The end of the financial year tends to sneak up on most of us. But if your family receives the Child Care Subsidy, there’s a little more to EOFY than just tracking down receipts. Each year, Services Australia balances your CCS, reconciling what you received against what you were actually entitled to. For most families, the process is straightforward. Knowing what to expect, and what to do, means no surprises.
How your CCS is calculated across the year
CCS is paid based on an estimate of your family’s annual income - one you provide at the start of the year or when you first apply. Services Australia uses that figure to calculate how much subsidy is applied to your childcare fees throughout the year.
The key word there is estimated. Your actual income, confirmed once your tax return is lodged, may turn out to be higher or lower. That difference is what the end of financial year balancing process is designed to sort out.
What happens after 30 June - the balancing process
Once the financial year closes, Services Australia compares your estimated income with your actual income as reported to the ATO. This is known as CCS balancing, and it can result in one of three outcomes:
- Your income matched your estimate: No adjustment is needed - your CCS was right on track.
- Your actual income was lower than estimated: You may receive a top-up payment, because you were entitled to a higher subsidy rate than you received during the year.
- Your actual income was higher than estimated: You may need to repay some CCS, because more subsidy was applied than your income entitled you to.
Changes in income are very common - a return to work after parental leave, a change in hours, a pay rise, or a new role can all affect your entitlement. An adjustment at balancing time doesn’t mean anything went wrong; it’s simply the system correcting for the difference between estimate and reality.
What you need to do
The good news is that for most families, balancing is triggered automatically - all it takes is lodging your tax return. Once you (or your partner) lodge a tax return with the ATO, Services Australia picks up that information and completes the balancing process. If you’re not required to lodge a tax return, you’ll need to confirm this with Centrelink through your myGov account.
A few steps worth taking now:
- Log in to myGov and check that your income estimate is current. If your income has changed significantly during the year, updating it now can help reduce the size of any adjustment at balancing.
- Lodge your tax return as soon as you’re ready after 1 July. There’s no benefit in waiting, and a prompt lodgement means balancing is resolved sooner.
- If you’re not required to lodge, confirm this through myGov so Services Australia can complete your balancing without delay.
- Keep an eye on your myGov inbox for correspondence about your balancing outcome once it’s processed.
What if you don’t lodge?
If neither you nor your partner lodges a tax return, or confirms you’re not required to, within 12 months of the end of the financial year, your ongoing CCS may be affected until the lodgement is complete. Most families who lodge promptly won’t experience any disruption. But if you’ve been putting off your return, now is a good time to get it done.
A note on keeping your income estimate up to date
EOFY balancing is much smoother when your income estimate has been reasonably accurate across the year. If your family’s income changes at any point - not just at tax time - it’s worth updating your estimate through myGov. That way, you’re less likely to end up with a significant debt or a large top-up at the end of the year.
If you work with an accountant or tax agent, check in with them soon about timing. They’ll handle the lodgement itself, but a quick conversation about your CCS can make sure nothing falls through the cracks.
Where to find help
For personalised information about your CCS, Services Australia is the right place to start:
- Visit servicesaustralia.gov.au/child-care-subsidy for CCS information and balancing guidance.
- Log in to myGov to check your income estimate, CCS status, and any correspondence.
- Call the Families line on 136 150 if you have a question that needs a real answer.
Our team is always happy to talk through how CCS works in the context of your family’s care arrangement, and you can find more information on our CCS page.