Child Care Subsidy (CCS) overpayments arising from reconciliation 007-19022134

CCS reconciliation determines a customer’s correct CCS entitlement for the relevant income year (i.e. the year they received CCS payments). CCS reconciliation can commence from the 29th day after the end of the CCS year. Reconciliation will only occur for a customer once all the reconciliation requirements are met.

Customers cannot claim CCS as a lump sum.

CCS is paid directly to the child care provider on behalf of the customer in the form of reduced fees. The rate of CCS is based on an estimate of family income provided by the customer.

Each CCS customer (including partner and ex-partners relevant to the year being reconciled) must confirm their family income with Services Australia by 30 June of the year after the subsidy was paid. They can confirm their income either by:

• lodging their Income Tax Return/s (ITR) with the Australian Taxation Office (ATO), or
• advising the agency that they are Not Required To Lodge (NRTL) an ITR and, advise of their actual income

There is no bulk reconciliation process for CCS customers. All customers are required to meet the reconciliation requirements in order for reconciliation to occur.

At reconciliation, the customer's CCS entitlement for a relevant year is worked out by comparing:

• the amount of CCS a person received based on their estimate of their family's income, to
• the amount of CCS a person is actually entitled to, based on their family’s actual income and child care attendance for the relevant CCS year

ACCS qualification debts (that occurred throughout the 2018-19 financial year) will be included in the reconciliation result. However, ACCS periods are exempt from reconciliation i.e. income changes will not affect these periods

The result can be a top-up, overpayment or nil adjustment. If an overpayment is calculated, the amount is:

• raised as a debt in the Debt Application in Process Direct, and
• displays in the Debt Management and Information System (DMIS) on the OPDL screen

The customer is sent a reconciliation outcome letter advising the debt amount. They can also view their reconciliation outcome via Online Services or the Express Plus app. To view and/or take action on a CCS debt raised in Process Direct see CCS debts.

Note: CCS reconciliation will take into account additional changes (qualification changes) made throughout the year that impact customer eligibility (such as retrospective changes to the Activity Test). These changes will be included in the reconciliation outcome and could impact the final assessment.

If information used in a previous CCS reconciliation is corrected, updated or removed, the customer's CCS reconciliation will automatically be recalculated by comparing the previous result to the new information. This is called re-reconciliation. The result of a re-reconciliation can also be a:

• top-up,
• overpayment,
• or nil adjustment

There are some important differences between Family Tax Benefit (FTB) and CCS reconciliation debts.

• CCS and FTB debts will be raised separately, even if they occur at the same time
• CCS, CCB and CCR debts (if not paid in full) may be recovered from ongoing CCS fee reductions
• Only CCS and CCB/CCR debts can be recovered from CCS top-up payments
• If CCS reconciliation cannot occur by the 1^st deadline (30 June of the year following the CCS relevant year. For the 2018/19 year only, the 1st deadline was extended until 31 March 2021), because family income is not confirmed, an undetermined debt will be automatically calculated. The debt will be for the total amount of any CCS paid during the relevant income year (any periods of ACCS will not be included)
• Recovery of the debt will only commence once the 2nd deadline (30 June of the second year following the CCS relevant income year) has been reached. The undetermined debt at the 1^st deadline will not prevent the customer from applying for FTB or income support advances
• Both FTB and CCS debts can be recovered from tax refunds

See Reconciliation of CCS for more information about deadlines and the reconciliation process.