The Child Care Subsidy changes 2018

Child Care

This week on the blog we have Kylie Sharp from My Childcare Directory summarising the Child care changes occurring in 2018. Kylie is a wife and a mum to two gorgeous little boys who love cars, trains, dinosaurs and getting messy! Since having children she has been a working mum as well as a stay at home mum. In these times Kylie used multiple childcare settings. Kylie has dealt with the children’s tantrums and the guilt that they cause when you leave them! Kylie also has Bachelor of Teaching (Birth to 5 years) so understands how childcare services work.

The Childcare Directory was created to help parents like yourselves navigate all the options available. Kylie will investigate your options and provide reviews from current and past families that have used the services to help you with your decision. You can also follow Kylie on Facebook or visit her website here

Child Care Subsidy Changes: What You Need To Know

It has been announced that the current child care subsidies will be changing as of July 2nd 2018. Instead of the the Child Care Benefit and the Child Care Rebate, eligible families will now receive Child Care Subsidy and Additional Child Care Subsidy. Darwin Family Life has done the research and complied all the information you need to know right here!

If you have a child who has ever been in childcare, I am sure you understand the crazy costs involved! Sometimes it’s difficult to manage these costs on your own, which is why the Government offers subsidies to help families cover their childcare fees. Currently, these subsidies are the Child Care Benefit (CCB) and the Child Care Rebate (CCR).

What Changes Are Being Made?

Figuring out where you stand can often be a confusing process. There is lots of conflicting information out there! In order to help, we’ve broken down some of the main changes of the new subsidy system in as simple terms as possible!

Child Care Subsidy

First and foremost, the Government will be getting rid of the current system which consists of the Child Care Rebate (CCR) and the Child Care Benefit (CCB). A new system will be in implemented with a single means and activity tested subsidy, called the ‘Child Care Subsidy’. The new system will see payments made directly to service providers. Which will then be passed on to families, doing away with the previous multi-payment model.

Activity Test

The activity test will help determine how many hours of childcare per fortnight you will receive in subsidy. In in order to receive any subsidy at all, both parents are required to work, study or volunteer for a minimum of 8 hours a fortnight.

  • Families working 8 – 16 hours per fortnight are eligible to receive 36 hours per fortnight of subsidised care,
  • For families working 16 – 48 hours per fortnight are eligible to receive 72 hours per fortnight of subsidised care,
  • If your family works more than 48 hours per fortnight are eligible to receive 100 hours per fortnight of subsidised care.

Level Of Subsidy

There will also be a new grading system, which will determine what % of fees you are eligible to receive based on your annual income.

  • Families on $65,710 or less will receive a payment equivalent to 85% of their fees.
  • For 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.
  • If your family earns $250,000 – $340,000 you 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.
  • For families earning more than $350,000 will receive no subsidy.

Hourly Cap

It’s important to note that the above %’s are based on an hourly fee cap. You are only eligible to receive a % of the following hourly rates:

  • $11.55 for centre-based day care,
  • $10.70 for family day care,
  • $10.10 outside school hours care.

Anything paid above these rates will be out of pocket. For families earning $185,710 and under there will be no annual cap on your total yearly subsidy amount. For those earning more than this amount, it will be capped at $10,000 per year.

Additional Child Care Subsidy

A bonus subsidy, called ‘Additional Child Care Subsidy’ will be available for disadvantaged families. These include families who have children at risk of abuse or neglect, those experiencing temporary financial hardship and grandparent carers who are on welfare. The Additional Child Care Subsidy allows you to claim 100% of the actual fee charged (up to a max of 120% of the hourly fee cap) with up to 100 hours a fortnight.

How Will These Changes Affect Me?

These changes will occur on July 2nd 2018, as a result your payments may change alongside your eligibility. Overall, the changes should be positive for most families. The aim is to make the system more affordable, accessible and flexible. It will be much simpler than the current multi-payment system. The new system will be able to better target and to provide more assistance to low and middle income families.

The Government estimates that 816,000 families will be better off when the new subsidies are introduced. Approximately 128,000 families look to be receive less in subsidies.

Where to now?

It’s important that you factor in these new changes into your budget therefore you can anticipate your out of pocket child care expenses. Check out this online estimator. It is a great tool to help you figure out what subsidy you are likely to receive when these changes come into place! https://www.education.gov.au/sites/education/files/sch/est/index.html

In conclusion we hope this article has given you an overview and a better understanding of the new Child Care Subsidy changes due to be made in July 2018.

6 Comments

  1. Thank you so much. The Government like to write everything so complicated and make you more confused.

    You’ve put it in a way that is soo easy for anyone to read.

    Thank you again.

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