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Overpayments and debts

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 third-party software or the Provider Entry Point and in their payment advice.

Where the debt is large a debt notice will be issued to the provider of a child care service, or to an individual.

Child care debts are due to the Commonwealth.

How could a provider incur a debt?

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 of Human Services within the required timeframe
  • a provider reports care that did not occur
  • an individual is overpaid Child Care Subsidy or Additional Child Care Subsidy due to a false or misleading statement of the provider or due to the provider's non-compliance with the 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.

How will a provider know if it has incurred a debt?

A provider will be notified of any debts incurred by receipt of a letter and/or notification through their third-party software or the Provider Entry Point.

How does a provider repay a debt?

Debts may be recovered by setting-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 and Training
  • 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.

What happens if a service closes with an outstanding 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.

Review of decisions relating to debt

A provider can request an internal review of the decision relating to a debt. If a provider is not satisfied with the outcome of an internal review, it is entitled to appeal to the Administrative Appeals Tribunal.