ATI Indexation Factor
The ATI indexation factor updates an older income when a current tax return is unavailable. It applies a wage growth adjustment so the system can estimate a parent’s current earning capacity.
Indexation and the use of provisional income form a routine part of the assessment process, especially early in each financial year when most parents are yet to lodge tax returns.
Definition
The ATI indexation factor is used to calculate a parent’s provisional income if there is no tax assessment for a parent for the last relevant year of income (but a tax return for a previous year of income). The ATI indexation factor is calculated to 3 decimal places.
The provisional income would be calculated by multiplying the parent’s ATI for a previous financial year by the ATI indexation factor.
How the ATI indexation factor is calculated:
- AWE amount for the December quarter of the last relevant year of income ÷ AWE amount for the December quarter of the tax return year.
The ATI indexation factor is calculated with reference to the trend all employees AWE figure for the December quarter (November reference period) published by the ABS and is used in the calculation of assessments where required from the following 1 July.
Definition source: Guides to Social Policy Law, Child Support Guide, Version 4.97, released 20 March 2026, 1.1.A.130 ATI indexation factor.
Role in the formula
The ATI indexation factor is used to set a parent’s provisional income when the latest year’s tax assessment is not available. This usually occurs at the start of a financial year and continues until the parent’s tax return is lodged and assessed.
The system takes the most recent confirmed income and updates it using wage growth. This updated figure is then used as the parent’s income in the child support formula.
This keeps assessments current without waiting for tax returns. It also ensures a parent cannot rely on an outdated income figure while delaying lodgement.
Once the tax return is lodged and assessed, the provisional income is replaced with the actual ATI. The assessment is then recalculated for the relevant period, which may result in arrears or an overpayment adjustment.
Example
A new child support period starts on 1 July. A parent’s most recent assessed income is $70,000 from the previous year, but their latest tax return has not yet been processed.
The ATI indexation factor is 1.035. The system calculates a provisional income of $72,450 and uses that figure in the assessment.
When the parent later lodges their tax return, the assessment is updated using the actual income. Any difference between the provisional and actual figures is corrected through arrears or a credit.