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A BRIEF GUIDE TO THE NEW CHILD CARE SUBSIDY

Starting Blocks aims to help new parents with their first steps into parenting, especially when it comes to child care options. A topic of particular interest at the moment is the changes to the subsidies that the Australian Government provides to families of children in child care.

The current system is set to change on 2 July 2018 and it’s important to be aware of the changes, how they might impact your weekly budget, and what you need to do to ensure that you continue to receive the benefits.

Current payments

Under the current system there are two payments:

  1. Child Care Rebate – this covers 50% of your child care fees up to an annual cap of $7500.
  2. Child Care Benefit – this is an income-tested fee reduction and is usually paid directly to your child’s care service.

The new Child Care Subsidy

From 2 July 2018, the two payments above will be replaced with a single, means-tested subsidy. It will be paid directly to your child’s care centre.

Am I eligible?

To be eligible, you will need to earn less than $351,248 in combined family income and be undertaking one or more of the following activities for at least 8 hours a fortnight: paid work (includes if you are currently on leave); self-employment; unpaid work in a family business; looking for work; volunteering; training; or studying. (There are exemptions for parents who cannot meet these activity requirements.)

How much will I receive?

How much subsidy you receive will depend on:

  • your family’s combined income – this gives you the percentage of the child care fees you will receive a subsidy for
  • the type of care your child is attending – the maximum subsidy you receive per hour depends on the type of care
  • the number of hours you are undertaking the activities outlined above – this tells you the number of hours you can claim the subsidy for.

(The following tables are based on those from the Department of Human Services (note that the amounts are correct for 2018/19 only)

 

Your combined family income and the subsidy you will receive:

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The maximum subsidy you receive per hour depends on the type of care your child attends:

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The number of hours you can claim the subsidy for depends on the number of hours you undertake one of the activities outlined above. If you have a partner, the number of hours goes according to the parent with the lowest hours of activity each fortnight.

 

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What do I need to do?

Even if you are currently receiving the Child Care Benefit or Child Care Rebate, you will need to update your details through your Centrelink account on MyGov.

You will need to provide a combined family income estimate, the hours of recognised activity, and details about the type of care your child is in.

More information

The Department of Education has detailed information on the Child Care subsidy. Visit education.gov.au/childcare.