A Current Affair – Child Care Subsidy Debt

Thursday, 07 November 2019

TRACY GRIMSHAW: It was hailed as the great child care overhaul, with the promise of making life easier for families. But more than a year on and the Morrison Government’s subsidy scheme is under the microscope. Tonight angry parents stung with debts they never expected.

RUBY, MUM: I was more confused than anything else because I thought why is it happening to me I’ve done nothing wrong.

KYLIE, MUM: I was in shock. I haven’t changed anything, all the information was still correct but now I owe money.

CHRIS ALLEN: It’s the first time the government has assessed the new child care subsidy scheme since it was introduced 15 months ago. The government audited 600,000 families and found 16 per cent of them had underestimated their income. That now means the government is demanding those families pay cash back. In the case of young Jack’s family that was about $200, but in the case of many families the government is demanding thousands of dollars.

RUBY, MUM: So I was more concerned and very angry that I’d done the right thing and they’d done this to us.

ALLEN: Adelaide mum Ruby was told she had to pay back more than $6,000. A big ask considering she thought they’d overestimated their income.

RUBY: We’ve always overestimated to be able to receive a little bit of money back from the government at the end of it to protect ourselves.

KYLIE: I’ve always overestimated so I’ve got money back. This year since they’ve changed the system we actually owe just over $1,000.

ALLEN: Melbourne mum Kylie says the new system has been a disaster for her.

KYLIE: Ever since they’ve rolled it out we’ve actually been worse off. We were paying less with the old system than we are currently with the new one.

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: Far from a soft touch, or a light touch, the government has been overzealous in recuperating debt.

ALLEN: Amanda Rishworth is Opposition Education spokesperson (sic).

RISHWORTH: You’ve got families on one hand that have been accused of owing a debt that don’t have a debt, and other families who feel they’ve done the right thing but whatever’s happened they still have a debt.

ALLEN: It seems confusing income tests and a battle to get answers from Centrelink has left families scratching their heads.

RUBY: I was surprised with the tone that I was getting, that they were less than helpful to say that I didn’t owe the debt and they weren’t really interested in actually finding out whether the debt was mine at all.

KYLIE: I have called after I received the email saying they were going to take additional funds off me, and they told me that it had been escalated and someone would contact me and I’ve heard nothing.

ALLEN: In fact Kylie says she was told to start a payment plan straight away.

KYLIE: They told me I still have to pay it while waiting for them to contact me.

RISHWORTH: Families are telling us that they are going to struggle to find this money, because of course the payments have gone directly to the child care centres so these families haven’t got this extra money in their pockets.

RUBY: They wouldn’t even really assist me in an investigation initially because they were too concerned with how to set up a payment plan to get their money back.

ALLEN: But Ruby didn’t back down, it took two months and not only did she win she proved the government owed her money.

RUBY: I pushed to have the investigation done and the truth came out in the end and we ended up $500 richer at the end of it when they owed us money back, which is what we initially estimated for.

SIMON BIRMINGHAM, THEN MINISTER FOR EDUCATION: These reforms are going to make life much simpler and much fairer for many hard-working Australian families.

ALLEN: When Education Minister Simon Birmingham announced the new system last year, the Opposition’s Amanda Rishworth said it was too complicated.

RISHWORTH: I was concerned that it would be overly complex and difficult for families to navigate.

ALLEN: Dozens of emails to A Current Affair are now saying the same thing. “I was stung with $1,508 in debt which they then took from my tax rebate automatically to pay it” says one mum. While this dad tells us “Sadly we are one of those statistics and are required to pay back $3,812.73 after we submitted our tax returns”. Then there’s this mum who says she was told she owes almost $1,800 “I instantly rang Centrelink, they put me on hold for 40 minutes while they tried to figure out why I had the debt as it didn’t say it just stated that I as paid too much subsidy”.

RUBY: And I spent weeks actually trying to figure out a way to possible get more work on my end and/or more work on my husband’s end so we would be able to afford this extra cost, that wasn’t even ours to begin with.

ALLEN: While Ruby beat them, Kylie has been left wondering whether she’d just be better off not working at all.

KYLIE: It’s a nightmare, they encourage you to go back to work after you have children and you try to do the right thing for your family and they say this is going to be for the working family, but you know it’s put us in more financial strain.

GRIMSHAW: In a statement the Department of Human Services told us if you disagree with an assessment contact them, and they’ll work with you to resolve the issue. Let us know how you go.

More News

Tuesday, 05 November 2019
Families around the country are being told they owe a Centrelink debt that might not be theirs
Monday, 04 November 2019
ABC National News – Child care subsidy debt
Monday, 04 November 2019
AM with Sabra Lane – Child care subsidy debt