7.2.10 Debt Recovery of CCS/ACCS by Offsetting - Prior to Reconciliation

Summary

This section contains information relating to debt (1.1.D.60) recovery by setting-off against future CCS or ACCS payments. This type of debt recovery will occur prior to reconciliation (1.1.R.10).

Debt incurred by approved provider

An approved provider (1.1.A.90) may incur a debt if a child care provider:

  • substitutes a session of care report (1.1.S.35) with an updated report and the amount of CCS or ACCS initially paid was more than what should have been paid, or
  • cancels a session of care report and an amount of CCS or ACCS had initially been paid to the provider for that report.

A debt incurred by the actions of an approved child care service (1.1.A.90) is owed by the approved provider that operates that service. The debt amount will firstly be automatically offset against the future payments made to that service that undertook the action that led to the debt being incurred, up to 50% of future payments. If the payments to that service are insufficient to recover the debt owed in a reasonable period, payments to other services operated by that approved provider may be offset, up to 50%, to recover the debt.

Example: An approved provider operates 3 services (A, B and C). Service A submits a session report and is paid an amount of CCS. Service A then substitutes that report with another and the amount of CCS initially paid was more than what should have been paid. The debt amount (the difference between what was paid and what should have been paid) will be automatically offset against future payments made to service A, up to 50%. If the payments to service A are insufficient to recover the debt owed in a reasonable period, payments made to services B or C may be offset, up to 50%, to recover the debt.

Act reference: FA(Admin)Act section 71C Debts in respect of CCS/ACCS - overpayments, section 82 Methods of recovery, 87A Setting off debts of an approved provider against child care service payments

Debt incurred by individual

An individual (1.1.I.90) may incur a debt if:

  • they report a change in circumstances that might affect their eligibility or entitlement (1.1.E.30) to CCS or ACCS, or
  • the ATI (1.1.A.20) has been underestimated for income year, or
  • they (and their partner (1.1.P.30)) fail to meet reconciliation conditions set out in FA(Admin)Act section 103A.

Some smaller debts raised during the year will not have any recovery action taken until reconciliation. However, should the individual wish to repay or enter into an arrangement to repay earlier, they may do so. Larger debts will generate a notice to be sent to the individual in order to enter into an arrangement to repay the debt. An individual has 28 days to respond to this notice. Failure to do so may result in automatic recovery of the debt via offsetting from future CCS payments, and or interest being applied.

Act reference: FA(Admin)Act section 71C Debts in respect of CCS or ACCS - overpayment, section 82 Methods of recovery, section 103A CCS reconciliation conditions

Last reviewed: 2 July 2018