Childcare subsidy debt frustrates parents who say data was wiped from Centrelink accounts

When Lucy Ford got a letter from Centrelink telling her she'd been overpaid for her childcare subsidy, she couldn't believe it.

Key points:

  • The Federal Government has launched a three-year review of its childcare subsidy policy
  • The Education Department refused to say how many people had reported that their data was wiped
  • More than 90,000 families have been hit with a debt after their accounts were balanced


She went back to check her working and childcare hours logged with Centrelink, searching for the overpayment.

But the information she'd entered throughout the year had disappeared.

"I was a little bit shocked at the debt because we had overestimated our income by $12,000 and I'd updated our activity hours," she said.

"So I thought I should check what was on my record and found that all my activity hours had been deleted.

"There was just none on there for the last financial year."

Under the scheme, parents must report to Centrelink every time their income or work hours change.

Those figures are then balanced at the end of the financial year against a tax return, to determine if the family has received the correct subsidy payment.

The Fords are one of more than 90,000 families who've been stung with a debt after their accounts were balanced from the first-financial year of the Childcare Subsidy.

The Education Department refused to say how many people had reported that their data had been wiped.

However, the ABC understands the Department has been made aware of the glitch multiple times.

'It was a system glitch'

"I am appealing the debt but it's background stress knowing that I'm going to have to call and stay on the phone for hours and that it's not going to be a straightforward process sorting it out," Ms Ford said.

"If we hadn't overestimated our income we would have owed thousands of dollars, and that's a huge blow for any family."

Shadow Minister for Early Education Amanda Rishworth said she had been contacted by parents with concerns on how the debts had been calculated.

"And on ringing up Centrelink they've found that it was a system glitch that wiped their data and in fact they've didn't even owe a debt," she said.

"I'm worried for all those families who haven't had the time and energy to chase it, and have received this letter and thought, 'well Centrelink must be right', and they've paid that debt."

Call centres inundated with request for help

The ABC's Australia Talks National Survey found the cost is the biggest problem facing parents when it comes to sourcing childcare.

Seventy-five per cent of parents with young children rated cost as a problem for them personally.

A spokesperson for the Department of Education said most families had received a top up payment after the balancing process was completed.

"This is the first balancing period for the new childcare subsidy payment, which replaced two separate payments that operated differently and had different requirements," they said.


"Because of this, the Department of Human Services, which is responsible for the reconciliation process, has been approaching the balancing process with care to manage it with as little impact as possible on families.

"The latest balancing data as at 4 October, shows that more than 574,000 families have had their balancing completed.

"Of the outcomes delivered to families, 87 per cent resulted in top up payments or required no action."

But the Department wouldn't answer questions on system problems.

John Cherry from Australia's largest childcare provider, Goodstart Early Learning, said their call centres had been inundated with requests for help from parents.

"Overall our families are better off with the changes to the childcare subsidy, but the subsidy, the way it's been designed, particularly the Centrelink processes, have not met the objective of being simpler than the system it replaced," he said.

"And the complexity, the multiple paying points in terms of getting approval, that does drive a lot of families up the wall."

The Federal Government has launched a three-year review of childcare subsidy policy.

Parents rated cost as the biggest barrier to sourcing childcare in the Australia Talks National Survey.


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