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This topic outlines how actual ATI (1.1.A.20) for the relevant income year (1.1.R.23) is assessed when an income tax return is lodged by the individual and/or their partner, and when income tax returns are not lodged.
Actual ATI is required to determine the individual's family assistance entitlement for the purpose of reconciliation.
Where possible, the components of ATI will be verified by the ATO and Centrelink when the individual and/or their partner (if applicable) lodges their income tax return. This includes individuals and/or their partners who have a valid reason for not lodging a tax return but do so for reasons such as to recoup amounts of tax withheld from their income throughout the year.
If an individual and/or their partner is required to lodge a tax return, they must do so for reconciliation to occur.
Each agency will verify specific components of ATI according to the table below.
|
Verification when an income tax return is lodged | ||
|
Component |
Verified by |
Information source |
|
Taxable income (including taxable pensions or benefits) |
ATO |
Income tax return |
|
Reportable fringe benefits |
ATO |
Income tax return |
|
Total net investment loss |
ATO |
Income tax return |
|
Non-taxable pensions or benefits |
Centrelink |
See Note |
|
Target foreign income
|
Centrelink
ATO |
Latest individual estimate |
|
Reportable superannuation contributions |
ATO |
Payment summary(provided by employer) |
|
Deductible child maintenance expenditure (DCME) |
Centrelink |
Latest individual estimate |
Note: The amount of non-taxable pension or benefit used will be the latest estimate provided by the individual or the amount of non-taxable pension or benefit paid to the individual or their partner by Centrelink, whichever is the higher. The amount of taxable pension or benefit paid by Centrelink is not compared to the ATO's assessment of taxable income due to an individual's capacity to reduce their assessable income by means such as offsetting business losses.
The manner in which adjusted fringe benefits, non-taxable pensions or benefits, target foreign income and DCME are verified is the same for all individuals.
However, in cases where the individual and/or their partner are not required to lodge an income tax return, the latest estimate of taxable income, adjusted fringe benefits, tax exempt foreign employment income, and total net investment loss provided by the individual are used in reconciliation.
Act reference: FAAct Schedule 3 clause 2 Adjusted taxable income
Policy reference: FA Guide 3.2 Adjusted Taxable Income, 6.4.3.10 Valid Reasons for Not Lodging a Tax Return
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Last reviewed: 13 May 2013
