What is 'Balancing'?
Balancing, also referred to as 'income review' or 'reconciliation', is the process that occurs after the end of each financial year where Centrelink compares families' income estimates with their actual adjusted taxable income to ensure families receive their correct Child Care Subsidy (CCS) entitlement.
This Centrelink video explains how they balance CCS.
Balancing is not new and the process for CCS will be similar to previous years for most families who have previously used subsidised child care.
For some families, however, this may be the first time they will be part of the balancing process.
Centrelink has information explaining the balancing process for families.
When will CCS balancing happen?
The Child Care Subsidy (CCS) balancing process (also known as reconciliation) for the 2018-19 financial year is underway. Centrelink can only reconcile a family's CCS payments after they lodge their tax return, or tell Centrelink they do not need to lodge a tax return.
What do families need to do?
Families will need to take action so Centrelink can balance their CCS. They will need to either:
- lodge a tax return(s), or
- tell Centrelink that they are not required to lodge a tax return.
More information for families is available on the Centrelink website.
What are the possible outcomes of balancing for a family?
Once Centrelink has compared a family's income estimate with their actual adjusted taxable income, Centrelink will advise them of their balancing outcome in a letter, or if the family receives letters electronically, the letter will be sent to their myGov inbox.
When Centrelink balances a family's payments, there are three possible outcomes that will be outlined in the letter. This is a normal part of the balancing process.
- For some families, there won't be any further action for them, if they received the correct amount of CCS during the year.
- Some families may not have been paid enough CCS during the year. If this happens, they'll be paid any outstanding amounts directly when Centrelink balances their payments. Centrelink call this a 'top up' payment.
- Other families may have been paid too much CCS during the year. If this happens, families may owe money, which they have to pay back to Centrelink. Centrelink may recover overpayments of CCS from future CCS, Family Tax Benefit (FTB) payments (including arrears), FTB top ups and supplements as well as tax refunds.
It is important that families talk to Centrelink if they have questions about paying back an overpayment. Centrelink can work with families to set up a repayment plan. CCS payments will not be used to recover debts for other payments, such as FTB or Parenting Payment.
If providers and services receive questions from families, there is more information on the Centrelink website to help families understand the balancing process.
Session reports for the 2018-19 financial year.
On 29 July 2019, the Child Care Subsidy System closed for the 2018–19 financial year. This means providers are now not able to submit new session reports, or vary or withdraw existing session reports, for any period between 2 July 2018 and 30 June 2019.
In limited specified circumstances where a provider needs to submit, vary or withdraw session reports from the previous financial year, the provider will need to apply to the Department of Education.
A Fact Sheet on the process is available.
What changes may providers and services experience as a result of balancing?
Similar to previous years, balancing child care fee assistance payments occurs between families and Centrelink.
Providers and services may notice a change to the amount of CCS received on behalf of a family after Centrelink completes the balancing process. For example, if a family owes Centrelink money after balancing has occurred, the family may choose to reduce their future CCS payments to repay monies owed. This is called an offset.
The amount of CCS providers and services receive on behalf of families may also change throughout the year for a number of reasons. Examples include a family:
- notifying a change in their circumstances, such as a change in income, level of recognised activity or a change in relationship status
- choosing to change the percentage of withholding.
Did you know families can change their withholding amount?
Centrelink withholds 5% of a family's entitlement to CCS throughout the financial year. If a family has been paid too much CCS, the amount withheld during the year will reduce the amount they owe at the end of a financial year.
Families can choose to change their withholding percentage online up to twice a year. For more information on withholding please see our factsheet.
Information from the webcast about balancing
The Department of Education and Centrelink held two webcasts for providers and services to explain CCS balancing on 15 July and 16 July. The webcasts were designed to assist providers and services to help families understand this process. They also covered what providers and services need to do to enable CCS balancing to occur.
- Understanding CCS balancing webcast video: This session was held on Tuesday, 16 July 2019.
- PowerPoint presentation slides from the Understanding CCS Balancing webcast.
Do you have more questions?
Looking for further Resources?
The Department of Education and Centrelink have developed resources providers and services can share with families who attend their service to help them understand the process.
While these resources are there to help families, providers and services are not expected to answer questions families have about balancing their payments. Families who need more information to understand the balancing process should be directed to the Centrelink website.
|Information sheet – Confirming income||distribute this article to families who attend your service|
|Self-print poster – Confirming income for Child Care Subsidy 2018–19||display this poster at your service.|
|Information sheet – Balancing is underway||distribute this article to families who attend your service.|
distribute this article to families who attend your service.
display this poster at your service.
share this video with families who attend your service.
share this image with families who attend your service.