual parental income figures, however in some situations a reasonable estimate of parental income may be accepted.

A reasonable estimate of parental income can be accepted where the:

• parent(s)/guardian(s) do not have taxable income that is assessed by the Australian Taxation Office (ATO)
• actual income for the relevant tax year is not known by the parent(s)/guardian(s)

This may apply when a:

• parent/guardian has been given an extension by the ATO to lodge their tax return, or
• parent/guardian has lodged their income tax return and the ATO is yet to finalise it, or
• current tax year assessment is appropriate

If there is doubt that an estimate is reasonable, evidence is required. For example:

• a letter from their accountant/tax agent advising an estimate of parental income
• an Income Statement provided by the Australian Taxation Office (ATO), or a Payment Summary (Group Certificate) and a Commonwealth statutory declaration, or
• for current year assessments:
  • an employment contract
  • a payslip showing year to date income

Where an estimate is accepted, the parent/guardian must provide evidence of the actual income as soon as it is available.

Debts may be raised for ABSTUDY and AIC ABA payments if:

• the actual income is higher than the estimate provided, and
• the estimate was over the Parental Income Free Area

ABSTUDY debts are usually the responsibility of the applicant, but in some circumstances, may be the responsibility of a third party. This could be an education provider, parent or guardian. Check to confirm which party directly received the overpayment.

AIC debts are the responsibility of the applicant.

For YA, debts are only raised in certain circumstances. Only Service Officers trained in debt raising make decisions about whether legally recoverable debt has occurred as a result of the application of PIT.

For staff trained in raising debts, see Raising Parental Income Test (PIT) debts.