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This section discusses the requirement for individuals who receive FTB to lodge an income tax return, or to advise Centrelink if they (and/or their partner) is not required to lodge. It also outlines the processes that Centrelink may undertake if the individuals (and/or their partners) fail to lodge an income tax return.
Generally, an individual of FTB (and/or their partner), is required to lodge an income tax return or inform Centrelink if it is determined that they are not required to lodge, within 12 months following the income year in which they received a payment (1.1.I.75).
Where an individual (and/or their partner) lodges an income tax return or informs Centrelink they are not required to lodge, the individual's payments for the income year are reconciled.
Policy reference: FA Guide 6.4.1 Overview of Reconciliation
An individual who receives FTB (and/or their partner) is required to notify Centrelink they are not required to lodge an income tax return, if they are not required to do so, within 12 months from the end of the relevant income year (1.1.I.75).
Where an individual (and/or their partner) informs Centrelink they are not required to lodge, the individual must provide a declaration of their ATI for the relevant income year in order for their payments to be reconciled.
If a individual (and/or their partner) fails to lodge an income tax return or fails to inform Centrelink that they (and/or their partner) are not required to lodge an income tax return by the end of the lodgement year (1.1.L.30), a non-lodger debt will be raised. The debt may comprise any FTB they received in the year for which they have not lodged an income tax return or advised they are not required to lodge.
Note: Other FA payments, such as the baby bonus, are not raised as a debt as they have no tax lodgement requirements.
A non-lodger decision may be made at any time following the end of the first lodgement year but is generally made in November of the extended lodgement year. A variation of entitlement is issued to the individual by Centrelink. A grace period is provided for a period of 75 days beginning on the day of the variation of an FTB recipient's entitlement for a relevant income year. The grace period may be a longer period if the Secretary determines that there are special circumstances to vary the length of the grace period. FTB payments based on income estimates may continue to be paid during the grace period but would cease if there are still outstanding income tax returns, or Centrelink has not been informed that the individual (and/or their partner) is not required to lodge, and there are still outstanding non-lodger debts by the end of this period.
Policy reference: FA Guide 6.4.3.40 Non-payment of FTB Based on an Estimate
Individuals (and/or their partners) who fail to lodge an income tax return or inform Centrelink they are not required to lodge within 12 months following the income year, have an additional 12 months to do so in order to receive any top-up payments including the FTB Part A and FTB Part B supplements.
Where an individual lodges in the extended lodgement year, they will still receive any additional FTB entitlement (including FTB supplements), for the relevant income year, if their actual family income is less than the estimated income on which their FTB payments were based. However, if income tax returns are lodged after the extended lodgement year (1.1.E.70), the individual will lose any entitlement to FTB top-ups, including the FTB supplements that they would have received if they lodged within the 2-year period.
This section contains the following topics:
6.4.3.10 Valid Reasons for Not Lodging a Tax Return
6.4.3.30 Outcomes of Non-lodger Process
6.4.3.40 Non-payment of FTB Based on an Estimate
6.4.3.50 Deferral of Non-payment of FTB Based on an Estimate
6.4.3.60 Removal of Non-payment of FTB Based on an Estimate
6.4.3.70 Non-entitlement to FTB Based on an Estimate Due to 3 or More Non-lodger Decisions
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Last reviewed: 13 May 2013
