How will the Child Care Subsidy changes affect you?

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On 2nd July 2018, the new Child Care Subsidy will be introduced, replacing the current Child Care Benefit and Child Care Rebate. If you currently receive child care payments for approved care, you’ll need to know how these changes affect you, because every family will be affected differently.

What is the Child Care Subsidy?

It’s a single, means-tested subsidy that will be paid directly to providers and passed on to you as a fee reduction. If you’re eligible, you will only pay the difference between the fee charged and the subsidy amount.

Firstly, to qualify, care must be delivered in Australia by an approved child care provider, and not be part of a compulsory education program

Why is it changing?

The new Child Care Subsidy is designed to reduce the complexity of child care payments. It will be:

  • Simpler than the current multi-payment system
  • Also better targeted and more helpful for low and middle income families

Will you be eligible?

That depends. Because it’s a means-tested subsidy, the government will look at your current circumstances to decide if you’re eligible. You will be assessed according to three factors:

  1. Combined family income – with more support for lower income families
  2. Your level of approved activity – time spent working, studying or volunteering etc.
  3. Your child care type – centre-based, family day care, outside school-hours etc

In addition, you and your child will need to satisfy some other basic requirements, including age, immunisation and residency requirements.

What happens next?

If you’re currently receiving either Child Care Benefit or the Child Care Rebate, Centrelink will write to you shortly asking for additional information. This information will help them assess your eligibility for the Subsidy.

The easiest way to provide this information is through your online Centrelink account through myGov. If you don’t have one, you may have to pay your child care fees in full from July.

For more information, also visit the Department of Education and Training website.