The New Child Care Package

Get ready for the New Child Care Package
Important information for families

From 2 July 2018, the Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy. Below are some key facts to help keep families informed about the changes and what they need to do now to transition to the new system.

How will the new subsidy be determined?

How much Child Care Subsidy families may be entitled to will be determined by three key factors:

 Combined family income – how much families earn will determine the percentage of subsidy they may be entitled to.

 Level of recognised activity – this determines how many hours of subsidised care parents can claim. Activities include work, study and volunteering.

 The type of child care service used – the new subsidy will be calculated by an hourly rate cap, which will vary depending on whether families use centre based day care, family day care, outside school hours care or in-home care. Will child care be more affordable?

Child care under the new arrangements will be more affordable for most families.

 Families earning $186,958 or less will have no cap on the amount of Child Care Subsidy they can claim.

 Families earning more than $186,958 and less than $351,248 will see the existing annual cap rise from $7,613 to $10,190 per child, per year.

How does the activity test work?

The number of hours of subsidised child care that families will have access to per fortnight will be determined by an activity test. The more activity a family does, the more hours of subsidised care they can access, up to a maximum of 100 hours per fortnight for each child. Recognised activities include paid work (including maternity leave), self-employment, approved study or training, unpaid work in a family business, voluntary work, actively looking for work or setting up a business. There will be exemptions for parents who legitimately cannot meet the activity test requirements. The parent with the lowest hours of activity per fortnight will determine the hours of subsidised care. What are the hourly caps?

Combined with a family’s Child Care Subsidy percentage, the hourly rate caps will be used to calculate the amount of subsidy per hour a family is entitled to, subject to the type of child care service a family uses:

 Centre based day care – $11.77 per hour  Family day care – $10.90 per hour

 Outside school hours care – $10.29 per hour

 In home care – $25.48 per hour (per family).

Where a service charges less than the hourly rate cap, the family will receive their applicable percentage of the actual fee charged. Where a service charges more than the hourly rate cap, the family will receive their applicable percentage of the hourly rate cap.

How is the subsidy paid?

The new Child Care Subsidy will be paid directly to child care providers to pass on to families as reduced fees.

What do families need to do now?

Transitioning to the new Child Care Subsidy is not an automatic roll-over from the two current payments. Families must provide some new information and confirm their current details using their Centre link online account through myGov. Families may not receive child care fee assistance from 2 July 2018 if their assessment is not completed.

Families will be asked to confirm:

 their combined family income estimate for the 2018-19 financial year

 the hours of recognised activity including work, training, study and volunteering for each parent in the family

 the type of child care the family uses

 enrolment details for those children already using child care.

For more information on this process families should visit education.gov.au/childcare

Contacts

Please contact Cultural Partners on

02 8752 7688 for further information.

Ric Yamine – info@culturalpartners.com.au

Fiona Jones – fiona@culturalpartners.com.au