FAO Income Previous year (FIPY) and Parental Income Test (PIT) processing for Youth Allowance (YA), ABSTUDY and Assistance for Isolated Children (AIC) 010-18062122

The FIPY Copy and PIT Copy processes generate when family assistance actual income data is re-used from a parent or guardian's record. These processes occur:

• during YA. ABSTUDY and AIC claim processing, known as FIPY Copy, and
• from 1 July to 31 December every year when confirmed parental income is received from the Australian Taxation Office (ATO) for the Youth Allowance and ABSTUDY annual parental income review, and the AIC End of Year review processes, known as PIT Copy

If a parent/guardian has a family assistance non-lodger exemption, they must provide Services Australia with their parental income details, including if their taxable income is below the Tax Free Threshold, via the:

• Advise Parental Income online service
• MOD JY - Parent(s)/Guardian(s) details - for the BASE Tax Year and CURRENT Tax Year for Dependent Youth Allowance or ABSTUDY Customers form, or
• SY012, Youth Allowance or ABSTUDY Parental Income Assessment
• Group 17 AIC End of Year review or SY040 Claim for AIC

FIPY Copy occurs during the new claim processing, where the actual parental income (if available) is automatically imported onto a dependent customer's record from the family assistance record, to assist with more efficient claim processing.

Parents and guardians will still need to complete and lodge their details via the Advise Parental Income online service, MOD JY, or SY040, as this collects information other than parental income that could affect the rate of payment or whether YA, ABSTUDY or AIC is payable. For example:

• family home address for Relocation Scholarship purposes
• parent/guardian marital status
• parent/guardian contact details
• whether a current year assessment needs to apply due to a drop in income
• voluntary maintenance arrangements
• rent details
• details for other dependent children
• bank account details (for under 18 year old customers)
• tax file number declaration

FIPY Copy is sufficient to verify the parental income components provided by the parent/guardian via the Advise Parental Income online service, MOD JY or SY040.

The FIPY Copy process will only occur when:

• there is a current PIT link
• the customer is claiming YA, ABSTUDY or AIC, and
• the parent(s)/guardian(s) record has verified actual income from the ATO

FIPY Copy will occur when the PIT links have been established within a claim. For claims processed in:

• Process Direct, a FIPY Copy will import available parental income data from FAO to the Manage Parental Income (NHI) table
• Customer First or Customer Record, a FIPY Copy will import available parental income data from FAO to the Household Income and Assets (NHI) screen when the PIT links are created or confirmed from the PIT Parent Selection (NPPS) screen

For more information on when a parent/guardian (and their partner) is required to supply their income details for a claim, see Completing Parent(s)/Guardian(s) details for the Base Tax Year and Current Tax Year (MOD JY).

From 1 July to 31 December each year, the actual parental income recorded on a Family Assistance parent or guardian's record, for the most recently completed financial year will be copied to the dependent YA, ABSTUDY or AIC customer's record. This occurs where the dependent customer is currently being assessed on base tax year actual income details only (that is, not a base or current tax year estimate).

A PIT Copy will only occur when:

• a dependent YA, ABSTUDY or AIC payment is current, suspended or assessed
• there is no estimated parental income currently recorded on the NHI screen
• a parent/guardian, of a dependent customer, received Family Tax Benefit or Child Care Benefit in the most recently completed financial year
• all assessable parents are PIT linked to the dependent customer and have finalised their income tax returns and the ATO have returned this data to the parent(s)/guardian(s) FIPY screen
• the ATO assessed actual income is greater than zero for a single parent/guardian or for both parents/guardians if they are both PIT linked
• the Maintenance Paid field on the NHI screen from the previous base tax year is zero

Note: if a customer is linked to two parents/guardians, a PIT Copy will only occur when both parents/guardians have had their income tax returns finalised by the ATO and both sets of income data have been returned to both parent/guardian records. If one parent/guardian has had their tax return finalised by the ATO, and the other has not, a PIT Copy will not occur.

The PIT Copy process does not occur when:

• there is no current PIT link
• the benefit status is cancelled
• a parental income estimate is coded for the relevant financial year
• the customer is independent
• the Maintenance Paid field on the NHI screen has a figure greater than zero
• NHI has already been coded with the same details as those recorded on the FIPY screen for the relevant financial year
• the parents' or guardians' income data has not yet been confirmed by the ATO
• the following income is recorded on the FIPY screen or the relevant Family Assistance screens for the appropriate tax year:
• Tax Exempt Foreign Income (FEF) screen
• Foreign Income (FFI) screen
• Tax Free Pension/Benefit (FTF) screen
• Deductible Child Maintenance Expenditure (FDM) screen

If a YA customer has been suspended for failing to return their annual PIT review (SUS-YAR), the system will continue to check and see if a PIT Copy can be undertaken during the suspension period. If, during the suspension period, the system is able to successfully undertake a PIT Copy, the parental income data will be copied to the customer's record and an automatic restoration will occur.

Where:

• a YA customer's parent/guardian has not completed the annual PIT review, and a PIT Copy was not able to occur before the end of the last entitlement period of the year, the customer's payment will CAN-PIA (Parental Income and Assets Not Provided) from the Entitlement Period Start Date immediately before or on 1 January
• an ABSTUDY customer's parent/guardian has not completed the annual PIT review, and a PIT Copy was not able to occur before 1 January, the customer's payment will go to a zero rate from 1 January
• An AIC applicant has not provided parental income in the End of Year review, and a PIT Copy was not able to occur before 1 January, the applicant will no longer receive Additional Boarding Allowance

These payments will not automatically restore, including when sufficient parental income (for a PIT Copy to occur) becomes available on the FIPY screen, for:

• YA determine whether the payment can be restored because sufficient parental income (for a PIT Copy to occur) became available within 13 weeks of the cancellation decision
• ABSTUDY, the parental income can be recorded from information obtained from the parent/guardian. Parental income can be updated on the NHI screen, which will result in a reassessment of the ABSTUDY record
• AIC, the parental income can be updated on the NHI screen when obtained from the applicant and staff will need to follow Receiving and assessing Assistance for Isolated Children (AIC) End of Year (EOY) review forms

Verification of the parental income is not required for annual PIT reviews. Data from FIPY can be used providing parent/guardian is asked whether they receive any of the following income in the relevant tax year:

• Foreign Income
• Tax Free Pension/Benefit
• Maintenance Paid

A PIT Copy manual follow up (CLI/MFU) will be created on the YA, ABSTUDY or AIC record, where a:

• PIT Copy has previously occurred
• the ATO sends new income data to the FIPY screen due to a reassessment of an income tax return

When making an unfavourable decision, speak to the customer:

• explain the decision
• give them a chance to provide more information, and
• advise their review and appeal rights