A person incurs an FA debt if they are paid an amount of FA:
Act reference: FA(Admin)Act Part 4 Division 2 Amounts recoverable under this Act, section 71(1) No entitlement to amount, section 71(2) Overpayment
An overpayment of FA is a debt due to the Commonwealth if it is a debt under the:
Act reference: FAAct Part 3 Eligibility for family assistance
FA(Admin)Act section 70 Debts due to the Commonwealth
There are 4 main types of FA debts:
FA overpayments may be identified in the several ways including:
Example 1: The person advises of a change of circumstances several weeks after the event occurred.
Example 2: Data-matching with other agencies such as DIAC.
Generally, an overpayment arises when a recipient has been paid:
FA overpayments can be raised when there are changes in eligibility or changes in circumstances.
An overpayment due to eligibility that does not require verification of income details to accurately raise the overpayment is raised immediately and is not left until the reconciliation process.
Where available information suggests that changes in a recipient's circumstance is likely to result in an overpayment, the overpayment should be raised immediately.
If an overpayment of FA has been identified, and it is a debt due to the Commonwealth, the amount of the debt is normally recovered. For discussion on the various methods of debt recovery, refer to 7.2 Methods of Debt Recovery.
There are limited circumstances where recovery action for a debt is not taken, and the debt may be written off or waived. These are discussed in 7.3 Non-Recoverable Debts.
The FAO is responsible for identifying, raising and recovering FA debts. This includes offsetting FA top-ups against FA debts.
The ATO will offset an available tax credit (of the recipient and/or any consenting person) against any FTB debt to the extent of the available tax credit. The FAO is responsible for recovering any remaining FTB debt after any tax credit has been applied to the debt.
All recipients who are subject to a prohibition on being paid FTB based on an estimate will continue to be subject to any existing debt recovery action for their FA debts (that may include a non-lodger debt), with the exception of mandatory withholding, which will cease for as long as the prohibition is in place.
Example: Melissa is currently having $25 withheld from her fortnightly FTB instalment payments to repay a FA debt. Melissa becomes subject to a non-lodger decision resulting in a non-lodger debt and becomes subject to non-payment of FTB based on an estimate. Melissa's fortnightly instalment payments and her withholdings will cease, and new arrangements will need to be made to repay her FA debts.
Act reference: FA(Admin)Act section 84 Deductions from debtor's family tax benefit, section 32AA Non-payment of family tax benefit for non-lodgement of tax returns, section 32AB Prohibited periods for claimant
Policy reference: FA Guide 22.214.171.124 Non-payment of FTB Based on an Estimate
When a debt is owed by an individual to the Commonwealth and part or all of the amount is attributable to a false or misleading statement made by an approved child care service, the individual does not owe the debt. Similarly, when a debt is attributable to a false and misleading statement by an individual the debt is not owed by the service. However, if this impacts on the amount of CCR entitlement and the amount paid is greater than the entitlement, the difference will be treated as a debt to the Commonwealth attributable to the individual.
Act reference: FA(Admin)Act section 71F Debts arising under more than one provision, section 71CAA Debts arising in respect of CCR where no entitlement or rebate paid to wrong account, section 71B Debts where no entitlement or where enrolment advance wrongly paid, section 71C Debts arising in respect of CCB where overpayment, section 71D Debt arising in respect of CCB where false or misleading statement by individual - debt owed by individual, section 71E Debt arising in respect of CCB when false or misleading statement etc. by service - debt owed by service
Penalty interest may be added to a debt. This can occur when the debtor is not receiving instalments of FTB and:
Act reference: FA(Admin)Act section 77 Notices in respect of debt, section 78 Interest on debt
Last reviewed: 1 July 2010