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Child Care Subsidy

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The Federal Government’s new Child Care Subsidy offers the perfect opportunity for many Australian families to gain access to a vital and much-needed service.

Commencing in July 2018, the initiative is designed to enable more low and middle-income families to access affordable, flexible and high-quality childcare.

Simpler than the older multi-payment plan, the new single, means tested subsidy replaces the Child Care Benefit (CCB) and Child Care Rebate (CCR).

How Does It Work?

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Subsidies will be paid directly to service providers, who will then pass them on to families in the form of fee reductions. Families will then pay their provider the difference between their subsidy and the fees charged.

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Most families earning $66,958 or less will receive a subsidy of 85% (subject to CCS hourly rate cap)

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Families earning over $66,958 will see their subsidy gradually decrease to 50% when their income reaches $171,958

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Families earning over $171,958 will see their subsidy gradually decrease to 20% when their income reaches $341,248

Families earning over $171,958 will see their subsidy gradually decrease to 20% when their income reaches $341,248

Families earning over $351, 248 or more will receive zero subsidy

Families who have a CCS percentage but don’t qualify for any activity hours will be able to access 36 hours per fortnight at our kindergarten program.

Who is Eligible?

Children who are classed as a ‘Family Tax Benefit child’ or ‘regular care child’ are eligible for the Child Care Subsidy.

  • They must be aged 13 or under, not attending secondary school, and meet immunisation requirements.

  • The person claiming the Child Care Subsidy (or their partner) must meet residency requirements and also satisfy the Child Care Subsidy activity test.

  • Childcare services must also be provided by an approved provider in Australia and not be part of a compulsory education program.

How are Child Care Subsidy assistance levels determined?

The level of Child Care Subsidy assistance a family receives will be determined by a three-step activity test, with the key parameters being:

  • Combined family income estimate for the 2018–19 financial year.
  • The type of childcare service required.
  • The activity level of both parents.

 

The great news is that a broad range of activities will meet the activity test requirements, including paid work, being self employed, or doing unpaid work in a family business. If you’re looking for work or volunteering or studying, you’ll still be able to satisfy the activity test. Importantly, those who genuinely cannot meet some eligibility requirements may be eligible for exemptions.

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Low income families on annual incomes of $66,958 or less who don’t meet the activity test will be able to access 24-hours of subsidised care per fortnight without having to meet the activity test. For the first time, families who used the discontinued Budget Based Funded system will be eligible for childcare fee assistance.

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How does the activity test work?

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For families earning up to $351,248 per annum, the table below indicates how many hours of subsidy you will receive per hour of activity per fortnight.

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Hours of Activity          Hours of Subsidy 

8 to 16 hours                 36 hours

16 to 48 hours               72 hours

Over 48 hours               100 hours

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             Recognised activities

  • paid work including being self employed
  • paid or unpaid leave, including paid or unpaid parental or maternity leave
  • doing an approved course of education or study
  • doing training to improve work skills or employment prospects
  • unpaid work in a family business
  • actively looking for work
  • volunteering
  • unpaid work experience or unpaid internship
  • actively setting up a business
  • other activities on a case by case basis

 

However, some of these activities will only be recognised for a certain amount of time. The government will only count:

setting up a business for 6 months out of every 12 months

  • periods of unpaid leave for up to 6 months – this doesn’t apply to unpaid parental leave

If you’re looking to apply for child care assistance for the first time, visit education.gov.au for more information.

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