7.5 JETCCFA Debts

Introduction

This chapter discusses the circumstances in which JETCCFA recipients or approved child care services may incur a debt.

Raising of overpayments

JETCCFA overpayments can be raised when:

• a person provides false and misleading information about their eligibility for JETCCFA or about the payments they have received.
• an approved child care service provides false and misleading information about the amount of JETCCFA they have paid to a person or received in arrears.
• a person receiving JETCCFA fails to notify the FAO of an event or circumstance that may affect their eligibility for JETCCFA.
  • Example: A person fails to notify the FAO that they are no longer eligible for an income support payment. If the FAO establishes at a later point that the recipient's income support has been cancelled, the amount of JETCCFA provided to the person in the period from the date the person's income support is cancelled to the date the FAO learns of the cancellation will be an overpayment.
• a voluntary JETCCFA recipient fails to comply with the terms of their JETCCFA EPP.
  • Example: The person fails to undertake an activity in their EPP, JETCCFA is cancelled from the date at which the person ceased to comply.

The person may incur a JETCCFA debt for the amount of JETCCFA paid during the period of non-compliance with their JETCCFA EPP.

Debt recovery

If an overpayment of JETCCFA has been identified, the amount may be recovered.

There are limited circumstances where recovery action for a debt is not taken, and the debt may be written off or waived.

JETCCFA debts attributable to false or misleading statements

When a debt is owed by a person and part or all of the amount is attributable to false or misleading statement made by an approved child care service, the person does not owe the debt. Similarly, when a debt is attributable to false or misleading statement by a person the debt is not owed by the service.

Interest on debts

Penalty interest may be added to a debt. This can occur when the debtor:

• does not enter into an agreement to repay the debt, or
• has entered into an agreement to repay the debt, but fails to make a payment within the specified timeframe in the agreement.

The rate of penalty interest is the rate specified in the FA legislation, currently this rate is 3 per cent.

Act reference: A New Tax System (Family Assistance)(Administration) (Penalty Interest) Determination 2001

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Last reviewed: 3 May 2010