Thousands of families stung with childcare subsidy debts

The federal government is chasing families over childcare subsidy debts while refusing to recoup $13bn in JobKeeper payments from profitable businesses.

Thousands of families have been stung with childcare subsidy debts, sparking claims of hypocrisy as the federal government lets profitable businesses keep JobKeeper payments.

The Herald Sun can reveal the government is trying to claw back $34.3m in childcare subsidies that were overpaid in 2019-20, as the complicated system again catches out unsuspecting mums and dads.

As of April 30, 8936 Victorian families owed a combined $13.9m — far more than those in any other state.

While debt collection is paused during lockdowns, Labor has seized on the new figures, criticising the government for chasing the debts while refusing to recoup $13bn in JobKeeper payments that went to businesses which recorded revenue increases during the pandemic.

Two childcare rebates were replaced by a single means-tested payment in 2018, with the Herald Sun later exposing how problems plagued the new system as mums and dads were wrongly ordered to pay debts and others were left in limbo waiting for refunds.

The government is trying to claw back $34.3m in childcare subsidies that were overpaid in 2019-20,

Parents are required to estimate their income in order to set a subsidy level, with changes in their working arrangements meaning some are paid more or less than they are supposed to receive.

As of April 30, NSW families owed a combined $8.5m and those in Queensland had received debt notices totalling $6.8m. The median debt facing impacted families was $685.

Services Australia general manager Hank Jongen said the “overwhelming majority of families” either received a refund or saw no change when their subsidies were reconciled.

But opposition early childhood education spokeswoman Amanda Rishworth lashed the “hypocrisy of the Morrison government”.

“They are more than happy to pursue working families for Child Care Subsidy debts, but won’t pursue profitable big businesses to return JobKeeper,” she said.

“Victorian families are already doing it tough dealing with the pandemic and soaring childcare fees. So why is the Morrison government chasing these families down for debts, while letting big business pocket taxpayers’ money they don’t deserve?”

Mr Jongen said Services Australia could only balance the subsidy payments to ensure “families are paid the right amount” once they completed their tax returns.

“Families have two years to do this, and we send them numerous reminders during this period to make them aware of their obligations to confirm their income,” he said.

“If they don’t confirm their income, we can’t balance their Child Care Subsidy and a debt may be raised.”

He said payments had now been reconciled for 94 per cent of the 1.4 million families who received the subsidy in 2019-20.