The Child Care Subsidy (CCS) balancing process (also known as reconciliation) for each financial year and the below information includes how this process works in detail.
What Is 'Child Care Subsidy Balancing'?
Balancing, also referred to as 'income review' or 'reconciliation', is the process that occurs after the end of each financial year where Centrelink compares families' income estimates with their actual adjusted taxable income to ensure families receive their correct Child Care Subsidy (CCS) entitlement.
This Centrelink video explains how they balance CCS.
Balancing is not new and the process for CCS will be similar to previous years for most families who have previously used subsidised child care.
For some families, however, this may be the first time they will be part of the balancing process.
Centrelink has information explaining the balancing process for families.
When Will CCS Balancing Happen?
The Child Care Subsidy (CCS) balancing process (also known as reconciliation) for the 2018-19 financial year is underway. Centrelink can only reconcile a family's CCS payments after they lodge their tax return, or tell Centrelink they do not need to lodge a tax return.
What do families need to do?
Families will need to take action so Centrelink can balance their CCS. They will need to either:
- lodge a tax return(s), or
- tell Centrelink that they are not required to lodge a tax return.
More information for families is available on the Centrelink website.
What Are The Possible Outcomes Of Balancing For Families?
Once Centrelink has compared a family's income estimate with their actual adjusted taxable income, Centrelink will advise them of their balancing outcome in a letter, or if the family receives letters electronically, the letter will be sent to their myGov inbox.
When Centrelink balances a family's payments, there are three possible outcomes that will be outlined in the letter. This is a normal part of the balancing process.
- For some families, there won't be any further action for them, if they received the correct amount of CCS during the year.
- Some families may not have been paid enough CCS during the year. If this happens, they'll be paid any outstanding amounts directly when Centrelink balances their payments. Centrelink call this a 'top up' payment.
- Other families may have been paid too much CCS during the year. If this happens, families may owe money, which they have to pay back to Centrelink. Centrelink may recover overpayments of CCS from future CCS, Family Tax Benefit (FTB) payments (including arrears), FTB top-ups, and supplements as well as tax refunds. This also includes clawback or retrieving Childcare Subsidy Payments from your childcare provider.
It is important that families talk to Centrelink if they have questions about paying back an overpayment. Centrelink can work with families to set up a repayment plan. CCS payments will not be used to recover debts for other payments, such as FTB or Parenting Payment.
Session Reports For The Previous Financial Year.
At the end of each financial year, the Child Care Subsidy System is closed for the previous financial year. This means providers are now not able to submit new session reports, or vary or withdraw existing session reports, for any period in the previous financial year.
What Changes May Providers & Services Experience As A Result Of Balancing?
Similar to previous years, balancing child care fee assistance payments occurs between families and Centrelink.
Providers and services may notice a change to the amount of CCS received on behalf of a family after Centrelink completes the balancing process. For example, if a family owes Centrelink money after balancing has occurred, the family may choose to reduce their future CCS payments to repay monies owed. This is called an offset.
The amount of CCS providers and services receive on behalf of families may also change throughout the year for a number of reasons. Examples include a family:
- notifying a change in their circumstances, such as a change in income, level of recognized activity or a change in relationship status
- choosing to change the percentage of withholding.
Did You Know You Can Change The Withholding Amount?
Centrelink withholds 5% of a family's entitlement to CCS throughout the financial year. If a family has been paid too much CCS, the amount withheld during the year will reduce the amount they owe at the end of a financial year.
Families can choose to change their withholding percentage online up to twice a year. For more information on withholding please see our factsheet.