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Family Tax Benefit recipients to wait months for Centrelink payments

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UPDATED: Some Family Tax Benefit recipients won’t receive their lump sum or be able to dispute debts until at least February 2021 – seven months after they lodged payment claims with Centrelink – due to a staged lifting of a debt freeze imposed due to the pandemic.

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The Family Tax Benefit (FTB) is a two-part payment intended to help parents and carers who provide at least 35 per cent of a child’s care with the cost of child rearing.

Eligible recipients receive a fortnightly payment and a once-off lump sum at the end of each financial year based on the declared taxable income and caring responsibilities of each parent or carer.

The maximum 2019-20 payment was $766.50 for each eligible child.

Earlier this year, InDaily reported eligible low-income earners had received messages from Centrelink advising their annual FTB had been frozen due to a potential debt.

Bec Bishop was among the low-income earners who didn’t receive the lump FTB when she lodged it in July.

She told InDaily, Centrelink had raised a debt because the agency claimed her taxable income was lower than her estimated FTB income.

She said she still hadn’t received her lump payment three months after she first contacted Centrelink about the matter, due to the debt freeze.

In April, the government agency paused the debt raising and recovery activity for six months due to the coronavirus. The agency said it was intended to allow people to meet their immediate financial needs.

The freeze was due to be lifted on September 30 but was extended by a month.

Minister for Government Services Stuart Robert yesterday announced the temporary nationwide pause would be lifted in two stages, except in areas which remained in a state of disaster including Victoria.

In a statement, he said debt raising activity would begin on November 2 while debt recovery would start again in February 2021.

“Delaying debt recovery until February 2021 recognises the difficulties many people are still facing,” Robert said.

“It will provide time for people to consider their circumstances, engage with Services Australia about their options in a transparent way and plan for their future.

“This could include adjusting the information they are reporting to Services Australia.

“As debt activity starts again, Services Australia will work with people to make the process as clear and simple as possible.

“The agency will explain how debts arose, where to go for more information, how to self-service and offer other support.”

Welfare advocate Kym Mercer said FTB recipients, such as Bishop, who wanted to dispute their debts and receive the lump payment would need to wait until February when payments could be balanced.

“These families have been waiting since July 1st and (they’re) still waiting to know if they do or don’t have a debt and they can’t appeal until this is done. This affects any balancing,” Mercer said.

“This causes many people anxiety and stress … this flow on effect can have big impacts on the economy and family Christmas plans.”

Unemployed Workers Union spokesperson Kristin O’Connell slammed the department for “mishandling debts”.

“(Its) preventing people from being able to have certainty about what they’re going to be able to plan for and their financial future. It’s just a travesty, it’s really harming people,” O’Connell said.

“We know that we’ve had the rates cut for income support – and people plan to get these payments.

“No one has any extra money when they’re on these payments. People are planning around the expected date that they’ll receive it and the fact that they don’t know when that’ll happen – let alone if they’ll even get the payment at all – is going to be causing real harm for families.”

She said the government’s lack of transparency around the debt recovery extension was part of a broader suit of policy changes which were contributing to low-income earners’ mental anguish.

“It’s the combined effect of all of these policy changes and inept handling of welfare that is producing really severe mental health harm,” O’Connell said.

“We know that there has been an unprecedented need for mental health support across the country, and obviously particularly in Victoria.

“At the same time income support has been cut, eviction moratoriums have been lifted and people are not able to clarify what’s going to happen with their Family Tax Benefit.

“It’s really got a horrific compounding effect and we know that parents are already under extreme stress.”

O’Connell’s comments come as the Federal Government yesterday indicated the additional $250 fortnightly coronavirus supplement could continue into next year, with an announcement expected before December 10.

Without the coronavirus supplement, the welfare payment would return to its pre-pandemic rate of an average $550 a fortnight or $40 a day – an amount which had not risen in real terms for decades despite ongoing criticism it was below poverty level.

InDaily contacted Services Australia but the agency did not respond before deadline.

Services Australia General Manager Hank Jongen later said in a statement: “As with all decisions Services Australia makes, if a customer needs more information to understand the decision, or disagrees with it, they can contact the agency on their regular payment line.”

“Staff will explain the reason behind the overpayment and if the customer disagrees with this, they can ask for a review,” he said.

Jongen pointed FTB recipients to the Services Australia website for further information about how to request a review.

“Before we can pay a FTB lump sum claim, or balance FTB payments, we need families to confirm their income,” he said.

“Families can confirm their income by either lodging their tax returns or advising Services Australia that they are not required to lodge.

“If families have lodged tax returns, the Australian Taxation Office will send us the income information.”

-with AAP

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