kids playing with puzzle, education concept
kids playing with puzzle, education concept

90,000 childcare families stung with debts — are you next?

MORE than 90,000 families have been stung with debts under the Morrison Government's new childcare subsidy scheme with projections that tens of thousands more could owe money.

An audit of nearly 600,000 families receiving the means-tested subsidy detected about 16 per cent owed money after estimates of their income and activity made at the start of the financial year were compared with their recently completed tax returns.

Why the Child Care Subsidy is failing parents

The debts are likely to eat into tax rebates that many workers just received and the Government has been hoping would be spent to stimulate the economy.

It is the first time the new childcare subsidy has been assessed since the scheme was streamlined in July last year.

An audit of 600,000 families receiving the childcare subsidy revealed 16 per cent owned money.
An audit of 600,000 families receiving the childcare subsidy revealed 16 per cent owned money.

Opposition education spokeswoman Amanda Rishworth said if the same rate of detections continued, about 150,000 families could be left with a debt once the nearly one million users completed their tax returns.

She said families receiving debt notices were under "unbelievable anxiety and distress" with the overpayments unfairly hitting workers with fluctuating income such as casuals.

"With the combination of the new confusing activity and income tests, the problematic IT system, and difficulty getting answers or explanations from Centrelink, families are scratching their heads as to why they have received large, unexpected debt notices," she said.

"The Government cannot bury its head in the sand over this issue."

An Education Department spokesman said it was the first time accounts had been balanced under the new system so authorities were approaching it with care to ensure "as little impact as possible on families".

"Of the outcomes delivered to families, 87 per cent resulted in top up payments or required no action and 13 per cent were advised of an overpayment of their child care subsidy entitlement," he said.

Debts of less than $50 have been written off.

He said 24 people had requested a formal internal review of their assessment.



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