Publication date: 09 Aug 01 |
Source: THE TAX INSTITUTE
According to the President of the Taxation Institute of Australia, Ms Alice McCleary, the problems have been highlighted by the failure of the Family Assistance Office to provide a statement of earnings to Australian taxpayers receiving benefits.
'The Family Assistance Office is unable to provide a statement of earnings to taxpayers in receipt of benefits. Their computer systems simply do not have the ability to make that information available. As a result, tax agents must rely on the information provided by their client to determine if they are in receipt of FTB payments and if they are, whether they are claiming the correct amount.'
This puts a huge burden on tax agents who are placed in a situation where they may have to assume their client is in receipt of FTB payments based on the details they have been provided. If their client is in receipt of payments, it is now the responsibility of the practitioner to delve into the personal lives of their clients to determine how much FTB they are receiving, and whether they are entitled to that amount.
Agents not only need to ask tax questions, but are also required to ask the following style of intimate questions to determine eligibility –
Did you and your partner separate between 1 July 2000 and the 30 June 2001?
If so, what was the date you and your partner separated?
Have you and your partner reunited?
If so, what was the date you and your partner reunited?
If you and your partner have reunited, is your partner living in the family home?
If not, how many nights per week does your partner stay over?
If you and your partner did not reunite, did you enter into another relationship?
If yes, what date did that relationship commence?
Does your new partner live in the family home?
If not, how many nights per week does that person stay over?
Are you currently still together?
How much maintenance does the father pay towards the children?
Do the children stay away from the family home with the father?
How many nights per week do the children stay away from home?
'As a result, we are left with a system that simply does not work and as a consequence, accountants are not only required to gain entry into taxpayer's books, but it is also necessary for them to gain access into their bedroom in order to do the Family Assistance Office’s job as well,' said Ms McCleary.
In 70% of cases where a tax practitioner has been asked to request Family Tax Benefits, the taxpayer has already, unknowingly received payment.
'For that reason, duplicate requests are received for a second rate process that is causing havoc for Australian tax agents. These tax agents end up with horrendous workloads because statements of earnings are not available from the Family Assistance Office. The solutions offered by the Family Assistance Office still require additional work by tax agents and their clients and the information sought can take up to 2 days to be provided.
'In addition, FTB entitlements are not determined until the end of the year. This will result in taxpayers in future years having to repay excess benefits if the Government does not continue to waive that obligation, as they did this year.
'To add further fuel to the fire, further workloads are being imposed on tax agents because the Australian Tax Office and the Family Assistance Office share the administration of the system'.
Given the burden on taxpayers and their agents, the Taxation Institute of Australia believes administration should be vested purely in the Family Assistance Office and any over payments dealt with through Social Security.