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Simple guide to the child care benefit changes


By now you’re probably aware that the Government is making some major changes to the child care benefits families receive. From 2 July 2018, the existing Child Care Rebate and Child Care Benefit will be replaced by the Child Care Subsidy. Read on to find out how it impacts your family and what you need to do to receive the new benefit.

How is the subsidy calculated?

The amount of Child Care Subsidy your family will receive will depend on three things: combined family income, an activity test and the type of child care service (see below for more detail).

There is no cap on the amount of the subsidy that families earning $186,958 or less can claim. For families earning between $186,958 – $351,248 there is an increase in the current cap of $7,613 to $10,190 per child, per year.

1. Combined family income

The percentage of subsidy you are eligible is based on your family’s annual adjusted taxable income.

If your family earns:

  • Less than $66,958, you are eligible to receive 85% of the subsidy
  • Between $66,959 – $171,958, you are eligible to receive between 85 – 50% of the subsidy
  • Between $171,959 – $251,248, you are eligible to receive 50% of the subsidy
  • Between $251,249 – $341,248, you are eligible to receive between 50 – 20% of the subsidy
  • Between $341,249 – $351, 248, you are eligible to receive 20% of the subsidy
  • More than $351,249, you miss out on any subsidy

2.  Activity test

The number of hours of subsidised care is based on the number of hours of activity you do.

‘Activity’ is defined as one, or a combination, of the following:

  • Paid work
  • Study and training
  • Unpaid work in a family business
  • Looking for work
  • Volunteering
  • Self-employment

If your fortnightly activity is:

  • Between 8 – 16 hours, you are eligible to a maximum of 36 hours of subsidy per child per fortnight
  • Between 16 – 48 hours, you are eligible to a maximum of 72 hours of subsidy per child per fortnight
  • More than 48 hours, you are eligible to a maximum of 100 hours of subsidy per child per fortnight

Note these hours of activity do not need to coincide with the child care hours used.

There is an exemption if you earn less than $66,958 a year and do not meet the activity test where you will be able to access 24 hours of subsided care per child per fortnight, as part of the Child Care Safety Net.

3.  The type of child care service

The maximum hourly rate the Government will subsidise is based on the type of childcare service.

The maximum hourly rate caps are:

  • $11.77 per child for a centre based day care (long day care and occasional care)
  • $10.90 per child for a family day care
  • $10.29 per child for outside of school hours care (i.e. before and after school care and vacation care)
  • $25.48 per family for in home care

How will it affect my family?

The new Child Care Subsidy will affect different households with varying impacts.  To see what subsidy you will receive so you can prepare and budget for the changes, visit the Family Child Care Subsidy Estimator.

Modelling carried out by Hai Anh La and Jinjing Li of The Institute for Governance and Policy Analysis (IGPA) at the University of Canberra reveals that full-time working parents become better off regardless of their income level under $310,000 for two-parent families, $320,000 for single parents with a non-school aged child and $180,000 for single parents with a school-aged child.

Those in the middle-income group are expected to gain most from the new scheme. In some cases where the child care costs deviate a lot from the national average, part-time working parents with low or average wages who are sending their kids into part-time care could become worse off under the new scheme.

What do I need to do?

To ensure you receive the new Child Care Subsidy, it’s important that you complete an online Child Care Subsidy assessment using your Centrelink online account through MyGov before 2 July 2018. Note that if you do not complete your assessment before this date, you may not receive any child care fee assistance.


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Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

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