Income estimation
- Why do I need to estimate my income?
- What will happen if my income estimate is too high?
- What will happen if my income estimate is too low?
- Where do I go for more information?
Why do I need to estimate my income?
If you choose to get Family Tax Benefit as fortnightly payments and/or Child Care Benefit as reduced fees, we need you to estimate how much income you will earn for the whole income (financial) year. We will then use your family income estimate to work out how much family assistance you should be paid during the year.
From 1 July 2009 when you notify an increase in your income estimate during the year your Family Tax Benefit rate will be adjusted automatically to ensure you do not have an overpayment on reconciliation at the end of the financial year (mandatory continuous adjustment). This automatic adjustment does not apply to Child Care Benefit. However, you can reduce the chance of overpayment by telling the Family Assistance Office to adjust your Child Care Benefit to account for an increase in your income.
After the end of the income (financial) year, and once you have lodged your tax returns, we will compare the amount you should have received, based on your actual income with the amount you actually did receive based on your estimated income. This process is called Reconciliation.
Please Note: You and your partner must either lodge a tax return or tell the Family Assistance Office that you are not required to lodge a tax return (the Australian Taxation Office can tell you whether you are required to lodge a tax return). If you do not do either of these things, any Family Tax Benefit you have received will become a debt and will have to be repaid.
What will happen if my income estimate is too high?
You may get a top up payment after the end of the income (financial) year for the family assistance you did not receive throughout the year. You may also reduce your risk of being overpaid.
If you are entitled to other benefits such as Rent Assistance or a Health Care Card, you can still get these entitlements but you should discuss your options with the Family Assistance Office on 13 6150*.
For more information on how you can get paid, see What payment options do I have?
What will happen if my income estimate is too low?
If your family income estimate is too low, you could be at risk of being overpaid. An overpayment may occur because you have received more family assistance than you were entitled to receive and you would be required to pay it back.
If you incur an overpayment, some of your FTB payment may be withheld each fortnight until all your debt has been repaid. Also, any top-ups such as FTB supplements and income tax returns (for you and your partner, if you had one and they consent) may also be used to pay off outstanding debts.
To ensure your income estimate is accurate, please ensure you take into account all the adjusted taxable income components for you and your partner, if you have one.
Your adjusted taxable income includes your:
- taxable income
- adjusted fringe benefits (reportable fringe benefits * 0.535)
- tax-free pensions or benefits
- target foreign income
- reportable super contributions
- total net investment losses
less
- deductible child maintenance expenditure.
The Family Assistance Office uses the grossed up amount, rather than the net value, of reportable fringe benefits in assessing your eligibility for family assistance. In addition, certain foreign employment income that is exempt from tax but currently included for child support purposes will also be included as income for family assistance purposes.
You may also incur an overpayment if you fail to notify the Family Assistance Office of a change in your circumstances. Changes in your personal circumstances may affect the amount of FTB you are entitled to receive and it is therefore very important that you notify the Family Assistance Office of such changes as soon as they occur.
Some of the changes that could affect your entitlement include:
- increased income for you and/or your partner (from promotion, overtime, etc)
- if you have a new partner;
- if you have shared cared arrangements (you may have to take maintenance action);
- child(ren) no longer in your care;
- children turning 16 and no longer in study;
- children earning income above the threshold ($13,010 for children aged 5-15 and no longer in study and all children aged 16-24).
Where do I go for more information?
If you have difficulty estimating your income, the Family Assistance Office can assist you if you contact them on 13 61 50 or attend your local Family Assistance Office located in Medicare offices and Centrelink Customer Service Centres.
*Calls to 13 numbers cost 25 cents from anywhere within Australia. Calls to 1800 numbers are free of charge. Calls from public pay phones or mobile phones will be charged at a higher rate.
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