6.4.1.10 Recipients Affected by Reconciliation

Summary

This topic identifies FA recipients who are affected by reconciliation.

FA recipients who receive FA on the basis of ATI, maintenance income and/or child care usage may be subject to reconciliation. ATI, maintenance income and/or child care usage may be relevant for FTB by instalment, CCB by fee reduction, FTB or CCB for a past period.

FTB recipients to whom reconciliation does not apply

Certain FTB recipients are not subject to reconciliation of ATI - either because all the relevant actual ATI is known when their FTB claim is determined or because their FTB entitlement is not subject to the income test. These include:

• single individuals in receipt of income support for the entire period during the relevant income year that they received payment,
  • Explanation: A recipient's entitlement to FTB is not subject to an income test during the period when they and/or their partner receive income support. For periods during which the recipient and/or their partner does not receive income support, the income test is applicable. Recipients who are single receive FTB Part B free of any income test.
• single recipients claiming for a past period in the previous income year,
  • Explanation: A past period claim for a previous income year can be determined only when the recipient's actual ATI for that year is known.
• partnered recipients claiming for a past period in the previous income year where their partner's actual ATI is available at the time the claim is made.
  • Explanation: If a partner's ATI is not available, a past period (lump sum) claim may be determined using the recipient's actual income and the partner's estimated income. If the actual income details for the partner become available the recipient's FTB entitlement will be reassessed.
  • Example: Mary lodges an FTB claim on 1 August 2008 for the period 1 July 2007 to 30 June 2008 following lodgement of her tax return. Her partner Bill lodged his tax return in July 2008. Mary is paid FTB on the basis of her and her partner's combined actual 2007-08 ATI of $54,000. There is no reconciliation of ATI.

Act reference: FAAct Schedule 1 clause 28B Where Part B rate is nil, Schedule 1 clause 38L Application of income test to pension and benefit recipients and their partners

FA(Admin)Act section 32C Relevant reconciliation time-member of a couple, income tax return lodged within 2 years

CCB recipients not reconciled

Certain CCB recipients will not have their entitlement for the relevant income year reconciled based on actual income. They are:

• individuals in receipt of income support, or who have a partner in receipt of income support, for the entire period during the relevant income year that they received payment,
• individuals who elected to receive zero rate only of CCB throughout the relevant income year, and
• individuals who were not TFN compliant for the entire period during the relevant income year that they received payment.
  • Explanation: Individuals who do not provide or authorise the use of their TFN for CCB purposes only receive zero rate.

CCB recipients who elected to receive zero rate during the year and any entitlement after the end of the financial year will not have their entitlement reconciled.

CCR recipients

From 2006-07 and 2007-08, individuals who have received CCB for approved child care services will have their CCTR entitlement determined after the CCB reconciliation has taken place. Their CCTR entitlement will be paid directly into their nominated bank account.

From July 2008, individuals who have received CCB as reduced fees for approved child care will have their CCR entitlement determined as a quarterly payment when usage/attendance information is received from child care services. Determination of an individual's CCR annual entitlement can only take place after the CCB reconciliation and a determination of entitlement to CCB or no entitlement has been made. Individuals who have received CCB for approved child care as a lump sum will have their CCR entitlement determined after the CCB reconciliation has taken place. Their CCR entitlement will be paid directly into their nominated bank account.

Act reference: FA(Admin)Act section 58 Variation where failure to provide tax file number, section 14 Restriction on determining claim where income tax assessment not made

Policy reference: FA Guide 4.6.4 More Choice for Families - CCB, 4.6.4.20 No CCB as Reduced Fees - Any CCB Entitlement at End of Year, 4.6.4.30 Rounding Down CCB%, 6.4.1.20 Payments Included in Reconciliation, 6.4.1.30 Reconciliation Process, 6.4.2.10 Verification of Adjusted Taxable Income, 6.4.2.30 FTB Reconciliation Due to Maintenance Income, 6.4.2.50 CCB Reconciliation & Child Care Usage/Attendance Information

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Last reviewed: 16 July 2009