ATI is used in the FTB, CCB and baby bonus income tests when assessing an individual's (1.1.I.90) eligibility for these payments. While the income tests are different for FTB, CCB and baby bonus, the types of income used in the assessment are the same.
An individual's ATI is:
Centrelink uses either:
Act reference: FAAct Schedule 3 clause 1 Adjusted taxable income relevant to FTB and CCB, Schedule 3 clause 2 Adjusted taxable income
Individuals claiming FTB by fortnightly instalments or CCB by fee reduction are required to provide Centrelink with an estimate of family income for the current year.
Individuals claiming baby bonus are required to provide Centrelink with an estimate of family income for a 6 month period following the birth of the child, or the child's entry into care. For children born or entrusted to care on or after 1 January 2011, the 6 month period commences on the date that the individual or their partner become the primary carer of the child. Different rules apply where the child is born or entrusted to care before 1 January 2011. See 4.5.1 for further details.
If the individual chooses not to provide an estimate of family income for the current year, Centrelink will determine payment on the basis of an indexed estimate. The indexed estimate is worked out by adjusting the individual's most recent estimate by an indexation factor determined by movements in the average weekly earnings over the relevant 12 month period.
If an individual's payments are determined on the basis of an indexed estimate, it may be subject to a second adjustment once the individual's actual income for the previous financial year becomes known. Centrelink will adjust the actual income by an indexation factor determined by movements in the average weekly earnings over the relevant 12 month period and compare the result with the indexed estimate. Payments will be based on the higher amount for the rest of that income year.
Act reference: FA(Admin)Act section 20 Determination of rate may be based on estimate, indexed estimate or indexed actual income, section 20A Indexed estimates, section 20B Indexed actual incomes, section 38(3) Estimate of adjusted taxable income
Policy reference: FA Guide 1.1.I.85 Indexed income - actual or estimate (FTB)
For the purposes of FTB Part A and CCB, if an individual is a member of a couple, their ATI for a tax year includes their partner's (1.1.P.30) ATI for that year.
For the purposes of FTB Part B, if the individual is a member of a couple, only the ATI of the lower income earner (1.1.L.40) is used to calculate the rate of FTB Part B.
Example: William and Erica receive FTB Part A and FTB Part B. William is self-employed and has an ATI of $5,500 per year and Erica has an ATI of $45,500 per year. Erica works part-time and is the primary carer (1.1.P.120) of the children. Their entitlement to FTB Part A and CCB is worked out using their combined income of $51,000. Their entitlement to FTB Part B is however calculated on William's income of $5,500 a year. This is because whereas Erica is the primary carer, William is the lower income earner.
For the purposes of baby bonus, if an individual is a member of a couple on the day the claim is made, their ATI for the 6 month income test period includes their partner's ATI for that period.
Act reference: FAAct Schedule 3 clause 3 Adjusted taxable income of members of couple, section 36 When an individual is eligible for baby bonus in normal circumstances (refer to subsections 36(2)(d), 36(3)(e), 36(4)(c) and 36(5)(d))
The income used to assess an individual's FTB or CCB eligibility is the income for the year to which the claim relates. Where an individual claims a payment in the current income year, they must make a reasonable estimate of their income for that year.
Note: The income used to assess an individual's eligibility for baby bonus is the income for the relevant 6 month period following the birth of the child, or the child's entry into care. This period can relate to more than one income year.
If the individual has estimated their family income, Centrelink must determine if the estimate is reasonable. If it is determined by Centrelink that the estimate is not reasonable the individual has no entitlement to receive FTB by instalment or CCB as reduced fees at more than the zero rate and is not eligible for baby bonus. The individual may still be eligible for FTB after the end of the financial year or CCB after the end of the current or following financial year when their actual ATI is known.
Act reference: FA(Admin)Act section 20 Determination of rate may be based on estimate, indexed estimate or indexed actual income, section 28A Variation of instalment entitlement determination where estimate of an amount is not reasonable
FAAct section 36 When an individual is eligible for baby bonus in normal circumstances (refer to subsections 36(2)(d), 36(3)(e), 36(4)(c) and 36(5)(d))
For annualising income when an individual dies during an income year, see 188.8.131.52.
Last reviewed: 13 May 2013