Families Face Payment Disruption
More than 240,000 Australian families receiving the Child Care Subsidy have been impacted by a recent administrative deadline. Those who failed to confirm their income for the 2023–24 financial year by 30 June saw their payments stopped. From 7 July, the Child Care Subsidy rate for affected families dropped to 0 per cent.
Services Australia Urges Immediate Action
Services Australia urged families to take swift action to resume their payments. “Confirm your income now if your Child Care Subsidy (CCS) has stopped,” the agency said. Families can confirm income by lodging a tax return or by declaring non-lodgement via myGov or the Express Plus Centrelink app. Partners who shared care responsibilities during the year must also confirm their income status.
Steps to Resume Payments
Services Australia will restart CCS payments once eligibility is confirmed. “Once you’ve confirmed your income, we’ll start your CCS again from the first day of the next CCS fortnight after you told us,” it said. Each CCS fortnight starts every second Monday. Services Australia stated it would not backpay families for the period between the payment stop and restart.
Income Confirmation Required for Balancing
Services Australia compares estimated incomes with actual figures at the end of each financial year, a process known as ‘balancing’. “This is called balancing and it’s how we check you got paid the right amount during the year,” said Services Australia General Manager Hank Jongen. Families usually have 12 months to confirm income before payments are impacted. For those receiving the subsidy in 2024–25, the deadline will fall on 30 June 2026.
Tax Refunds May Be Offset for Debts
Services Australia also issued a warning regarding tax refunds and existing Centrelink debts. If a recipient owes money, the agency may use their tax refund to recover the debt. “If you have a debt with us at tax time, we may use your tax refund to repay it,” Services Australia said. This action applies if the recipient is not actively repaying the debt or has no repayment plan in place.
Debt Recovery Applies to Former Customers Too
Debt recovery from tax refunds may affect individuals who no longer receive Centrelink payments. If they are not making repayments, Services Australia may deduct amounts owed directly from their ATO tax refund. The deduction will appear on the person’s ATO Notice of Assessment as a ‘Credit Offset to Centrelink’. Former customers will receive a letter if this occurs.
Child Support Debts Also Impact Refunds
Those with overdue Child Support debts may also see reductions in their refunds. Services Australia may use tax refunds to cover unpaid child support. Parents who may experience financial hardship are advised to contact the Child Support enquiry line before lodging their tax return.
Balancing Timeline for Different Payments
Services Australia starts balancing Family Tax Benefit payments in July and Child Care Subsidy payments in mid-August. Any overpayments or debts will be recovered before any top-up payments or lump sums are issued. The agency stated it avoids using tax refunds to recover debts if repayments are paused due to disaster events or pending reviews.
System Designed to Ensure Accurate Payments
The system checks that payments throughout the year match recipients’ true income. This helps prevent overpayments and ensures families receive the right amount of support. The agency confirmed that balancing is a standard procedure every financial year.
Communication from Services Australia
Services Australia confirmed that it notifies families before deadlines and actions are taken. The agency continues to urge recipients to remain up to date with income confirmation and repayment arrangements to avoid future disruptions.
Key Dates and Access
Families must confirm income via their myGov accounts or Centrelink’s Express Plus app. Those with non-lodgement declarations must select ‘More’ on the app, then choose ‘Advise tax non-lodgement’. The agency reminded all partners involved in family claims to also confirm their income.
Consequences of Inaction
Failure to meet administrative deadlines can result in the loss of essential subsidies. Families impacted by payment disruptions may not be reimbursed for gaps unless actions are taken swiftly. Services Australia continues to monitor claims and work with affected recipients to restore payments.
Support Channels Remain Open
Services Australia continues to provide assistance via its customer service platforms, including online help and telephone support. It remains essential for families to engage with the system to prevent disruption and ensure compliance with subsidy conditions.
