Centrelink bills Sydney families thousands over childcare subsidy during Covid lockdown

Sydney parents have been “shocked” and “devastated” to receive bills of up to $11,000, with just weeks to pay back the debt.

Rebecca Coulson was “shocked” when she was sent two bills just weeks apart from Centrelink demanding she pay back more than $11,000 in childcare subsidies.

The mum-of-one received a bill for $7665 for the financial period 2018/19, which is due on September 22, with the letter stating that a review of her circumstances had uncovered that she had been paid too much in childcare subsidies.

Another bill arrived less than two weeks later, this time for the 2019/20 financial year for an amount of $3743, which needed to be paid by September 24.

Back then the 42-year-old’s daughter was attending childcare three days and was looked after a nanny twice a week while she worked as a sales director, but things have since dramatically changed.

“I was made redundant in June last year, so my financial circumstances have also changed compared to what they were three years ago, so to receive these invoices is quite a slap in the face,” she told news.com.au. “That’s two months to pay a large amount of money.”

Since being made redundant, Ms Coulson has been picking up contract work where possible but is averaging around 10 hours a week as she looks after her child before and after school, while her husband continues his job as a sales manager.

“We have lost pretty much one full income, which was my salary, and then we have been hit with these bills and I don’t know if another one is coming through,” she said.

”I don’t just have a bank account to find $11,000 in eight weeks. I’m home schooling and there was already financial pressure and that’s one more pressure we don’t need right now.”

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Hundreds of mums on the northern beaches have been slugged with huge bills for overpayment of childcare subsidies. Picture: Getty Images

The bills could also mean a huge blow to a personal dream, she revealed.

“I’ve been going through IVF and that’s the last potential cycle we could go through. So that’s another kick in the guts knowing if we have to pay that bill we miss out on going through another round of IVF,” she said.

The northern beaches mum said they have always used an accountant to do their tax affairs so found the bills “unusual”.

When she initially received the invoices, she said she “put her head in the sand” as she didn’t have the mental capacity to deal with it while enduring Sydney’s tough lockdown.

Then she was just going to pay up before discovering she’s not the only one impacted.

A Facebook post on a northern beaches mums group on the weekend blew up, attracting hundreds of comments from worried parents who had also been slugged with bills dating years back.

Mum-of-two Nadine Kliskey put up the original Facebook post after she received an invoice from Centrelink for $2500 for the 2018/19 tax year and $1200 for the 2019/20 financial year for overpayment of childcare subsidies, with both due in September.

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Nadine Kliskey with her two kids raised the childcare subsidy bills on a Facebook group and the post blew up. Picture: Supplied

Back then, she was sending both her kids to childcare during that period for four days a week.

She recently spoke to Centrelink, who told her they held back the 2018/19 bills due to the pandemic.

“One question I have is that we are still dealing with coronavirus and we are arguably in a worse lockdown now in Sydney, so why send a double whammy now?” she said.

“Another question I have is whether it’s accurate? There was a system issue producing inaccurate invoices a few years ago. Looking at the other mums in the groups it’s a tough time at the moment and other parents are receiving bills for $16,000 to $17,000 for a system we already pay much more money than any other country does for childcare – it just seems unfair.

“It makes me nervous about my next tax return. I’ve just gone in and increased my income by quite a bit, and I got a message back that my rebate hasn’t changed yet they are telling me it is wrong the past two tax years and I have to pay back money. Once you start to chat to a few people on that Facebook group, it’s good for a start to see you’re not the only one, but also raises more questions about is this correct?”

The virtual assistant said since Sydney went into lockdown over a month ago she has been financially hit – losing 30 hours a week of work – while her electrician husband was also off work for two weeks as stricter restrictions were imposed.

“I have to claim money for the disaster payment so Centrelink are giving me money in one hand and pulling it back with another with these childcare subsidy bills,” she added.

The 41-year-old is waiting for a call back from a Centrelink “subject matter expert” in the next two weeks but said she is ready to “fight”.

“I’m not paying until someone can tell me this is accurate ... and I’m going to have to go on a payment plan to pay it back as I’m claiming disaster payment for loss of work, so can’t chuck out $3500,” she said.

Apart from the lockdown, many of the mums are dealing with homeschooling their kids. Picture: iStock

Julia* has been hit by a whopping three bills for repayment dating back to the 2017/18 financial year, totalling over $5500.

Like Nadine, she recently claimed the disaster payment after being stood down from her job as a chief commercial officer two days as week.

Yet just two days after her disaster claim she received her first bill from Centrelink, which left her “shaking”.

On July 20, she was slugged with a bill for the 2018/19 year for $2195 and then a week later another arrived for $2256 for the 2019/20 financial year, with both due for payment in September.

But it didn’t stop there and when she received another message just the next day that there was an email waiting in her MyGov account, she said “the blood drained from her”.

This third blow left her “devastated” with a bill for $1120 for the 2017/18 period, with the requirement she cough up the money in just one month.

“I could not believe it and I thought it was because I had lodged something for a disaster payment and I had put myself on the radar and then I happened to be on the northern beaches mums Facebook group and there’s more than a hundred comments on it.,” she said.

“I think its so unfair. I lodge my tax return every single year. I pay an exorbitant amount of tax every year and then to receive this it’s terrible for me and my family, especially at this time.

“I lost two days a week work, which is significant for my family as we require every single dollar that comes into the household and it’s particularly sh***y as well as the childcare subsidy – the one from last year – we kept our children home during that lockdown and didn’t send our children to daycare.”

While the bills don’t specify which child the subsidy relates to, Julia said her two children went to daycare three days a week between 2018 and 2020 and only two days for the 2017/18 period, with her daughter starting at nine months old and her son at six months.

“I just think its absolutely crazy. My husband runs his own business and I’m the manager of a large organisation and to be hit with an invoice for three years ago, which is basically like ‘I’m sorry you forget to pay this or we accidentally didn’t charge you and you have to pay now’ – it wouldn’t stand up in the business world. It's not right,” she said.

Many parents kept their kids home from childcare during Sydney’s first lockdown in 2020. Picture: iStock

The 35-year-old said she needs to reach out to Centrelink but hasn’t had the time as she is homeschooling and isn’t looking forward to spending “four hours on the phone waiting to try and talk to someone”.

She added she had always filed her tax returns with an accountant each year.

“We are all using our savings at the moment to survive and pay our mortgage and electricity and all that kind of stuff and not to be paying childcare subsidy payments from years ago,” she added.

Services Australia general manager Hank Jongen said they know many people are still doing it tough and the organisation is sensitive to the challenging circumstances people face, including those impacted by the current lockdowns.

“After the end of the financial year we balance family payments, including child care subsidy, to make sure we’ve paid families the right amount. This process occurs when families lodge their tax return or otherwise confirm their income,” he said.

“Families have two years to confirm their income. This is why some of these overpayments date back a number of years. If they have not done this within two years, a debt may be raised.

“When we balance payments there are three possible outcomes — top-up, no change or an overpayment. The overwhelming majority of families have a top-up or no change when their balancing is complete.”

Families have two years after each financial year ends to confirm income for that financial year or they will be sent an account payable notice, he added.

“We have recently reached two years since the 2018-19 financial year ended and have sent letters to families who still haven’t confirmed their income,” he explained.

“Even though the deadline has passed, it’s not too late for families to take action and for us to reassess their debt.”

Last year, Service Australia paused a range of debt raising and recovery activity nationally.

“We restarted debt activity late last year because we understand that telling people if they’ve been overpaid helps give them certainty about their situation and allows them to plan for the future,” he said.

He added people with a Centrelink debt who are experiencing financial hardship can contact Services Australia on 1800 076 072 to arrange flexible repayments suited to their situation.

Department of Human Services general manager Hank Jongen, said it’s not too late for families to take action and for us to reassess their debt. Picture: Supplied

One mum commented in the Facebook group that her friend had checked her Child Care Subsidy letter against the Australian Taxation Office notice of assessment (NOA).

“The income figure doesn’t match what our taxable income is on the NOAs,” she wrote. “The CCS letter implies we made more than what we were assessed.”

Another mum commented that her income for the childcare subsidy was $60,000 above what she declared in her tax return.

While one shared that she had received a bill for $2600 for the 2019/20 financial year, but it was likely right due to her husband owing money on share grants and their tax agent holding off submitting until May.

“What is totally not ok in my opinion is sending someone a bill for FY18 or FY19 when those people submitted their tax returns on time! Especially a bill that doesn’t give much time before payment is due and with barely any breakdown of how they came to that calculation,” she commented.

Meanwhile Ms Kliskey, whose youngest still has another 18 months to go in childcare, described the childcare rebate system as “flawed” and complicated to navigate.

“We do pay an extortionate amount for childcare compared to what other countries pay,” she said.

“It means you are having to hold out for children to go to school to pay for certain things as we are paying $15,000 to $20,000 in childcare and we could do a lot with that.”

*Not her real name

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