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Childcare Subsidy

The Child Care Subsidy – what you need to know

Wondering how the changes to the Child Care Subsidy will affect you and your family? We understand. It can be a bit of a minefield! Let’s break it down.

What’s changed with the Child Care Subsidy?

On 2 July 2018, the Australian Government replaced the Child Care Benefit (CCB) and Child Care Rebate (CCR) with a single, means-tested child care package. This is known as the Child Care Subsidy (CCS).

How does the Child Care Subsidy work?

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.

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)
  • 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 can I work out my entitlements?

There are three factors that determine a family’s level of Child Care Subsidy. These are:

  1. Your combined annual family income

Determining the income bracket your family fits into will help you figure out how much of the Child Care Subsidy you’re entitled to:

  • Families with combined earnings of $65,710 or less will receive a subsidy of 85 percent of the actual fee charged
  • For families earning above $65,710, the subsidy gradually decreases to 20 percent when the combined family income is between $250,000 and $340,000
  • Families earning between $170,710 – $250,000 will receive a subsidy of 50 percent of fees
  • There is no annual cap on subsidies for families under $185,710
  • For families with incomes of $350,000 or more, there is no subsidy.
  1. An activity test

Do you do a mixture of paid work, study and volunteering? 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). Recognised activities that are taken into account include:

  • paid work – including leave, such as maternity leave
  • study and training
  • unpaid work in family business
  • looking for work
  • volunteering
  • self-employment
  • other activities on a case-by-case basis.

You’ll find more info on the activity test here.

  1. The service you’re accessing

The type of child care service you use, and whether the child attends school, will also be taken into account. There is also targeted additional fee assistance for vulnerable families through the Child Care Safety Net.

 

Can I work out an estimate of what I’m entitled to?

Yes. To find out what your family is entitled to, enter your details into the Department of Human Services Payment and Service Finder. You’ll also find more information about the Child Care Subsidy here.