This topic outlines how Centrelink will follow up on individuals and/or their partners, who are required to lodge an income tax return for the relevant income year (1.1.R.23). It discusses:
The non-lodger process prompts individuals who receive FTB and/or their partners who are required to lodge an income tax return do so before the end of the relevant lodgement period.
In March/April of the lodgement year (1.1.L.30) (the income year following the year of entitlement), individuals who receive FTB (and/or their partners) who have not lodged an income tax return or advised Centrelink they are not required to lodge are advised that:
Note: The extension of the lodgement period from 1 year to 2 years does not change the requirement for recipients to lodge their income tax returns within 12 months. It simply means that, if they lodge their tax returns up to 24 months from the end of the income year (1.1.I.75), they will receive a top-up, if eligible. By the end of the extended lodgement year, if an individual and/or their partner fail to lodge an income tax return, or do not inform Centrelink that they are not required to lodge, they will not be eligible to receive any top-up payments including the FTB supplements.
These individuals may be reminded by Centrelink again before the end of the lodgement year to either lodge their income tax return or contact Centrelink to advise they are not required to lodge.
If an individual who receives FTB and/or their partner fail to lodge an income tax return by the end of the lodgement year or fail to inform Centrelink that they and/or their partner are not required to lodge an income tax return, a debt will be raised against them. The debt may comprise all the FTB (including LFS and MBA) and CCB they received for the relevant income year. Other FA payments such as the baby bonus are not raised as a debt as there is no requirement to lodge an income tax return to receive these payments.
Note: A non-lodger decision is a variation of the individual's determination made by the Secretary that the individual is/was not entitled to FTB for the financial year for which they and/or their partner have not lodged a tax return.
Individuals who receive FTB (and their partners, if any) may not be able to receive FTB based on an estimate if they have outstanding non-lodger debts as a result of non-lodger decisions for FTB received in relation to previous income years because they have not lodged their requisite income tax returns or failed to inform Centrelink that they are not required to lodge.
Act reference: FA(Admin)Act section 28(2) Consequence of section applying, section 32AA Non-payment of family tax benefit for non-lodgement of tax returns, section 71A Debts arising in respect of FTB advances
The following categories of individuals who receive FTB are selected for the non-lodger process.
All individuals who received FTB by instalment, for the relevant income year, and
All individuals who received FTB for a past period, and
An individual will be excluded from selection if they:
Income for the purpose of determining whether an individual's and/or their partner's taxable income is above, equal to or below the tax-free income threshold is the higher of either their:
Note: Where there are no details on the individual's record of their (and/or their partner's) taxable income, it is assumed that their income is above the tax-free income threshold.
Policy reference: FA Guide 188.8.131.52 Outcomes of Non-lodger Process
An individual can have their entitlement reconciled at any time from July of the lodgement year if adequate income information is available to do so.
Policy reference: FA Guide 184.108.40.206 Verification of Adjusted Taxable Income
Last reviewed: 13 May 2013