Managing overpayments

Understand what happens if you get a Parental Leave Pay overpayment for a child born or adopted from 1 July 2023.

Overpayments of Parental Leave Pay

You may be overpaid Parental Leave Pay if any of the following apply:

  • you worked on a date that you got Parental Leave Pay
  • your circumstances changed and you didn’t tell us
  • you were no longer entitled to the payment.

If you’ve been overpaid Parental Leave Pay and are still getting it, we may offset the overpayment from any Parental Leave Pay arrears payments. We’ll offset it automatically, which means you may not have to repay the amount later.

We may also do this if the overpayment was from getting both of the following at the same time:

  • Parental Leave Pay
  • an income support payment.

In this situation, we’ll offset the overpayment amount with the Parental Leave Pay arrears amounts.

If you still have an overpayment, or if we’re not able to offset it, we’ll send you an Account Payable notice. This will tell you the amount of the overpayment and when you need to start repaying the money.

Your Account Payable notice will provide information on how to start repaying the money you owe. Remember, you don’t need to pay it all at once. Most people pay the money they owe over time. If you disagree that you’ve been overpaid or you can’t start repaying, please talk to us. You should call us on the Centrelink families line before the due date in your notice.

You’ll have to repay the gross amount. This includes both:

  • the net amount of Parental Leave Pay you got from us or from your employer
  • the Pay As You Go (PAYG) withholdings that we or your employer paid to the Australian Taxation Office (ATO) for Parental Leave Pay.

You’ll be able to request a refund of PAYG withholdings.

Refunds of PAYG withholdings when an overpayment occurs

Overpayment occurred in the current financial year

For payments we paid to you directly, you can request a refund of the PAYG withholding amount from us. You can do this by calling the Centrelink families line. We can recover this amount from the ATO. Read more about varying your PAYG withholding on the ATO website or speak with your employer.

For payments paid to you by your employer, we’ll recover the gross amount of the overpayment from you. You can request a refund of the PAYG withholding amount from your employer. You can only do this if the overpayment occurred in the current financial year. Your employer will refund this amount to you.

Overpayment occurred in a previous financial year

You’ll need to recover the PAYG withholding amount from the ATO. You’ll have to do this if you were overpaid by us or by your employer.

If the ATO hasn’t completed your income assessment, you can get an offset of the overpaid PAYG withholding amount. This is in the calculation of your tax return.

If the ATO has completed your income assessment, you should apply in writing to them for an amended income assessment. You should provide them with a copy of the Account Payable notice you got from us.

Overpayment occurred in 2 financial years

If you were overpaid across 2 financial years, you’ll need to complete both of the previous 2 processes. This is so you’ll get a refund of the full PAYG withholding amount.

Payment summaries

Parental Leave Pay is a taxable payment. This means you’ll get a payment summary.

If you were overpaid, you’ll get an amended payment summary.

You’ll get your payment summary or amended payment summary from us or your employer, depending on who delivered the payment.

If your employer hasn’t issued your payment summary for the year the overpayment occurred, they must adjust their payroll record. This is so they don’t report the overpaid amount as income on your payment summary.

If your employer already issued your payment summary for the year the overpayment occurred, they need to give you either:

  • an amended payment summary
  • a letter containing relevant information about the overpayment for you to provide to the ATO.

Your employer will do this within 28 days of when they became aware of the overpayment.

The process to amend payment summaries is similar to the process that applies to overpaid salary or wages.

Page last updated: 26 June 2023.
QC 64503