As of 2 July 2018, the government has transitioned from the Child Care Benefit (CCB) and the Child Care Rebate (CCR) to a single Child Care Subsidy (and additional Child Care Subsidy if needed). This new Child Care subsidy will be a single means and activity tested subsidy that will be paid directly to the child care service providers, thereby getting rid of the old multi-payment model.
The new system will have various metrics to determine how much of your child care costs will be subsidised.
- Combined Family Income
- Activity Test – the activity level of both parents
- Service Type – type of child care service
Combined Family Income
A new grading system has also been created to help determine what percentage of fees you are eligible to receive based on your annual income.
- Families on $65,710 or less will receive a payment equivalent to 85 percent of their fees
- Families on $65,710 – $170,710 will receive a payment that is gradually reducing from 85 percent to 50 percent, receiving one percent less for every $3000
- Families on $170,710 – $250,000 will receive a payment equivalent to 50 percent of their fees
- Families on $250,000 – $340,000 will receive a payment that is gradually reducing from 50 percent to 20 percent, receiving 1 percent less for every $3000
- Families on $340,000 – $350,000 will receive a payment equivalent to 20 percent of their fees
- Families earning more than $350,000 will receive no subsidy
The activity test will determine how many hours of child care per fortnight will be subsidised. Subsidies can only be granted to families with both parents working, studying or volunteering for a minimum of 8 hours per fortnight.
- Families working 8 – 16 hours per fortnight are eligible to receive 36 hours per fortnight of subsidised care
- Families working 16 – 48 hours per fortnight are eligible to receive 72 hours per fortnight of subsidised care
- Families working more than 48 hours per fortnight are eligible to receive 100 hours per fortnight of subsidised care
Travel time from the child’s child care centre to the parent’s work place is also a factor when it comes to activity time. For instance, if our Narellan Vale daycare centre is a good amount of time away from your workplace (e.g. an hour’s drive away), that will also entitle you to receiving a larger subsidy for your child’s child care.
Subsidies are also subject to an hourly fee cap. Families may only receive a percentage of the following hourly rates:
- $11.55 for centre-based day care
- $10.70 for family day care
- $10.10 outside school hours care
Any amount above these rates will be paid out of pocket.
Families with an annual income of $185,710 and under will not be subjected to an annual cap on their total yearly subsidy. Any annual income exceeding this will receive a $10,000 cap per year.
Additional Child Care Subsidy
An additional subsidy may be granted for disadvantaged families. These include families who have children at risk of abuse or neglect, those experiencing temporary financial hardship and grandparent carers who are on welfare. The Additional Child Care Subsidy subsidies 100% of the actual fee charged (up to a max of 120 percent of the hourly fee cap) with up to 100 hours a fortnight.
Changes to Expect
It is possible for your payment to change as well as your eligibility for a subsidy. The new Child Care Subsidy aims to make child care more affordable and accessible for all families, so this change will be a good thing! The new streamlined system is not only easier to understand but quicker to implement and benefit from in the long run. It will also be better at providing assistance for low and middle income families.
If you want to know more about your eligibility, you can use this calculator!
Little Zak’s Academy is dedicated to helping you give your child their best start in life. We are committed to working closely with the Australian government so that you can get the most out of your Child Care Subsidy. Find out more about how we can help you by contacting our various child care centres in Sydney.