AM with Sabra Lane – Child care subsidy debt

Monday, 04 November 2019

SABRA LANE: When the child care subsidy replaced two separate child care payments in 2018, it was touted as a change that would make things simpler for parents and leave most families better off. But for some families they say that hasn’t been there experience. They’ve told AM they’ve been waiting for months to have their payments reconciled, with some ending up with debts they say they shouldn’t have incurred. The ABC’s Australia Talks national survey has found cost is the biggest problem facing parents when it comes to sourcing child care. Political reporter Claudia Long reports.

CLAUDIA LONG: When Perth mum Jamie-Leigh Addison was about to leave work last month ahead of having her second child, she wasn’t expecting to hear from Centrelink.

JAMIE-LEIGH ADDISON: To find out I had a debt the week before I had my newborn, yeah it was a bit of a shock.

LONG: Jamie-Leigh was notified she owed a debt of $728 to Centrelink, apparently as a result of claiming too much child care subsidy. But, when she called to query the initial debt it was found to be too high.

ADDISON: I gave them a call and it got the debt down to around $330.

LONG: The child care subsidy works by calculating what percentage of a family’s child care is eligible to be subsidied, by looking at the hours you work and your family income. The government then pays the subsidy directly to child care providers. Parents need to report to Centrelink every time their income or work hours change, and then at the end of the financial year those figures and then balanced against the tax return. When Jamie-Leigh called to dispute her debt notice, she said she was told a system fault caused the initial problem and that her debt was now correct.

ADDISON: They just said it was a technical error and he said yeah it was incorrect and they had my activity hours down wrong.

LONG: The ABC understands a number of families have had issues updating their work hours in the system, and has been told by Centrelink staff that an IT glitch is responsible for the problem. The Education Department refused to confirm whether they were aware of or had received complaints about a glitch. A spokesperson for the Department told the ABC “the latest balancing data as of 4 October shows more than 574,000 families have had their balancing completed. Of the outcomes delivered to families, over 87 per cent resulted in top up payments or required no action. 13 per cent were advised of an overpayment of their child care subsidy entitlement”. Shadow Minister for Early Education Amanda Rishworth says she’s been contacted by families stressed about child care related debts, they say they shouldn’t owe. Ms Rishworth wants to see the government commit to looking into what could be causing the problem.

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: I have been raising my concerns with both the activity and the income test for some time, and we have had no response from the government.

LONG: Education Minister Dan Tehan says the Department is working as quickly as possible to rebalance subsidies.

DAN TEHAN, MINISTER FOR EDUCATION: As we learn the lessons from the implementation we continue to improve.

LONG: He also did not confirm whether anyone had reached out to his office regarding any technical errors, but he encouraged anyone having issues with the new system to get in touch with the Department of Human Services.

TEHAN: Obviously we had the most major reforms to our child care system in over 30 years, and what we’ve been doing is making sure we’re getting the balancing right.

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