Breaking down balancing

Families across the country are getting their balancing outcomes, with Services Australia in the thick of balancing family payments for 2019-20.

Starting first with Family Tax Benefit (FTB) in July, then Child Care Subsidy (CCS) in August, many families have a balancing outcome already, with more to get theirs in the coming months.

The coronavirus (COVID-19) pandemic has changed many aspects of our daily lives, including the yearly balancing process.

What is balancing and how does it work?

At the end of each financial year, Services Australia balances FTB and CCS payments to make sure families get the right amount for the year.

We take a few things into account when we work out balancing outcomes, including:

  • How much FTB and CCS families got during 2019-20 – We paid families through the financial year based on the income estimate they gave us.
  • Their actual income for 2019-20 – We get families’ actual income details after they lodge their tax returns or tell us they don’t need to.
  • How much CCS we withheld – We usually withhold 5% during the year so families have a buffer against a potential overpayment when we balance.
  • Families’ FTB payment choice – Families can choose to get their FTB fortnightly, at a zero rate or to claim it as a lump sum after the end of the financial year.
  • If families can get any supplements – Families may get the FTB Part A supplement (up to $766.50), FTB Part B supplement (up to $372.30) and the Single Income Family supplement (up to $300).
  • Families’ circumstances – We’ll take into account if families had a change of circumstances during the year when we balance.

What outcomes can families expect?

When we balance payments, there are three possible outcomes – top up, no change or an overpayment. Most families will get a top up or have no change.

  1. A top up – Families will get a top up if we haven’t paid them all the FTB or CCS they’re entitled to for the financial year. This includes amounts we’ve withheld and supplements families are eligible for.
  2. No change – Families will have no change if we’ve already paid them the right amount for the financial year.
  3. An overpayment – Families will have an overpayment if they’ve received too much for the financial year.

Sometimes families get a different outcome to what they were expecting. This may happen if families:

  • underestimated their income for the year,
  • didn’t update their income estimate during the year as their situation changed, for example they changed jobs, had an increase in hours or got a promotion,
  • had a change in their family circumstances, including where parents separated or became partnered, or if there were changes to care arrangements for children, or
  • lost eligibility for a period of the year, for example if their children did not meet immunisation requirements.

What’s different this year?

For FTB and CCS:

The Australian Government has paused a range of debt raising and recovery activities due to the coronavirus pandemic so Australians can meet their immediate needs at this difficult time.

If we start balancing a family’s payment during the pause and it looks like they’ve been paid too much, we won’t finalise balancing straightaway. We’ll wait until the pause has ended before we do this.

Usually when we balance payments, if families owe Centrelink money we’ll use FTB top ups, lump sum payments and supplements to repay the overpayment. We won’t be doing this during the pause, which means some families may get a top up this year when they otherwise wouldn’t have.

While we’ve paused the recovery of some Centrelink overpayments, money owed to the Australian Taxation Office may still be recovered from top ups and supplement payments.

For CCS only:

Between 6 April and 12 July 2020, families weren’t required to pay fees when they accessed child care. This meant we weren’t paying CCS during that time. When we balance CCS for 2019-20, we won’t include the free child care period.

Because CCS wasn’t paid or withheld during the free child care period, CCS top ups may be less this year than last year, even if there had been no other changes to families’ circumstances.

When will families find out their balancing outcome?

Families are already finding out their outcomes, with nearly 800,000 families having their FTB balanced so far.

When balancing is done, families will get a letter showing how much FTB and CCS they were paid, how much they were entitled to and the difference between the two figures.

If we think we’ve paid a family too much for the year, we won’t finalise balancing their payments straightaway. They can check their balancing status in their Express Plus Centrelink mobile app and see if their balancing is on hold or pending.

There’s nothing else they need to do right now, since no decision has been made about an overpayment yet. Once the pause has ended, we’ll finish balancing payments and write to them.

If families want their balancing finalised before the debt pause ends, they should call the Families line on 136 150. We can tell them their balancing outcome, how much their overpayment may be, organise repayment options, or keep any repayments on hold until the debt pause ends – it’s the family’s choice.

What will happen when the pause ends?

If families have been overpaid and need to repay money, we’ll write to them to explain why they owe the money, the amount they owe, when it’s due and how to repay it.

As with all decisions we make, anyone with an overpayment, has an opportunity to ask for an explanation and a review if they disagree with the decision. Families don’t need to do this until we give them their balancing outcome.

Families can keep up to date with the latest FTB and CCS news by going to servicesaustralia.gov.au/balancing, following Family Update on Facebook and subscribing to news for families.

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