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

See Parental Income Test (PIT) for a description of all sources of income that are assessed under the PIT.

Select one of the options below:

If actual income is being provided, check if the income needs to be verified. See documents accepted as evidence of parental income. If a request for evidence is required, see Requesting information.

If the customer is on:

• Youth Allowance (YA), go to Step 2
• ABSTUDY or AIC Additional Boarding Allowance (ABA), go to Step 3

Only accept an estimate of parental income if the estimate is considered reasonable and there is no doubt about the information supplied.

See also Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) .

Is the estimate reasonable?

• Yes, for
  • Youth Allowance (YA), go to Step 2
  • ABSTUDY or AIC Additional Boarding Allowance (ABA), go to Step 3
• No, request verification/evidence, see Requesting information. Note: for examples see Documents accepted as evidence of parental income

Does the customer receive YA, and their payment is suspended?

• Yes, see Table 2 > Step 1
• No, go to Step 3

If the update is to:

• code a new or updated estimate of parental income, go to Step 4
• assess a request for an extension of time to provide actual income figures, go to Step 5
• update details of actual income, go to Step 6
• assess a request for a current year income assessment, see Increase or decrease in parental income for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC)

To code estimates select below:

Customer First

If updating in Customer First, make sure to select the correct system. For:

• ABSTUDY: updates must be made in the ISS system
  • To change to ISS ABY, code SVABY in the Next field and select Enter
• AIC: updates must be made in the ISS system
  • To change to ISS AIC, code SVAIC in the Next field and select Enter
• Youth Allowance (YA): the updates must be made in the NSS system

ABSTUDY or YA

For ABSTUDY or YA, update the NHI screen:

• Event Date: field, see Event date for parental income
• Fin Year Ending: field, with the relevant Base or Current Tax year as appropriate
• Estimate: field, 'Y' yes
• Review Date: field: the date the parent advises that actual income details will be available, except when the review date:
  • is later than 31 August of the year following the base tax year. The system will not accept it
  • would be after the customer's Student End Date (SED). Use 28 days before the SED.
    If this is not possible because the SED is in the next 28 days, use 2 business days after the date the estimate is being coded
• Taxable Income and all other income fields as appropriate
• Source: field, as appropriate
• DOR: field, as the day the information was provided to Services Australia
• Action: field:
  • 'I'nsert where no estimate is recorded for the relevant tax year
  • 'U'pdate where an existing estimate is being updated
• Accept Change: field, if the system calculated Event Date is:
  • correct, code Yes
  • incorrect, contact Local Peer Support to decide if the record needs to be escalated. See Technical Support Model
• If an overpayment occurs, go to Step 9
• If arrears occur, go to Step 10
• If no adjustment, go to Step 11

AIC ABA

For AIC ABA update the NHI and EILA screens.

Suitable proof of income must be provided to confirm the advised parental income for payment of ABA.

• Contact the parent/guardian (the AIC applicant) by phone and send them a manual letter to ask for evidence to confirm the actual income figure
• Code the NHI screen:
  • Estimate field, 'N'
  • Taxable Income and all other income fields as appropriate
  • Source field, as appropriate
  • DOR field, as appropriate
  • the action is 'I'nsert
    Note: coding a 'Y' in the Estimate field can incorrectly lead to the automatic suspension of not only the ABA but the Basic Boarding Allowance (BBA) as well
• Code the Living Arrangement Details (EILA) screen:
  • Living Arrangement Start Date field, review date (this should align with the AIC term instalment dates, that is 01/04/xx)
  • Annual Boarding Fees field, $1
  • Action field, 'I'nsert
• Finalise the activity via the Assessment Results (AR) screen
• Record details in a DOC
• If an overpayment occurs, go to Step 9
• If arrears occur, go to Step 10
• If no adjustment, go to Step 11

• Go to the NHI screen
• Financial Year: field, with the relevant Base or Current Tax year as appropriate
• Start Date: see Event date for parental income
• Estimate Indicator: field, 'Y' yes
• Review Date: field: the date the parent advises that actual income details will be available, except when the review date:
  • is later than 31 August of the year following the base tax year. The system will not accept it
  • would be after the customer's Student End Date (SED). Use 28 days before the SED.
    If this is not possible because the SED is in the next 28 days, use 2 business days after the date the estimate is being coded
• Taxable Income: field, and all other income fields as appropriate
• If an overpayment occurs, go to Step 9
• If arrears occur, go to Step 10
• If no adjustment, go to Step 11

Before extending the Parental Income Test (PIT) estimate review date, check the parent(s)/guardian(s)' FAO Income for Previous Year (FIPY) screen. If there is verified actual income for the relevant financial year, go to Step 7.

For YA or ABSTUDY Living Allowance:

In Customer First, update the existing NHI entry:

• Review Date: field: the date the parent advises that actual income details will be available. The system will not allow a review date later than 31 August of the year following the base tax year. Note: do not accept a review date for a student that is after their student end date
• Taxable Income and all other income fields, if a change in estimate is also provided
• Action: field, 'U'pdate
• Accept Change: field, if the system-calculated Event date for parental income is:
  • correct, code Yes
  • incorrect, contact Local Peer Support to decide if the record needs to be escalated. See Technical Support Model

In Process Direct, edit the existing NHI entry:

• Review Date: field, the date the parent advises that actual income details will be available. The system will not allow a review date later than 31 August of the year following the base tax year. Note: do not accept a review date for a student that is after their student end date
• Taxable Income and all other income fields, if a change in estimate is also provided
• Select Assess to go to the Entitlement (ELD) screen

When the review date on the NHI screen is reached, a letter is issued requesting verification of the estimated income.

If there is no reply within 21 days, the customer's payment automatically suspends PIE - Failed to verify Parental Income. If the evidence is still not available, an extension may be given to restore the customer's payments.

For ABSTUDY Living Allowance, when the review date on the NHI screen is reached, a Manual Follow-up (MFU) is created with the review reason PIT Estimate Reminder PIT Estimate Review. This MFU is not required and can be cancelled.

Procedure ends here until verification of actual income supplied.

For AIC ABA:

Suitable proof of income must be supplied for payment of ABA.

If the Annual Board Fees amount on the EILA screen:

• Has already been coded $1:
  • No further action is required, as the applicant is only eligible for Basic Boarding Allowance
• Has not been updated to $1, code the EILA screen with:
  • Living Arrangement Start Date: field, appropriate date to stop future payment of ABA when verification of parental income has not been provided for the relevant tax year
  • Annual Boarding Fees: field, as $1
  • Action: field, 'I'nsert
  • Source: field, as appropriate
  • DOR: field, system date
• Finalise the activity via the Assessment Results (AR) screen. This will stop future ABA payments
• Record details in a DOC

Procedure ends here.

Parent/guardian has provided actual income, including where they have previously provided an estimate and has now provided actual income details.

Any parent/guardian who is:

• Required to lodge an Income Tax Return must provide Services Australia with evidence of their income for the parental income to be considered verified. For examples on how verification can be provided, see:
  • Documents accepted as evidence of parental income
  • Documents required for Centrelink new claims
• Not required to lodge an Income Tax Return, is generally not required to provide evidence of parental income
  • If the available evidence to support the parent(s)/guardian(s) income for the relevant tax year is sufficient, no verification documents are required
  • See FAO Income Previous year (FIPY) and Parental Income Test (PIT) processing for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC)

Notice of Assessment (NOA) consideration:

A superannuation withdrawal under the First Home Super Saver (FHSS) Scheme is not included as assessable income for calculating the Parental Income Test.

The treatment of these withdrawals is different between Services Australia and the Australian Tax Office (ATO):

• For ATO purposes, part of the amount released is considered taxable income. It will be reflected on an individual’s NOA as taxable income
• The income received by the agency via the data exchange will automatically have amounts released under the FHSS excluded. This will not be the case for an individual's NOA
• A customer supplying an NOA who has had a superannuation withdrawal under the FHSS will need to advise the amount considered taxable. This can be manually excluded for the agency's purposes

If the parent(s)/guardian(s)' FAO Income for Previous Year (FIPY) screen displays actual income, use this information. However, if the parent/guardian contacts and they have any of the following income estimates recorded on their family assistance record:

• obtain the actual income information for these income components from the parent/guardian:
  • Tax Exempt Foreign income (FEF screen)
  • Foreign Income (FFI screen)
  • Tax Free Pension/Benefit (FTF screen)
  • Deductible Child Maintenance Expenditure (FDM screen)

Go to Step 7.

A parental income estimate may be coded on the NHI or the Independent / Homeless / Away From Home Details (NIH) screen. Where the estimate indicator is Y on the:

• NIH screen from the grant of self-supporting independence for students from regional and remote areas, go to Step 8
• NHI Screen for a dependent customer, update the NHI screen when verification of the parental income is provided, or is available via the parent(s)/guardian(s) FIPY screen

Select from the relevant options below:

• Event Date: field, see Event date for parental income
• Fin Year Ending: field, with the relevant year
• Review Date: field, blank (if previous entry was an estimate, review date must be deleted)
• Estimate: field, 'N' - No
• Taxable Income and all other income fields, as appropriate
• Source: field, as appropriate
• DOR: field, as the day the information was provided to the agency
• Action: field, 'I'nsert
• Accept Change: field, if the system calculated Event Date is:
  • correct, code Yes
  • incorrect, contact Local Peer Support to decide if the record needs to be escalated. See Technical Support Model

Note: The system automatically codes $1 in the Taxable Income field on NHI if income of $0 is coded. This is to avoid the payment cancelling PIA (Parental Income and assets not provided) inappropriately.

For AIC:

Code the Annual Boarding Fees field on the EILA screen with the actual boarding costs for that year:

• If an overpayment occurs, go to Step 9
• If arrears occur, go to Step 10
• If no adjustment, go to Step 11

• Go to the NHI screen
• Event Date: see Event date for parental income
• Fin Year Ending: field, with the relevant year
• Estimate: field, 'N' - No
• Review Date: field, blank (if previous entry was an estimate, review date must be deleted)
• Taxable Income: field, as appropriate
• If an overpayment occurs, go to Step 9
• If arrears occur, go to Step 10
• If no adjustment, go to Step 11

The system automatically codes $1 in the Taxable Income: field on NHI if income of $0 is coded. This is to avoid the payment cancelling PIA (Parental Income and Assets Not Provided) inappropriately. Process Direct may continue to display $0, Customer First will show $1.

A parental income estimate may have been recorded on NIH when granting self-supporting independence for students from regional and remote areas. If the parental income estimate indicator on NIH is Y make updates using Customer First. Where the actual parental income for the appropriate tax year is:

• under the parental income threshold:
  • update the estimate indicator to N, and
  • delete the review date
• over the parental income threshold:
  • correct the NIH screen to reject independence
  • PIT links will have been ended automatically when independence was granted. Update NPPS to start links to PIT parents again from the day after the previous PIT link end date. See Creating, updating and ending Parental Income Test (PIT) links for dependent student, Australian Apprentice and job seeker customers

If payment is suspended Failed to Verify Parental Income (PIE), restore the payment. For:

• YA, see Restoration of Youth Allowance (YA) or Austudy for full-time students and Australian Apprentices
• ABSTUDY, see Restoration of ABSTUDY payments

Finalise the activity and record details of the update in a DOC.

Procedure ends here.

The system will create an overpayment where:

• a 1 October event date is being applied by the system and the customer has received at least 1 payment after 1 October, or
• actual parental income is greater than the estimate, and
• the date of receipt (DOR) is after the Event Date recorded on NHI

The system will create an overpayment from the entitlement period commencing immediately before1 October, or 1 January until the Entitlement Period End Day (EPED) of when the customer was last paid.

Where an overpayment has been created:

For a YA customer:

• send the overpayment for investigation:
  • on the Assessment Consequences (ASC) screen in the Debt Action field, select INV
  • Go to Step 11

For ABSTUDY and AIC customers, see Raising Parental Income Test (PIT) debts

For YA

If YA payment is current and NHI is being updated with a date of receipt (DOR) that is between:

• 1 September and 31 December the system will generate arrears correctly from the DOR if the customer is entitled
• 1 January and 31 August the system will generate arrears from the Event Date recorded on NHI. The customer is only entitled to arrears from the DOR that the actual parental income was provided

If the arrears are not correct Service Officers must determine if:

• the arrears should be zeroed off in full:
  • If the DOR is within the same entitlement period as the update being made, then arrears should be zeroed off in full
• a partial adjustment is required:
  • If the DOR is in a previous entitlement period and the customer has received at least one payment. They are entitled to arrears from the DOR

Where a manual adjustment is required, Service Officers must complete this using the Rate Details (RATS) screen in Customer First, or the Daily Rate Component (RAC) screen in Process Direct. See How to manually calculate arrears

• In Customer First:
  • On the Assessment Results (AR) screen, from the left hand menu select the payment type arrears will be paid with
  • Select RATS
  • Select relevant period on RAC and make any changes to the rate
  • Update the Man Adj $ and Man Adj Rsn fields
  • Select ADJ as the manual adjustment reason
• In Process Direct:
  • Select Assess to go to the Entitlement (ELD) screen
  • Adjust the relevant lines under the Daily Rate Component (RAC)
  • Scroll down to more options and apply RAC changes before selecting Finish

Go to Step 11

For ABSTUDY

ABSTUDY customers are entitled to arrears for any period where:

• their rate of payment has reduced due to a parental income estimate, and
• the actual parental income amount is less than the estimate

Service Officers must check the NHI screen to ensure arrears are paid from the Event Date to the date the customer was last paid.

Go to Step 11

For AIC

AIC applicants are entitled to arrears for ABA for any periods where:

• the student qualifies for Basic Boarding Allowance
• the income level of the applicant and (if applicable) their partner is at or below the upper limit for the Parental Income Test (PIT), and
• the student's boarding costs exceed the level of Basic Boarding Allowance less $250 for incidentals. See Rates and Thresholds page and search Basic Boarding Allowance for current rates

Go to Step 11.

Once all actions have been taken, finalise the activity via:

• Assessment Results (AR) in Customer First
• Entitlement (ELD) screen in Process Direct

Record details in a DOC including any of the following information where appropriate, the:

• date of Issue of the parent's tax Notice of Assessment
• amount and date range of any arrears paid
• amount and date range any arrears manually adjusted
• amount and date of any overpayments
• cancellation if parental income is too high (CAN/PIH)