1. YOUR RATE OF SUBSIDY IS BASED ON YOUR COMBINED FAMILY INCOME
The percentage of subsidy you’ll be entitled to will be based on your combined annual income, with more financial support available if your family is on a lower income. If your combined family income is less than $185,710, the cap will be abolished on the amount of subsidy you can receive per child. And if your family has a combined income of between $185,710 and $350,000, the cap has been increased to $10,000 per child (the current rebate cap is $7,613).
2. THE NUMBER OF HOURS YOU CAN CLAIM IS BASED ON YOUR ‘APPROVED ACTIVITY’
As part of the new subsidy, the number of hours of subsidised care you’ll be entitled to per child will be based on your level of approved activity. Approved activities include, but are not limited to:
- paid work, including annual leave and long service leave
- paid parental leave, including both maternity and paternity leave
- being self-employed in your own business
- doing unpaid work in the family business
- training courses to improve your work skills or employment prospects
- an approved course of education or study
- volunteering
- actively looking for work.
Other activities that don’t fall into these categories will be assessed on a case-by-case basis.
3. THE MORE ACTIVITY YOU UNDERTAKE – THE MORE HOURS OF SUBSIDISED CARE YOU CAN CLAIM
The higher the amount of activity, the more hours of subsidised child care you may be able to access, up to 100 hours a fortnight, per child. This is good news for parents who are looking to return to work, accept an extra shift or take up a new activity, such as a training course. For example, if you work part-time and also study, both activities will be taken into account.
The hours of activity you undertake do not need to coincide with your child care hours. So if you work on the weekend, you can still use those hours to calculate child care subsidy during the week. If your family earns $65,710 or less a year, and you do not meet the activity test, you will still be able to access up to 24 hours of subsided care per child per fortnight.
4. THERE’S DIFFERENT RATE CAPS FOR DIFFERENT CARE TYPES
The hourly rate cap will help put downward pressure on fee increases. There are three main types of child care services and there is a different hourly rate cap for the subsidy depending on which you use:
Centre based care – $11.55 per hour.
Family Day Care – $10.70 per hour.
Outside school hours care – $10.10 per hour.
Example
The Wattle’s earn $65,000 per year and use a centre-based service, making them eligible for a subsidy of 85 per cent. If their childcare service charges $9.00 per hour, under the hourly rate cap for centre-based services of $11.55, they will be entitled to 85 per cent of the $9.00 which is $7.65. The family will then pay a gap fee of $1.35 per hour.
However, if the Wattle family’s childcare service charges $12.00 per hour, which is over the hourly rate cap of $11.55, they will receive 85 per cent of the hourly rate cap, which is $9.82. The family will therefore have a gap fee of $2.18 per hour.
5. YOU CAN USE THE ESTIMATOR TO FIND OUT WHAT YOUR NEW SUBSIDY MIGHT BE
Although the changes don’t come into effect until 2 July 2018, you can plan ahead using the estimator to find out how much subsidy you may receive. The estimator doesn’t record your details, so you can try different scenarios, such as working more or enrolling in part-time study, to see what’s right for your family.