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The purpose of the new financial year assessment of FTB and CCB recipients is to ensure that recipients who choose to receive their entitlements through the FAO as fortnightly payments and/or fee reductions are assessed against their current circumstances, including an estimate of their ATI from 1 July of each year.
Recipients are contacted between April and May of each year by a written notice. The notice requests recipients to provide estimates of their and their partner's income for the new financial year.
The NFYA letter provides recipients with 2 options in estimating their incomes:
Note: If a recipient fails to respond to the NFYA letter, their rate of FTB or CCB will be assessed using the indexed estimate amount advised in the letter. If a recipient chooses to accept the indexed estimate as provided by the FAO, or if the indexed estimate is applied by default (because the recipient fails to respond), a second indexation process may occur when the recipient's ATI becomes known. The FAO will index the actual ATI (as provided by the ATO) by movements in the average weekly earnings over the relevant 12 month period. The indexed actual income will then be compared to the indexed estimate and the higher amount will be used to determine the recipient's rate of payment.
Through the NYFA process, an estimate of income is ascertained and used to determine a recipient's rate of FTB and/or CCB from the beginning of the new financial year. Recipients may also choose to revise their income estimate for the current financial year at this time. In addition, CCB recipients are contacted in June and advised of their CCB percentages for the current financial year and the next financial 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 20C Indexed estimates and actual incomes for members of couples, section 31A Variation of instalment entitlement determination to reflect revised adjusted taxable income estimates, section 31C Variation of instalment entitlement determination to reflect indexation of adjusted taxable income, section 31D Variation of instalment entitlement determination to reflect indexation of adjusted taxable income
Policy reference: FA Guide 4.9.3 Outcomes of New Financial Year Assessments
Individuals, who apply for FTB between the issue of the NFYA letter and the end of the current financial year will be provided with a letter when granted payment. The letter should advise of the estimated income amount that will be used for the new financial year's assessment of FTB. The recipient should be encouraged to provide their own estimate at all times. Where the recipient is unable to provide an estimate for the new financial year but provides an estimate for the current year, the FAO should index the amount and advise the recipient of the estimate upon which payment will be made following the usual notification rules. The recipient should be given the option to accept the FAO estimate or to provide their own estimate for the new financial year.
Policy reference: FA Guide 4.9.3 Outcomes of New Financial Year Assessments, 1.1.I.85 Indexed income - actual or estimate (FTB)
All FTB recipients, except single income support recipients and recipients who have already provided a new financial year estimate at the time of the assessment are contacted as part of the assessment process.
Explanation: Single income support recipients are not contacted for an estimate of income because they are not subject to the income test and therefore receive the maximum rates of FTB Part A and FTB Part B.
All CCB recipients are contacted as part of the assessment process, except for those who are:
CCB recipients who receive zero rate only because they have not provided an estimate will be contacted as part of the assessment process.
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Last reviewed: 2 January 2009
