(02) 9948 5546 Early Learning Centre and Preschool in Seaforth

Childcare Subsidy

The Child Care Subsidy – what you need to know

Not sure about the Child Care Subsidy and whether you’re eligible? Or wondering about the recent changes and how they might affect your family? We understand. It can be a bit of a minefield! Let’s break it down.

Who can get the Child Care Subsidy?

Families must meet eligibility criteria to get CCS and as a parent, you must:

  • Care for your child at least 2 nights per fortnight or have 14% share of care
  • Be liable for child care fees at an approved early childhood education care service
  • Meet residency requirements

Your child must also meet immunisation requirements.

If your child doesn’t attend a session of care at least once in 26 consecutive weeks, they’ll stop being eligible for CCS. If a child starts to attend care again, a family can make a new claim for CCS.

How does the Subsidy work?

Firstly, you’ll need to lodge a claim for CCS with Service Australia and provide us with customer reference numbers (CRN) for the child and the parent claiming the CCS. If you’re parent claiming the CCS, you’ll be advised once the CRN has been entered into the system as you then need to log into your MYGOV account and confirm the booking before CCS will start to come through for you.

The Subsidy is paid directly to child care providers and the rebate is passed on to families as a fee reduction. Families make a co-contribution to their childcare fees, and pay the provider the difference between the fee charged and the subsidy amount. It’s simpler than the previous multi-payment system, and is designed to offer more assistance to low and middle-income families.

What’s changed with the Child Care Subsidy?

From July 2023 the Australian Government increased its Child Care Subsidy (CCS) rates for families – and this is great news for Seaforth Childcare families, because it can mean cheaper childcare for your child.

The CCS percentage you’re entitled to does depend on your income, but here are some of the key changes:

  • The income limit for CCS increased from $356,756 to $530,00
  • Families earning up to $80,000 can get an increased maximum CCS amount, from 85% to 90%
  • If you earn over $80,000 you may get a subsidy starting from 90%. This will go down by 1% for each $5,000 of income your family earns. You’ll either get more subsidy or have no change to your entitlement
  • If you have more than one child aged 5 or under, you can still get a higher rate for one or more of your children.
  • The low income limit for Additional Child Care Subsidy Transition to Work has also increased to $80,000 and
  • Aboriginal and Torres Strait Islander children now get at least 36 hours of subsidy per fortnight, regardless of the amount of recognised activity you do.

If you already get CCS, you don’t need to do anything to get the increased rate. The changes will be applied to your CCS automatically.

Is my family eligible for the Child Care Subsidy?

In order to receive the Child Care Subsidy, you’ll need to fulfil some basic requirements, including:

  • Your child must be under 13 years old (and not attending secondary school unless an exemption applies).
  • Your child must meet immunisation requirements (check your child’s immunisation status at Medicare via MyGov)
  • You or your partner must meet the legislation’s residency requirements
  • You must be liable to pay for the care provided
  • The care must be delivered in Australia by an approved childcare provider and not be part of a compulsory education program.

How much CCS can a family get?

It really depends on your circumstances – and Service Australia works out a family CCS percentage based on your family income estimate.

So if your family income is… up to $80,000
Your subsidy rate is 90%

If your family income is… $80,000 to below $530,000
Your subsidy rate will be decreasing from 90%, with the percentage dropping by 1% for every $5000 of family income.

If your family income is… $530,000 or more
Your subsidy rate is 0.

To work out your hourly rate

This subsidy percentage is up to the max hourly cap, which is $13.73 per hour.

To work our your hourly rate, divide the room daily rate by the number of hours we are open which is 11.5. So for example, in the Starfish room the rate is $198.00 per day. If your child is in that room, you’d divide by 11.5 = $17.21 is the hourly rate.

So if you are getting 90% of the subsidy you will get 90% up to $13.73, then you pay the gap from $13.74 to $17.21 per hour.

A family’s CCS percentage is the amount the government will subsidise. It will apply to the hourly fee or the relevant hourly cap – whichever is lower.

The number of children you have in care

If you’re a family with more than one child aged 5 or under in care, you may get a higher subsidy for your second child and younger child.

The rates for each child are worked out using two separate income tests.

  • The ‘standard rate child’ is usually the eldest CCS eligible child aged 5 or under. The standard rate child will get standard CCS rates.
  • The ‘higher rate child’ is the second and any younger children aged 5 or under. The higher rate for the second and younger children is calculated using the rates for the second and younger children.

The higher subsidy for second and younger children ends when a family earns $362,408 or more.

Your level of activity matters, too

The hours of subsidised care a family can get each fortnight depends on their activity level. The higher the level of activity, the more hours of subsidised care families can get. Services Australia looks at both parents’ activity level. They use the parent with the lower activity to determine a family’s hours of subsidised care.

You need to do a recognised activity to get CCS (such as paid work, study, training, volunteering, etc). Exemptions apply for parents who cannot meet activity test requirements. The activity test looks at what both parents do on a weekly basis and works out the number of hours of subsidised care you’re entitled to. Essentially, the more ‘activity’ you do, the more hours of subsidised care you can potentially access (up to 100 hours per fortnight). 

The type of care you’re accessing

The type of child care service you use, and whether the child attends school, will also be taken into account. A family’s CCS percentage will apply to the lowest of either the hourly rate cap, OR the the hourly fee you charge at your service.

2023/2024 hourly rate caps

$13.73 – for children non school age
$12.02 – for school aged children.

There is also targeted additional fee assistance for vulnerable families through the Child Care Safety Net.

Please note: As we bill 2 weeks in advance, your CCS will be worked out as an estimate. Once your child attends, we submit the attendance to CCS at the end of each week and CCS will then confirm the amount of CCS that has been estimated and credited to your account.

This may result in a debit or credit to your account depending on the amount of CCS estimated.

If you’d like more information on CCS, head to the Services Australia website.