Changes To The Child Care Rebate
May 2, 2018
If you currently receive the Child Care Benefit or the Child Care Rebate, then you’ve probably already been contacted about the changes and reminded to submit the online form via Centrelink or myGov before the July 2 deadline to ensure that there’s no disruption to your payments.
The current system features two subsidies, the Child Care Benefit and Child Care Rebate, but will be put aside in favour of a single means-and-activity-tested subsidy called the ‘Child Care Subsidy’.
The Child Care Subsidy will be paid directly to service providers before being passed on the families as a fee reduction. The new system is likely to affect both the eligibility and rate of payment for the families currently receiving a benefit.
Your family’s eligibility will depend on a few things. Firstly, the age of your child – they must be 13 years or under and NOT attending secondary school. As under the previous system, your kids must meet the immunisation requirements, while you or your partner also meet residency requirements.
If you qualify the rate of your subsidy will depend on the next 3 things:
1. Activity Test
If you are in a two-parent family, your family will only be eligible for a subsidy if both parents work, study or volunteer for a minimum of 8 hours per fortnight. Families with recognised activities for:
- 8-16 hours per fortnight are eligible to receive 36 hours per fortnight of subsidised care
- 16-48 hours per fortnight are eligible to receive 72 hours per fortnight of subsidised care
- More than 48 hours per fortnight are eligible to receive 100 hours per fortnight of subsidised care
2. Combined Family Income
The percentage of childcare fees your family is eligible to be subsidised for will be determined by a grading system that examines your family’s combined annual income:
- Families on $65,710 or less will receive a payment equivalent to 85%of their fees
- Families on $65,710 – $170,710 will receive a payment that is tapered down from 85% to 50%, receiving 1% less for every $3000
- Families on $170, 710 – $250,000 will receive a payment equivalent to 50% of their fees
- Families on $250,000 – $340,000 will receive a payment that is tapered down from 50% to 20%, receiving 1% less for every $3000
- Families on $340,000 – $350,000 will receive a payment equivalent to 20% of their fees
- Families earning more than $350,000 will receive no subsidy
The combined family income will also determine whether your subsidy will hit a yearly cap. If your family earns below $186,958, then there will be no limit of their accessible subsidy. For higher earning families, the annual cap will increase under the new system to $10,190 per child.
3. Service Type
When the subsidy commences in July 2018, the hourly rate caps will be:
| Service Type | Maximum hourly rate cap |
| Centre Based Day Care (Long Day Care and Occasional Care) | $11.77^ |
| Family Day Care | $10.90^ |
| Outside School Hours Care (Before, After, and Vacation care) | $10.29^ |
| In Home Care | $25.48^ (per family) |
For more information regarding the changes, visit the Government’s Education website to read about the changes:
This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances. While The Field Group believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the corporations Act 2001.