How Will the Child Care Subsidy Affect Your Family

How Will the Child Care Subsidy Affect Your Family

“From July 2, 2018, the government is abolishing the Child Care Rebate and Child Care Benefit. The two payments will be replaced with a single payment, the Child Care Subsidy.

The government is billing this as a boost to childcare and with some justification since total federal spending on childcare will go up by $2.5 billion. All the same, there'll be winners and losers so it's important to look at how the new system will affect your family specifically”.

Three things will determine how much a family receives:

  1. The combined family income
  2. How much the parents work, based on the activity of the parent who works least
  3. The type of childcare service the family uses

The biggest impact will be on those families who earn more than $186,958 per year. Under the new system, families earning under this amount will have no cap on the amount of Child Care Subsidy they receive. Families earning above that threshold but below $350,000 will be capped at $10,000 a year. They will also lose their 50% rebate which will gradually be reduced to 0% when combined earnings reach over $351,248. So currently, if the cost was $120 per day they would receive 50% rebate, therefore out of pocket costs $60 per day. If combined income reaches the maximum threshold of $351,248 then, going forward, they will not receive any rebate and their cost will be $120/child/day.

This table shows the percentage of child care fees the Government will contribute based on a family's combined income:

To estimate your entitlement to the new child care subsidy, use the online calculator via the Centrelink/Human Services payment and services finder here.

For more information you can also visit the following website: https://www.education.gov.au/child-care-subsidy-combined-family-income-0

If you have any concerns how this may affect you please give us a call on 02 4926 5299

*Illawarra Mercury

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