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New Child Care Package: info you need

Parent walking child to kindergarten
iStock.com/Nadezhda1906

 

Confused about the new Child Care Subsidy and how it will affect your family? Don’t stress. We’ve compiled the most relevant and up-to-date information we could find to answer all of your questions, or point you in the right direction.

The facts 

New Child Care Subsidy to assist families with their childcare fees to be implemented in July 2018.
It replaces the current Child Care Benefit (CCB) and Child Care Rebate (CCR) with a single, means-tested subsidy, determined by: 

  • How much your family earns.
  • How much you work, train or volunteer.
  • The childcare fees you pay.

The new package will be administered through your MyGov account.

The numbers 

  • Families on $66,958 or less will receive a subsidy of 85 per cent of their childcare fees.
  • Families on $66,958 to under $171,958 will receive a subsidy that is tapered down from 85 per cent to 50 per cent, receiving 1 per cent less for every $3000.
  • Families on $171,958 to under $251,248 will receive a subsidy 50% of their fees.
  • If your family earns $251,248 to under $341,248 you will receive a subsidy that is tapered down from 50% to 20%, receiving 1% less for every $3000.
  • Families on $341,248 to under $351,248 will receive a subsidy of 20% of their fees.
  • Families earning more than $351,248 won’t receive a subsidy.

The subsidy will be paid directly to child care providers so families will have to pay the gap between their childcare fees and their Child Care Subsidy.
To find out how the changes will affect your family’s situation, check the online estimator  

Frequently asked questions 

What’s staying the same?

The new subsidy is designed to reduce out of pocket expenses based on the fees paid by families.

  • Free or very low cost access for children will still be available for children at risk, financial hardship, grandparent carers and those transitioning to employment.
  • A safety net will provide 24 hours of subsidy per fortnight for children from low income families with at least one parent not working.
  • Families will still deal with Centrelink (DHS) and Family Assistance Office to determine their eligibility and to get a CRN.
  • A broad range of ‘activity’ will be recognised to be eligible for the subsidy, including volunteering, studying and looking for work.

What’s changing?

  • A new Child Care Subsidy (CCS) will replace the current child care benefit and rebate. It will be paid directly to your childcare provider.
  • New hourly fee cap of $11.77 per hour will be introduced for long day care.
  • Annual CCR cap will be abolished entirely for families earning less than $186,958. For families earning more, the cap will be lifted from the existing $7,500 a year to $10,190 per child.
  • Families can access up to a maximum of 100 hours of subsidised care per fortnight dependant on how much they are working, studying or doing other approved activity.
  • New Government IT system will be rolled out to support the implementation of the new package.

Will the system still include an annual cap? 

  • If your combined family income is less than $186,958, the existing $7500 cap has been abolished.
  • If your family has a combined income of between $186,958 and $351,248, the cap has been increased to $10,190 per child (the current rebate cap is $7,613).
  • Instead of the annual cap, fee subsidies will be based on a set hourly rate of $11.77 for long day care. So, if your child care fees are more expensive than this, you will be responsible for paying the difference.  For example:
  1. Family 1 is charged $100 per day for a 10-hour session – that is $10 per hour. As this is less than the maximum hourly rate cap of $11.77, the percentage of subsidy will be based on what they pay - $10. If their combined family income is $65,000 they will be entitled to a subsidy of $8.5 per hour (85% of $10). 
  2. Family 2 is charged at $130 per day for a 10-hour session – that is, $13 per hour. Because this is more than the maximum hourly rate cap, their level of subsidy will be based on the cap if $11.77. If their combined family income is $65,000 they will be entitled to a subsidy of $9.82 per hour (85% of $11.55).

What is the family activity level and how does it apply to the subsidy?

  • A new Federal Government activity test will determine how many hours of Child Care Subsidy a child will receive. For most families, both parents will be required to work, study, volunteer or participate in ‘recognised activities’ for at least eight hours a fortnight to get the maximum benefit.
  • Hours of subsidised care will be determined by the parent with the lowest hours of activity (e.g. if dad is working 50 hours a week and a mum is working a 20 hour week – it will be the mother’s activity that will be assessed).
  • Generally the more hours of activity you do the more subsidised hours you are entitled to.
  • Here’s a breakdown of the hours of subsidised care you can access based on your amount of activity:
  1. Families working less than 8 hours per fortnight are eligible to receive 12 hours per fortnight of subsidised care, if the annual family income is less than $66,958.
  2. Families working 8 – 16 hours per fortnight are eligible to receive 36 hours per fortnight of subsidised care.
  3. Families working 16 – 48 hours per fortnight are eligible to receive 72 hours per fortnight of subsidised care.
  4. Families working more than 48 hours per fortnight are eligible to receive 100 hours per fortnight of subsidised care.

What is classed as a recognised activity? 

  • Recognised activity includes working, studying, training, looking for a job, paid and unpaid leave, travelling from your child care centre to your place of work or study, unpaid work in a family business, setting up a business, work experience and volunteering in the community. 
  • If families are doing multiple activities, these can also be combined to meet the activity test.
  • The hours of activity you undertake do not need to coincide with your child care hours, so you can use any weekend work or study to calculate your child care subsidy during the week.

What if I don’t meet the activity test? 

  • If your family earns $66,958 or less a year, and you do not meet the activity test, you will still be able to access up to 24 hours of subsided care per child per fortnight.
  • There will also be exemptions to the activity test for parents who legitimately cannot meet the activity requirements. For example, Grandparents who receive the pension or other support payments and families in receipt of special government support payments (e.g. income support, carers payment and widow pension).
  • Other activities that do not fall into the recognised activity categories will be assessed by the Government on a case-by-case basis. 

Can I still claim the Child Care Subsidy if I am on maternity, or other leave (either paid or unpaid)? 

Yes. If you undertake paid work and paid or unpaid parental leave is a condition of your employment then this is considered to be part of your paid work.
Your hours of activity will be the same as they were immediately prior to you commencing parental leave. 

Where can I learn more?

The Department of Education and Training hosted three Family Webcast Information Sessions to help families learn about the new subsidy.

Download information from the presentation. 

Read responses to the questions asked during the information sessions.