Every year - usually in mid-August - Services Australia will balance a family's account.
It's a time where lots of things can happen, so let's look at:
What Is CCS Balancing?
What Happens When Accounts Are Balanced?
How This Affects Child Care Subsidy
What is CCS Balancing?
To understand balancing, we need to understand how CCS subsidies are administered.
When a family confirms their income (see confirming income), the Department uses this as an *estimate* of how much Child Care Subsidy they should get in the following financial year.
At the end of that financial year, once all CCS sessions have successfully been submitted, the Department will total up the subsidies delivered to families in that period.
When they do this, they'll also look at the confirmed family income from the previous financial year to see how much subsidy the should have received.
Once both of these have been calculated, there'll be a final balance - either owed to the family or the Department - hence the name, balancing.
What Happens When Accounts Are Balanced?
When the Department balances a family account, there'll be a final amount. Who this amount is owed to, and how much is owed, will determine what happens next.
Scenario 1: The CCS estimated and received matches exactly
In this unlikely instance, the balance is $0. So nothing will happen. The accounts are perfectly balanced.
Scenario 2: The Department has underpaid subsidies
If a family was entitled to more subsidies than they received, the Department will pay this to them directly.
Scenario 3: The family owes subsidies to the Department, less than the withholding amount
Each week, a family pays 'withholding' (see withholding) - usually 5% of subsidies each week.
Once the accounts are balanced, it may be the case that the family owes a small sum to the Department. The withholding amount will be used to pay this debt. Any monies left after paying this debt will be paid directly to the family.
Scenario 4: The family owes subsidies to the Department, more than the withholding amount.
In the case that the withholding amount does not cover the monies owed to the Department, the family will incur a debt.
Debt can be paid in two ways:
The family can pay the debt immediately
Debt will be taken from future subsidies
How Balancing Affects Future Child Care Subsidies
If the family incurs a debt which is paid from future subsidies, in the case of CCS, subsidies will be halved until the debt is paid off. This means that the family will have to pay a higher gap fee to the service.
HINT: if families come to your service saying that subsidies have changed drastically around August/September, be sure to check if the family has incurred a CCS debt.
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