4.6.4.10 Adjusted Rate of CCB

Summary

This topic explains the choice individuals have to receive an adjusted rate (1.1.A.45) or an elected rate of CCB to reduce or recover a potential overpayment.

Adjusted rate

Individuals who tell Centrelink about an increase in their income have the option of asking to have their rate reduced for the remainder of the year to reduce or recover any overpayment of CCB the individual may have already incurred during the current income year. This rate is called the adjusted rate. The adjusted rate must be lower than the individual's legislative rate (1.1.L.25) based on their income estimate. Individuals may receive an adjusted rate by exercising their common law right to receive less (1.1.C.47) than their legislative rate.

The adjusted rate may result in a CCB% that is lower than the minimum CCB%.

Example: A family advises Centrelink of an increase in their income estimate. Their new CCB% is 20.42%. The family chooses to adjust their CCB% by 12% to reduce or recover any potential overpayment. Their adjusted rate is 8.42%.

Elected rate

Individuals who have incurred an overpayment but do not want to accept the adjustment that was automatically calculated can elect their own reduction that is less than the legislative rate. This may be more affordable for families that cannot afford the adjusted rate but will still help to reduce the possible overpayment.

Who benefits from this measure?

This measure assists families who were unable to accurately estimate their income at the start of the financial year and who increase their income estimate during the financial year.

Choice

Individuals are offered this choice when they advise of an increase in their income estimate. The officer must discuss the individual's potential overpayment, a recommended adjusted rate and the continued affordability of child care to allow the individual to make an informed choice.

It is the individual's decision whether to receive the legislative rate, the suggested adjusted rate or an elected rate. Individuals who choose to receive the legislative rate or an elected rate that is in between the legislative and suggested adjusted rate must be warned that they may have a greater chance of incurring an overpayment after the end of the financial year. This is because the individual is not having their rate reduced by the full-suggested adjustment to recover the overpayment. Any overpayment will be dealt with after the end of the year as a part of the reconciliation process when actual income is known.

Regardless of whether the individual chooses to be paid the legislative rate, an adjusted rate, or an elected rate, their full entitlement will be calculated at reconciliation after the end of the financial year when their actual ATI is known.

The individual's rate will stop being adjusted and return to the legislative rate at the start of the new income year because at that point, the individual has not incurred an overpayment for the new income year.

Revocation of choice

Individuals can revoke their adjusted rate at any time. Individuals will receive their legislative rate based on their income estimate from the date of request. Individuals must be advised that the date of effect of revocation is the date of notification. Arrears of their legislative rate cannot be paid until their correct entitlement is calculated at reconciliation.

Policy reference: FA Guide 1.1.C.47 Common law right to receive less, 1.1.L.25 Legislative rate of FTB/CCB, 1.1.A.45 Adjusted rate of FTB/CCB

Last reviewed: 20 September 2016