How can a provider incur a debt?
A child care debt is typically any amount of child care assistance paid that is greater than the entitlement for a session of care. Debts can be offset automatically against payments made through the Child Care Subsidy System, and providers will be able to see any debts and offsets through their child care software or the PEP and in their payment advice.
Circumstances when a provider might incur a debt include when:
- a provider fails to pass on Child Care Subsidy payments to the individual and does not remit them back to the Department within the required timeframe
- a provider reports care that did not occur
- an individual is overpaid Child Care Subsidy due to a false or misleading statement of the provider or due to the provider’s noncompliance with Family Assistance Law
- a provider’s approval or approved service is cancelled or suspended after it received payments during any period following the suspension or cancellation.
Information for families
Where a parent is unsure about the details of a debt raised by Centrelink, they will need to log into their Centrelink online account for further details or raise their questions with Centrelink.
Providers should encourage families to keep their income and activity estimates updated with Centrelink to help them reduce the risk of debt throughout the year and at reconciliation.
How will a provider know if they have incurred a debt?
A provider will be notified of any debts incurred by receipt of a letter and/or notification through their child care software or the PEP.
How does a provider repay a debt?
Debts may be recovered by setting the debt off against future payments made to a provider.
Debts may also be recovered by one or more of the following means if necessary:
- payment of the debt in full
- payment via instalments by arrangement with the Department of Education
- legal proceedings
- garnishee notice.
What will happen if a provider does not repay a debt?
If a provider is issued with a debt notice and either fails to comply with its requirements or terminates a repayment arrangement, interest may be charged on any outstanding debt.
Interest may be charged from 28 days after the debt notice is issued.
If the debt is not repaid within a specified timeframe, legal proceedings may be taken to recover the debt.
If a provider closes during the debt recovery process then a debt notice will be issued for any outstanding debt amount, which will still be pursued.
Can a decision be reviewed?
A provider can request an internal review of the decision relating to a debt. Further information regarding review rights will be included in the debt notice issued to the provider by the Department of Education, Skills and Employment.