Changes, overpayments, debts and appeals

FTB is balanced after the end of each financial year, and balancing is where most FTB debts are born. A debt does not necessarily mean anyone did anything wrong: it usually means something changed during the year and the fortnightly payments, which ran on an estimate and on earlier facts, no longer match the final position. Understanding what to report, and when, is therefore the best debt prevention available.

What to report, promptly

Report: changes in family income or in the income estimate; a partner starting or stopping work; changes in care arrangements or care percentages; a child starting or leaving full-time secondary study; a child turning 13 or 18 where Part B is concerned; changes in residence or absence from Australia; immunisation updates and health checks; and changes in child support assessments or collection arrangements. Families receiving fortnightly instalments should also remember the annual obligation: the recipient and their partner must lodge an income tax return, or notify Services Australia of their income, within 12 months after the end of the financial year, or repay amounts received. Circumstances preventing a claim or a tax return being lodged should be raised on the Families line rather than left unmentioned.

How balancing creates a debt

At balancing, Services Australia compares the fortnightly amounts paid against the entitlement worked out on actual income and final circumstances. The supplements are worked out at the same time, and a supplement may be used to offset an overpayment, so a family expecting a supplement can receive less cash than expected even without a formal debt notice. Where the overpayment exceeds the supplements, the remainder is a debt. Common causes, in plain terms, are: income higher than estimated; care lower than claimed; a child leaving study; an immunisation or health-check reduction not applied during the year; and a maintenance test change. None of these requires dishonesty; all of them require reporting.

Recovery and hardship

Debts are normally recovered from future payments, by arrangement, or by other recovery action where no arrangement is made. Families in financial hardship should contact Services Australia promptly: repayment arrangements, and in some circumstances a lower recovery rate, depend on the family's situation being known, and an arrangement made early is easier than one made after recovery action has started. An FTB advance, where one has been taken, is also repaid from later payments, which can make a household's cash flow tighter in the months after the advance.

Appeals: the review path

If Services Australia makes a decision you disagree with — eligibility, a rate, a care percentage, a maintenance test outcome, or a debt — you can ask for a review. The first step is to contact Services Australia and ask for an explanation and a formal review of the decision, with any evidence that supports your position: payslips, care records, school enrolment evidence, immunisation records, or child support correspondence. Keep copies of everything submitted, note the date of each contact, and do not ignore a debt notice while a review is pending: ask explicitly what happens to recovery while the review is under way. If the internal review does not resolve the matter, further review by the Administrative Review Tribunal is available for most social security decisions, within its time limits. Time limits matter at every stage, so a review should be sought promptly, not after the next balancing cycle.