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This topic provides a summary of the outcomes that may result from the reconciliation of FA. The outcome of reconciliation may be a:
This topic also covers:
When a recipient's entitlement to FTB or CCB is the same as the amount they received for the relevant income year (1.1.R.23), there is a nil adjustment. This means the recipient has received their exact entitlement.
When a recipient's entitlement to FTB or CCB for the relevant income year is more than the amount they received for the relevant income year, there is a positive adjustment. This means the recipient will receive the difference between what they should have been paid and what they actually received for the relevant income year. A top-up may result if the recipient's estimated ATI is higher than their actual ATI, as assessed by the ATO. A top-up may also result if the recipient chooses a More Choice for Families payment option that allows them to receive part of their entitlement during the income year and the rest of their entitlements after their payments have been reconciled.
Note: RA will be included in a recipient's FTB top-up if:
Example: Amanda is a member of a couple and receives FTB Part A by instalment for her 2 year old daughter. Amanda pays private rent of $270.00 a week. As she receives more than the base rate of FTB Part A, Amanda receives some RA as part of her fortnightly instalments. At the end of the income year, it is determined that her actual family income makes Amanda eligible for the maximum rate of FTB Part A including the maximum rate of RA. Amanda receives a top-up.
For CCB and CCR, if reconciliation, or the review of the reconciliation outcome, is initiated through the provision of an updated Attendance Record Report after the end of the lodgement year, it may result in a top-up.
When a recipient's entitlement to FTB or CCB is less than the amount they received for the relevant income year, there is an overpayment (negative adjustment). This means the difference between what they actually received and what they should have been paid for the relevant income year will be raised as an overpayment. The recipient's income tax returns, as well as the income tax returns of another consenting adult, may also be used to recover any balance of the overpayment. An overpayment may result if the recipient's estimated ATI is lower than their actual ATI, as assessed by the ATO. Other methods of recovery, including withholdings and garnishee, may also be used.
A recipient's FA can be reconciled again if:
A recipient's CCB and CCR will also be re-reconciled if a child care service submits an updated Attendance Record Report substituting new attendance information for that already provided. Processing of this information will result in an automatic re-reconciliation. This differs from a review initiated by a recipient as it will usually occur without the recipient's prior knowledge.
Where reconciliation, is initiated through the provision of actual ATI or maintenance income after the end of the second lodgement year it can only result in a nil or negative adjustment. This may occur where the recipient and/or their partner lodge an income tax return after the second lodgement year.
Note: A non-lodger debt will be raised after the end of the first lodgement year if the recipient and/or their partner fail to lodge a tax return or inform the FAO they are not required to lodge an income tax return. If an income tax return is not lodged by the recipient and/or their partner do not inform the FAO that they are not required to lodge a tax return before the end of the second lodgement year, no top-ups or FTB supplements are payable.
Policy reference: FA Guide 6.4.1 Overview of Reconciliation, 6.4.1.30 Reconciliation Process, 6.4.2.10 Verification of Adjusted Taxable Income, 6.1 FAO Review & Appeal Process, 6.4.3.20 Non-lodger Process, 6.4.4.20 Reconciliation - Ex-Partners
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Last reviewed: 2 July 2012
