What is reconciliation?
A family’s Child Care Benefit (CCB) Fee Reductions are provisional entitlements based on their estimated annual family income. During the financial year, families who choose to receive CCB as Fee Reductions have their entitlement paid to their service on their behalf.
At the end of the financial year, the Family Assistance Office (FAO) compares the family’s provisional entitlement paid as CCB Fee Reductions to their actual entitlement, based on the family’s actual taxable income for the year. This process is called reconciliation or balancing the family’s payments.
The FAO begins its reconciliation process in the last week of July each year. It is done progressively, as families lodge their tax returns with the Australian Taxation Office. Some families do not have to lodge a tax return and their payments are reconciled automatically.
Once a family has had their CCB entitlement reconciled by the FAO for the financial year, all further payments and adjustments for the year are managed directly between the FAO and the family. CCB for that financial year can no longer be paid to a service on behalf of the family.
What happens when I cancel an attendance before reconciliation?
When an attendance is submitted for a week and the customer is claiming CCB by Fee Reduction, CCB is normally paid to you on behalf of the family based on that particular family's CCB eligibility. When an attendance record is cancelled, the amount of CCB fee reduction for that transaction is recovered from you as an adjustment to your next payment from DEEWR.
How does reconciliation affect CCB payments to my service?
After reconciliation has occurred, any further adjustments to a family’s CCB entitlement for the previous financial year are managed between the FAO and the family. If any additional CCB is owed, it will be credited to the family - not to your service. You can reduce the impact of this on your accounts by making sure you keep up to date with submitting your Attendance Record Reports to the CCMS for processing, particularly at the end of the financial year. Make sure you submit any corrections to attendances for earlier periods before the reconciliation process begins in July.
What happens if I submit my Attendance Reports late, or need to re-submit them?
You must submit your Attendance Reports within 14 days of the end of the week where care is provided. If you do this, you will be up to date before reconciliation begins. If you are late submitting your attendances, or if you have to cancel and resubmit some Attendance Reports that occurred in the previous financial year, then you run the risk that FAO will pay the CCB entitlements directly to families, not your service. You may have to bill families for the full fee, not just the gap fee.
What happens if an attendance in the previous financial year is not submitted until after the family’s FAO reconciliation process has occurred?
You have a legal obligation to report attendance information for all children in care no longer than two weeks after the care is provided. If you do not meet this obligation and submit Attendances to the CCMS after a family’s CCB entitlement has been reconciled by the FAO, the CCB is managed by the FAO directly with the family. CCB will be credited directly to the family; it is not paid to the service on behalf of the family as a Fee Reduction. A warning message will appear on the returned attendance record to alert you CCB will be adjusted with the family.
What if an attendance in the previous financial year is cancelled and not replaced?
You have received CCB for a particular day or week and passed it on to the family as reduced fees. Later, you realise you made a mistake and cancel the attendance. FAO will recognise that the family has received CCB for a period where it appears no care has been provided and deduct that amount from the family’s entitlement.
What if an attendance in the previous financial year is cancelled and replaced with higher usage?
You have received CCB for a child attending care three days a week and have passed this on to the family as reduced fees. Later, you realise the child’s attendance increased to five days a week during June. You cancel the original attendance reports for three days per week and submit new reports for five days per week. FAO will recognise that the family is entitled to extra CCB and credits the CCB to the family accordingly. If you have not previously billed the family for the extra two days per week, you will need to bill the family for the full cost of care on those extra days, not just the gap fee.
What if an attendance in the previous financial year is cancelled and replaced with lower usage?
You have received CCB for a child attending care four days per week and have passed this on to the family as reduced fees. Later, you realise the child’s attendance reduced to two days per week during June. You cancel the original attendance reports for four days per week and submit new reports for 2 days per week. FAO will recognise that this family has received too much CCB and deducts the relevant amount from their entitlement. If you continued to charge a gap fee for the extra 2 days per week, you have over-charged the family and will have to credit that amount to the family’s account.
Can I charge families a gap fee if I don’t know the exact amount of CCB they are entitled to?
Approved services have no obligation to estimate or calculate CCB Fee Reductions in advance. If you choose to charge the approximate gap fee before you are notified of the exact CCB amount via the CCMS, there may be complications when attendance changes span two financial years. There may be occasions when your re-submitted attendance report results in a reduction in CCB entitlement to the family. In this event, the gap fee will increase and you will need to charge the family extra fees. This can be difficult to explain, as the family has received a negative adjustment from the FAO and an extra bill from you and they may feel they are paying twice.
How will I know if a family has completed end of financial year reconciliation with the FAO?
If you submit an attendance record to the CCMS for a family who has completed their end of financial year reconciliation you will receive a message after the attendance record has been processed to let you know the family has completed reconciliation and all further CCB entitlement for the previous financial year will be adjusted with the FAO.
What if I submit an attendance for the previous financial year and the family has not completed reconciliation with the FAO?
In this case the CCB will be paid to you on behalf of the family as usual and you pass it to the family as a reduced fee.
Can I charge families their fees in advance?
You can charge families fees in advance but services who estimate CCB Fee Reductions in advance (and charge families the gap fee only) need to fully understand they will not receive CCB for attendances submitted, or cancelled and resubmitted, after reconciliation has occurred. When a child enters care, consider charging full fees up front and applying CCB fee reductions when the exact amount is calculated by the FAO. If you estimate CCB in advance and charge for the gap fee only, families may resist paying the balance of the fees, even though they have been credited with the CCB amount by the FAO.
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You have submitted an attendance report to CCMS for care that occurred in the last week of June. As you charge fees in advance and estimate CCB fee reductions you have already issued family statements and the family has paid the gap fee for this week.
You realise there is an error and you have charged the family for two days care instead of three for the last week in June.
You cancel and resubmit the attendance report but the family has completed end of year reconciliation. They have also updated their income details with the FAO which has resulted in a lower CCB percentage.
You are now in the uncomfortable position of having to charge the family full fees for the extra day of care as the CCB will go directly to the family, not to you.
Since the family believes they have already paid the fees for this week and it was your error that caused the problem, they resist paying the extra fees and leave your service without paying you the outstanding balance |