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Centrelink chases Aussie families over $35.3 million in debts

·4-min read
Image of woman receiving debt letter, Centrelink logo
The Government is chasing Aussie families over child care subsidy debts. (Source: Getty)

The Morrison Government is chasing more than 48,000 Australian families to pay back millions in debt in a move that has been blasted as “hypocritical” and “astounding”.

Figures from Services Australia reveal hundreds of families in every state are being pursued over Child Care Subsidy debts from the 2019-20 financial year amounting to $35,331,140.

In Victoria alone, more than 8,900 parents owe a combined $13.9 million.

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On 1 July 2018, two rebates – the Child Care Benefit and the child Care Rebate were replaced by the Child Care Subsidy.

The Subsidy is calculated by taking into account three elements, one of which is your family’s combined income. If income increases or decreases, you’ll need to report that to Centrelink, and it’ll affect how much of the subsidy you’re entitled to.

But now, the Government is attempting to claw back millions that it says was overpaid to parents.

More than 6,000 mums in NSW owe a combined $8.46 million, while nearly 6,300 parents from Queensland owe $6.8 million.

Chart of childcare subsidy debts owed from the 2018-19 financial year
Childcare subsidy debts owed from the 2019-20 financial year. (Source: Services Australia/Labor)

The data from Services Australia was released by Labor, criticising the Morrison Government for the clawbacks while refusing to recover the $13 billion in overpaid JobKeeper payments.

“This is a government that is more than happy to pursue working families for debts while paying $13 billion to companies that didn’t need it but refuse to lift a finger about it,” said Shadow Minister for early childhood education Amanda Rishworth.

“Families across Australia are already doing it tough dealing with the pandemic and soaring child care fees.”

Rishworth called on the Morrison Government to justify why it was chasing families for debt payments “while letting big business pocket taxpayers' money they didn’t need”.

Services Australia: 'We send them numerous reminders'

Services Australia general manager Hank Jongen told Yahoo Finance that the Child Care Subsidy was "balanced" at the end of each financial year.

"We can only balance Child Care Subsidy when families lodge their tax return or otherwise confirm their income. Families have two years to do this, and we send them numerous reminders during this period to make them aware of their obligations to confirm their income," Jongen said.

"If they don’t confirm their income, we can’t balance their Child Care Subsidy and a debt may be raised."

The "overwhelming majority of families" either get a top-up or have no change at all after subsidies are balanced, he said.

Services Australia will work with families experiencing financial hardship to "come up with a solution" including flexible repayment options, he continued.

Jongen urged families to update Centrelink if their income changes.

"We know at times families may not understand why they were overpaid or they may disagree with a decision. In these situations we encourage people to contact us. We can explain why they were overpaid, consider any new information and start a formal review of the decision if they ask us to."

MELBOURNE, AUSTRALIA - OCTOBER 09:  The Centrelink logo is seen outside of a Centrelink office on October 9, 2014 in Melbourne, Australia.  Economists expect the Australian jobs figure for September to show an unemployment rate of 6.2%.  (Photo by Scott Barbour/Getty Images)
"If [families] don’t confirm their income, we can’t balance their Child Care Subsidy and a debt may be raised," said Services Australia general manager Hank Jongen. (Photo by Scott Barbour/Getty Images)

Aussies no stranger to Centrelink debt notices

It’s not the first time that Aussie parents have been hit with these debt notices. Media reports from early August reveal that thousands of families were unexpectedly hit with similar notices for debts from the 2017-2018 financial year – with only weeks to pay it back.

"Ever since they rolled [the new scheme] out, we have been worse off," an Adelaide mother told Nine.

Mother-of-two Nadine Kliskey from Sydney’s Northern Beaches also told Nine: "Not only do we spend an extortionate amount on childcare, more than any other country, but this system that the government has put in place to supposedly help us and get mums back into the workforce, has got little loopholes where they can throw out random bills to us.”

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