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What changes with the new Child Care Subsidy?

The Australian Government has changed the Child Care Benefit (CCB)/ Child Care Rebate (CCR) subsidy and implemented a new child care package called the Child Care Subsidy. It makes child care more flexible, accessible and affordable for families.

Update: The CCS came into effect 2nd July, 2018 this year. To calculate your net weekly fee, try our new interactive calculator.

Key changes for families:

* The Child Care Subsidy commenced on 2 July 2018
* Single, means and activity tested payment
* Eligibility is determined by an activity test (both parents must work, study or volunteer at least 8 hours a fortnight)
* For families earning more than $185,710 an annual subsidy cap of $10,000 per child will apply
* Paid directly to service providers and passed on to families as fee reduction
* Families will receive a fortnightly statement via email of child care usage from Kids Club, which includes the payment of the subsidy and out of pocket costs.

What determines a family’s level of child care subsidy?

1. Combined family Income
2. Activity Level of both parents
3. Type of Child Care Service (for us: Long Day Care)

Combined Family Income

* Families earning $65,710 or less will receive a subsidy of 85% of the actual fee charged (up to 85% of an hourly rate cap).
* Family incomes above $65,710 – the subsidy gradually decreases to 20% when family income between $250,000 and $340,000.
* Families on $170,710 – $250,000 will receive a subsidy of 50% of fees
* No annual cap on subsidies for families under $185,710
* For families with incomes of $350,000 or more, there is no subsidy.

Please click here to try our interactive Child Care Subsidy Net Weekly Calculator to determine you out of pocket expenses at Kids Club.

Please click here to view the Child Care Subsidy estimator from Centrelink.

2. Activity Level of both Parents

The number of hours of subsidised care will be determined by an activity test. The higher the level of activity, the more hours of subsidised care families can access, up to a maximum of 100 hours per fortnight.

RECOGNISED ACTIVITIES:

•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.

Activity Test Example – hours of activity

• Parent one, works 76 hours per fortnight – Step 3 of the Activity Level

• Parent two, works 40 hours per fortnight – Step 2 of the Activity Level

As parent two has the lower activity, the family is eligible for 72 hours per fortnight of subsidised child care.

3. Service type: Hourly Fee Cap for Long Day Care

Fee subsidies based on a set hourly rate ($11,55 for centre-based day care)

Support for disadvantaged and vulnerable families

The package also provides targeted additional fee assistance through a new Child Care Safety Net.
The Additional Child Care Subsidy (July 2018) – a top up payment for families who are genuinely disadvantaged.

Refer to the new child care package Child Care Safety Net factsheet for additional information.

Note: the government will be holding back 5% of CCS paid to families until reconciliation at the end of every financial year. This balance will be paid back to families in their tax return if they are eligible.

Transitioning to the new system

Under the new system, existing child care payments will be replaced with the Child Care Subsidy and Additional Child Care Subsidy.
Centrelink will contact families directly to provide information on current entitlements and how they may change under new arrangements. This may include asking families for additional information, to ensure that they move onto the new payment system smoothly.

For more information on the new child care package, visit www.education.gov.au/childcare

By Helen Korch, Enquiries Manager