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This section discusses the requirement for FTB recipients to lodge an income tax return. It also outlines the processes that the FAO may undertake if recipients and/or their partners fail to lodge an income tax return.
Generally, a recipient of FTB and/or their partner, is required to lodge an income tax return or inform the FAO if it is determined that they are not required to lodge, within 12 months following the income year (1.1.I.75).
Where a recipient and/or their partner lodges an income tax return or informs the FAO they are not required to lodge, the recipient's payments for the income year are reconciled.
Policy reference: FA Guide 6.4.1 Overview of Reconciliation
If a recipient and/or their partner fail to lodge an income tax return or inform the FAO 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.
Note: Other FA payments, such as the baby bonus and MIA, 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 recipient by the FAO. 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 the FAO has not been informed that the recipient and/or their partner are 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
Recipients and/or their partners who fail to lodge an income tax return or inform the FAO 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 a recipient 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 recipient 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 Payment of FTB Based on an Estimate
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Last reviewed: 1 July 2010
