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It's official – the New Child Care Package has landed
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The government's overhaul to child care payments has come into effect, and as of 2 July, the Child Care Benefit and Child Care Rebate are no longer. Both have been replaced by the Child Care Subsidy, which means that your family may be receiving more (or less) financial support than before.
To herald in the new system, here's a quick reminder about what the New Child Care Package means for Australian families.
What is the Child Care Subsidy?
The single Child Care Subsidy is a key part of the New Child Care Package. It promises a simpler, more targeted system to benefit low and middle-income families.
And as well as basic requirements around Australian residency, immunisation and your child's age (they must be 13 or under), there are three factors that determine your family's eligibility for the Child Care Subsidy:
- Your combined family income
- The activity level of both parents
- The type of child care service you use
What does the Child Care Subsidy mean in dollar terms?
How much subsidy your family receives depends on your individual circumstances. There are sliding percentage rates based on income, parental activity determines the number of subsidised hours, and different types of child care services attract different hourly rate caps.
There has also been a change to the annual subsidy cap, meaning families earning $186,958 or less have no limit on how much Child Care Subsidy they can claim.
Centrelink's Payment and Service Finder is a useful subsidy estimator, but if you've completed the Child Care Subsidy assessment, then Centrelink will have confirmed your eligibility and exact entitlement by now.
Provided that you are eligible, the Child Care Subsidy is paid directly to your approved child care provider as a fee reduction, with your family paying the difference between the child care fee and the subsidy amount.
Has the transition to the new Child Care Subsidy happened automatically?
We're afraid not. The roll-over to the new system requires action from you, and before any subsidy is paid, you will need to have signed into your Centrelink account via myGov, and completed the Child Care Subsidy assessment. Alternatively, if you're a family using child care for the first time, you'll need to have claimed for the Child Care Subsidy.
What happens if you didn't enrol for the Child Care Subsidy before it came into effect?
If you haven't transitioned to the new system yet, then it pays to do so – literally.
Your Child Care Benefit and Child Care Rebate payments will have stopped on 1 July 2018, and your Child Care Subsidy won't be paid until you complete your assessment/claim.
The government says, 'Where families are late completing their assessment, Child Care Subsidy will be payable for the period 2 July to 23 September 2018 once families complete their Child Care Subsidy assessment and are assessed as eligible and entitled. Where applicable, entitlements will be paid to services retrospectively in arrears.'
It's important that you log on to myGov as soon as possible to keep your child care affordable.
What is the Additional Child Care Subsidy?
On top of the Child Care Subsidy, the government recognises that some families need extra help in meeting the costs of child care. To this end, the new Additional Child Care Subsidy is a top-up payment that aims to break down barriers and make care affordable for all.
Depending on individual circumstances, it may be paid to:
- Families needing 'practical help to support their child's safety and wellbeing'
- Grandparents providing substantial child care
- Families suffering temporary financial hardship
- Families moving into the workforce after being on income support
This subsidy is a key part of the Child Care Safety Net, which has been progressively rolled out to support vulnerable families.
Where can families get more information about the New Child Care Package?
It's out with the old system and in with the new, and if you'd like more detail about the changes to child care payments, then you can:
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