In our article, ‘A helping hand: Child care benefit and rebate’, we noted that there was an upcoming change to the Government’s current financial assistance payments provided to eligible families in recognition of the costs associated with child care. Namely, from 2 July 2018, the Child Care Benefit and Child Care Rebate will be replaced with a new financial assistance payment, the Child Care Subsidy.
Given the fast approaching date, we have provided you with an overview of the Child Care Subsidy regarding eligibility, payments and transitioning/claiming.
Child Care Subsidy
To be eligible for the Child Care Subsidy, certain general requirements must be satisfied. For example:
The Child Care Subsidy is paid directly to your approved child care provider to reduce the child care costs you pay. Furthermore, the level of Child Care Subsidy that you may be entitled to is assessed against several interconnected factors: combined family income; activity test (the activity level of parents); and, hourly rate cap applied in relation to the child care service type and age of your child.
1. Combined family income (your estimate for the 2018/19 financial year).
|Combined family income|
|Family income thresholds*||Child Care Subsidy percentage^|
|Up to $66,958||85%|
|Over $66,958 to under $171,958||85% – 50%#|
|$171,958 to under $251,248||50%|
|$251,248 to under $341,248||50% – 20%#|
|$341,248 to under $351,248||20%|
|$351,248 or more||0%|
*These thresholds may be subject to indexation in following years.
^The Child Care Subsidy percentage will apply to the lowest of: the hourly fee you’re charged by your approved child care provider; or, the applicable maximum hourly rate cap (discussed below).
#The Child Care Subsidy percentage reduces by 1% for every $3,000 of income your family earns.
2. Activity test, the activity level of parents (your estimate for the 2018/19 financial year).
|Activity level of parents|
|Hours of activity (per fortnight)*||Maximum hours of subsidy (per fortnight)|
|Families earning up to $66,958|
|No activity hours required||24 hours|
|Families earning up to $351,248|
|8 to 16 hours||36 hours|
|More than 16 to 48 hours||72 hours|
|More than 48 hours||100 hours|
*Recognised activities include things, such as paid work (including self-employment), paid or unpaid leave (including paid or unpaid parental leave), unpaid work experience or internship, study and training, unpaid work in a family business, actively looking for work or setting up a business, and unpaid volunteering.
^Part of the Child Care Safety Net (discussed below), namely, subsidised care for low-income families.
3. Hourly rate cap
|Hourly rate caps|
|Child care service type||
Maximum hourly rate cap
(Children below school age)
Maximum hourly rate cap
Centre based day care
(Long day care and occasional care)
|Outside school hours care||$11.77||$10.29|
Family day care
(Before, after, and vacation care)
|In home care||$25.48 (per family)||$25.48 (per family)|
*A school-aged child is a child who is: in school, including being home schooled; or, 6 years or older.
For families that currently receive the Child Care Benefit and Child Care Rebate, the transition to the Child Care Subsidy is not an automatic process. Prior to 2 July 2018, you will need to complete the ‘Child Care Subsidy Assessment’ task using your Centrelink online account through myGov. This will require you to provide some new information as well as confirm your current details.
Importantly, if your child is starting approved child care from July 2018, a similar process to the one listed above will need to be completed if you wish to claim assistance with child care fees.
Please note: If you do not complete the required assessment, the Child Care Subsidy will not be paid to your approved child care provider.
Child Care Safety Net (Additional Child Care Subsidy)
Depending on your circumstances, you may also be eligible for further financial assistance on top of the Child Care Subsidy via the Child Care Safety Net (Additional Child Care Subsidy). For example:
Please note: You can only receive one type of Additional Child Care Subsidy. If you meet the relevant criteria for more than one type, the most beneficial will be applied.
Financial assistance payments in recognition of the associated costs of child care can be important for eligible families, especially with regards to managing household expenditure and the consideration of returning to work after having children (e.g. help with making the transition back to work easier).
We hope you have found this article helpful in terms of highlighting the eligibility, payments and transitioning/claiming with regards to the Child Care Subsidy, which is due to commence from 2 July 2018.
Prior to 2 July 2018, if you would like to estimate your possible Child Care Subsidy entitlement, you can do so via Centrelink’s Payment and Service Finder.