This topic explains the reconciliation process when an FTB or regular care child dies.
If the only FTB child/ren of a recipient dies either during the relevant income year (1.1.R.23), or in the first lodgement year (1.1.L.30) before reconciliation has occurred, any FTB or CCB debt arising from the reconciliation process in respect of the period (including the bereavement period) for which the recipient was eligible for FTB or CCB, may be waived.
If an FTB or regular care child dies, the death may be considered special circumstances on a case by case basis. If the death is considered to be special circumstances, a debt may be waived under section 101 of the A New Tax System (Family Assistance) Act 1999. The debt may be waived under special circumstances only if the recipient has not made a false statement or representation, or has not failed or omitted to comply with a provision of the family assistance law. In general, providing an income estimate for a financial year that is less than the actual ATI for that year should not be treated as such a breach.
Example: When Ms Nyoni's FTB for the last financial year was reconciled in September, an FTB debt resulted because she had underestimated her ATI (1.1.A.20) for that income year. As her only FTB child died in August of the current financial year, (i.e., in the first lodgement year), recovery of her debts may be waived under special circumstances due to the death of her child in the income year. If reconciliation of Ms Nyoni's FTB for the current financial year also resulted in a debt being raised, recovery of this debt also would be waived under special circumstances (due to the death of her child in the income year).
Act reference: FAAct section 31 Continued eligibility for FTB if an FTB or regular care child dies, section 32 Eligibility for a single amount of FTB if an FTB or regular care child dies
FA(Admin)Act section 71 Debts arising in respect of family assistance, section 101 Waiver in special circumstances
Where a child who is not the only FTB or regular care child has died during the income year or the lodgement year, automatic reconciliation occurs. Debts of FTB and CCB may be recovered and arrears are issued as appropriate.
Policy reference: FA Guide 6.4.1 Overview of Reconciliation
Last reviewed: 30 April 2012