Facts about the new child care subsidy for parents!

Saturday, February 10, 2018

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As of July 2, 2018 the existing Child Care Benefit and Child Care Rebate subsidy scheme will be replaced by the single payment Child Care Subsidy across Australia.

As with anything new, many rumors have been circulated about what is wrong and right with the new Child Care Subsidy package. To help you understand it, let’s break it down into the simple facts of the Child Care Subsidy and you can determine how they will impact you.

child care subsidy

 

Combined family income determines subsidy level 

The new payment remains a means-tested subsidy. This chart shows what subsidy level you can expect based on your combined family income:

Combined Family Income                                          Subsidy Rate ^
Up to $65,710 85%
Over $65,710 to under $170,710 Gradually reducing to 50%
$170,710 to under $250,000 50%
$250,000 to under $340,000 Gradually reducing to 20%
$340,000 to under $350,000 20%
$350,000 or more 0%

^ Subsidy rate of the actual fee charged or the maximum hourly rate cap (whichever is lower).

These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.

You’ll have to meet the activity test to access the Child Care Subsidy

In order to ensure that families who are working can access child care, the subsidy includes an activity test. This chart shows the level of activity and its associated number of hours of subsidised child care:

Step Hours of activity*                                                Maximum number of hours of subsidy per child*
1 8 hours to 16 hours 36 hours
2 More than 16 hours to 48 hours 72 hours
3 More than 48 hours 100 hours

*Per fortnight

The activity test includes paid work as well as:

  • Working as a self-employed individual
  • Undertaking unpaid work for a family business
  • Completing training courses to improve work skills or employment prospects
  • Enrolled in an approved course of education or study
  • Volunteering
  • Actively looking for work

Not working? You may still have access to the Child Care Subsidy

The new child care package includes a Child Care Safety Net, which allows low-income families who earn less than $65,710 each year and do not fulfil the requirements of the Activity Test to access 24 hours of subsidised care each fortnight. This is to ensure all children have access to early childhood education.

No more cap

The existing child care system is capped at $7,500, however, for most families, it will no longer be capped. A family earning over $185,710 to $350,000 each year will still be capped, but the cap is increased to $10,000.

Read more here for the impact of ‘The new child care package for approved child care providers‘.

For complete information about the Child Care Subsidy and new package launching as of July 2, 2018 visit https://www.education.gov.au/child-care-subsidy.

*Remember, Your information does not automatically rollover to the new system and you may not receive any subsidy if your assessment is not completed. Click here to find out how you can transition to the new system.

 

 

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