Raising a family can be a rewarding experience, but it can also be expensive. Find out how the new Child Care Subsidy could cut your family’s child care costs.

About the new subsidy

The new Child Care Subsidy was launched on 2 July 2018. The subsidy replaces both the Child Care Benefit and Child Care Rebate and was introduced to support parents who work, train, study and volunteer.

Who can get the subsidy?

The subsidy is only available to those who meet the below requirements.

  • Your child is aged 0-13 years and not attending secondary school1
  • Your child attends an approved child care provider
  • Your child meets immunisation requirements
  • You care for your child at least two nights per fortnight (or have 14% care)
  • You are the person responsible for paying the child care costs
  • You meet residency requirements

How is the subsidy calculated? 

The level of subsidy you receive will vary depending on the activity level of both parents per fortnight, the type of child care service you use and your family’s combined income. Let’s take a closer look at how each of them work.

Activity test
The hours of subsidised care a family can access is determined by the activity levels of both parents and is based on the parent with the lowest activity hours per fortnight. The maximum hours of subsidised care a family can receive per child per fortnight is 100 hours.

If your hours of paid work change each fortnight (e.g. in the case of casual work), you can estimate your hours of work based on a three-month period.

Recognised activities include:

  • Paid work
  • Self-employment
  • Paid or unpaid leave (including parental leave)
  • Unpaid work in a family business
  • Unpaid work experience or internship
  • Actively looking for work
  • Study and training
  • Volunteering
  • Other activities on a case-by-case basis

The tables below show the maximum hours of subsidy per fortnight that you can receive based on the activity level for the parent with the lowest activity hours.

Child Care Safety Net
Low income families with incomes of $66,958 or less a year who do not meet the activity test (have less than 8 hours of activity a fortnight) will be able to access 24 hours of subsidised care for each child per fortnight. This will be provided at the highest rate of subsidy.

Type of child care service
Your subsidy per hour is calculated based on the type of child care service you use. The below hourly rate caps are applied to each hour of subsidy you are entitled to.

  • $11.77 per hour for centre based day care (long day care and occasional care).
  • $10.90 per hour for family day care.
  • $10.29 per hour for outside school hours care (before, after and vacation care).
  • $25.48 per hour per family for in home care.

Please note, the Child Care Subsidy rate will apply to the lower of the hourly fee you are charged by your child care provider and the applicable maximum hourly rate cap.

Combined family income
Your family’s annual adjusted taxable income determines your subsidy rate (the percentage of the Child Care Subsidy you are eligible for).

 

                                     

Is there a limit on the subsidy?

There is an annual maximum (cap) per child that you can receive as a subsidy depending on your family’s income.

If your family earns a combined income of more than $186,958 and less than $351,248 the annual per child subsidy cap that you can receive has increased from $7,613 to $10,190. There is no cap if your family’s combined income is $186,958 or less.

How do I claim the subsidy?

Transferring from the Child Care Benefit and Child Care Rebate to the Child Care Subsidy is not an automatic process.

If you have not already done so, you need to complete the ‘Child Care Subsidy Assessment’ using your online Centrelink account through myGov. The Child Care Subsidy will not be paid to your approved child care provider until you have completed the assessment.

Visit education.gov.au/childcare for more information about the Child Care Subsidy and to estimate what your subsidy might be.

 


1 Exemptions may apply, for example, where your child has a disability.

2 Income levels are correct for the 2018/19 financial year and may be adjusted through indexation in future years.

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