Child Care Subsidy

From 2 July 2018, the Federal Government is introducing a new Child Care Package that will bring more support to more families across Australia.

The package will replace the Child Care Benefit and the Child Care Rebate with a single, means-tested Child Care Subsidy.

The new subsidy will be much more generous for low and middle income families, but less generous for very high income families (defined as having a household income above $351,248 pa).
 
Each family could be affected differently by the new package. To find out how it may affect you, we’ve developed a quick and easy tool that can provide you with an estimate of the subsidy you could expect to receive at your nearest Goodstart centre.


You can access the subsidy estimator here – it takes just a couple of minutes.


What should I know about the new Child Care Subsidy?

 

There are three key factors that will determine how much Child Care Subsidy families may receive:


Key facts about the new Child Care Subsidy
  • Families earning $66,958 or less will receive a subsidy of 85% of their child care fees (up to the rate cap of $11.77 per hour).

  • For families earning over $66,958 to under $171,958, the subsidy gradually tapers down from 85% to 50%, receiving 1% less for every $3000.

  • Families earning $171,958 to under $251,248 will receive a subsidy 50% of their fees.

  • For families earning $251,248 to under $341,248, the subsidy gradually tapers 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, while families on income $351,248 or more will receive no subsidy.

  • The annual cap has been abolished entirely for families with income less than $186,958 a year. For families earning more than $186,958 a year the cap will be lifted to $10,190 per child per year.

  • In two parent families, both parents must engage in recognised activity for at least 8 hours a fortnight to receive the subsidy (unless exempt).

  • Recognised activities include but are not limited to: paid work (including leave), approved study or training, actively seeking work, volunteering and self-employment.

  • Families can access up to a maximum of 100 hours of subsidised care per fortnight dependent on how much they are working, studying or doing other approved activity.

  • New hourly rate cap of $11.77 per hour subsidy will be introduced for centre-based care which the Government will use when determining your level of subsidy. However, your child care service may charge above or below this amount. The Government will use the lower amount to calculate any subsidy entitlement.  

  • In most cases, the subsidy will be paid directly to child care providers, in which case you only pay the difference between the fee charged by your service and the amount subsidised by the Government.

  • 5 per cent of your weekly Child Care Subsidy entitlement will be withheld by the government. Following reconciliation of your tax return at the end of the financial year, any amount owing to you will be paid as a lump sum by the government. If you have been paid too much Child Care Subsidy, you will have a debt to repay.

  • A new Additional Child Care Subsidy (ACCS) will replace the Special Child Care Benefit, JETCCFA and Grandparent Child Care Benefit. The ACCS provides a higher level of subsidy than the regular Child Care Subsidy, in recognition of the circumstances the child and/or family is facing.

  • 24 hours of subsidised care per fortnight will be available for children from families on a combined income less than $66,958 pa who do not meet the activity test requirements.