Automatic Uplift of income estimates 108-05030050

The process relates to the Automatic Uplift of income estimate for Family Tax Benefit (FTB) and Child Care Subsidy (CCS). If the customer has not given an estimate for the new financial year, Services Australia will apply a default estimate. This measure is designed to reduce the risk of debt for families.

The estimate for the new financial year (the default estimate) is calculated by applying an indexation factor to the customer's most recent estimate or actual income for the previous financial year. The indexation factor is aligned with changes to the Australian Average Weekly Earnings and may not result in an increase to the existing estimate.

Before the start of the new financial year, income tested families will get a letter as part of the New Financial Year Assessment (NFYA) review process. Customers will be given the choice of either:

• providing their own income estimate for the coming financial year, or
• accepting the default estimate that has been automatically calculated for them

If a customer does not give a reasonable estimate for the new financial year, the default estimate will automatically be used to calculate their rate of FTB and/or CCS.

Second stage Automatic Uplift will occur where:

• the customers current FTB/CCS rate is calculated based on the default estimate (Uplift 1), and
• the customer and/or their current partner lodges a tax return for a previous financial year, and
• the new indexed actual income figure (calculated on the previous financial year actual income) is higher than the default estimate used to calculate Uplift 1

The second stage Automatic Uplift can occur more than once if:

• actual income for the customer and their partner is received from the ATO at different times, or
• amended actual income is received from the ATO and the new indexed actual income figure (based on amended actual income) is higher than the indexed actual income currently being used to calculate the customers FTB rate

Some customers not included in the first stage Automatic Uplift may be subject to the second stage Automatic Uplift. For example, if an estimate is not recorded for themselves or their partner.

The ATO confirms certain components of Adjusted Taxable income (ATI), including:

• taxable income
• reportable fringe benefits
• exempt reportable fringe benefits
• reportable superannuation contributions
• net investment losses
• tax exempt foreign income

When these actual income component details are received from the Australian Taxation Office (ATO) for the customer or their current partner, the system will compare:

• the relevant income components currently being used to work out ongoing FTB/CCS, and
• the person's actual income as advised by the ATO, adjusted by the indexation factor

If the indexed actual income amount is greater than the current estimate, the second stage Automatic Uplift process will start.

When actual income is received for one member of a couple, the system will set a review for 14 days before calculating a new default estimate, to await the receipt of the partner's actual income. If actual income for the other member of the couple:

• is received within 14 days, the new default estimate will apply to both members of the couple
• is not received within 14 days, the new default estimate will apply for one member of the couple, and the existing default estimate for their partner

If a default estimate (Uplift 1 or Uplift 2) results in the customer exceeding the relevant FTB income threshold FTB will cancel due to income (CAN-INC).

If FTB is cancelled and the customer is providing a revised estimate below the income threshold, FTB may be restored from the date the revised estimate is given. A lump sum claim will be needed after the end of the financial year to assess the CAN-INC non-payment period.