The Commonwealth Ombudsman, Mr Ron McLeod, today released his report detailing an investigation of the family assistance scheme, including the Family Tax Benefit (FTB).

‘My report raises a number of concerns with the operation of the family assistance system, particularly the large number of debts, their size, and the impact on low income families,’ Mr McLeod said. ‘Many debts seem to have an unfair retrospective effect that cannot be anticipated by families and are beyond their control.’

The report contains 18 recommendations for improvements to the system, including:

• waiving debts in some circumstances, including where they resulted entirely from errors by the Family Assistance Office
• changing the way children’s income is assessed so that parents won’t have overpayments because their children earned more than anticipated, and
• allowing families to receive their full entitlement to family assistance when lodging late tax returns.

The Ombudsman also noted that sole parents, who are a particularly disadvantaged group in the community, face particular obstacles that increase the likelihood of FTB overpayments. ‘Even if my recommendations are adopted in full, there are still likely to be significant numbers of unavoidable debts for some families,’ he cautioned.

‘I have suggested that the government consider broader policy change to improve the system,’ Mr McLeod said. ‘At the same time, I recognise that policy change would need to be considered against the government’s overall policy objectives for government assistance.’

Full text of the Ombudsman’s report is available at: www.ombudsman.gov.au

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Date of release: 28 February 2003