The Federal Government’s Child Care Subsidy (CCS) offers families access to fee reduction for a vital and much-needed service and is simpler than the older multi-payment plans. The new means tested subsidy has replaced Child Care Benefit (CCB) and Child Care Rebate (CCR).
How does it work?
Subsidies will be paid directly to SOEL and we pass them on to families in the form of fee reductions. Families will then pay the difference between their subsidy and the fees charged.
1. Combined Family Income
A family’s annual taxable income will determine the percentage of CCS they are eligible for. It is important to note that just like the the old system of CCB and CCR (Child Care Benefit and Child Care Rebate), there will always be a gap between the amount of subsidy available and the fees charged by any child care provider, and that the rate of CCS will also remain the same.
Annual CCS Cap
Families earning $188,163^ or less will have no cap on the amount of Child Care Subsidy they can claim. Families earning over $188,163^ and under $352,453^ will be capped at $10,373^ per child, per year.
|Combined annual family income||Annual subsidy cap per child|
|$188,163^ or less||No Cap|
|More than $188,163^ to less than $352,453^||$10,373^|
^ These amounts are correct for 2019/20 financial year and may be subject to adjustment through indexation in subsequent years.
2. Activity level of parents
The number of hours of subsidised care families can access, will be determined by an activity test. The higher the level of activity, the more hours of subsidised care families can access, up to a maximum of 100 hours per fortnight.
- Paid work (including leave, such as maternity leave)
- Study and training
- Unpaid work in family business
- Looking for work
- Other activities on a case-by-case basis
However, some of these activities will only be recognised for a certain amount of time. The government will only count:
- Periods of unpaid leave for up to 6 months – this doesn’t apply to unpaid parental leave
- Setting up a business for 6 months out of every 12 months
There will be exemptions for parents who legitimately cannot meet the activity test requirements, as well as to support children’s participation in preschool.
Hours of Activity Per Fortnight eligible for Child Care Subsidy
The parent or guardian with the lowest hours of activity per fortnight will determine the hours of subsidised care. The hours of subsidy per child, per fortnight are:
|Hours of Activity||Hours of Subsidy|
|8 to 16 hours||36 hours|
|16 to 48 hours||72 hours|
|Over 48 hours||100 hours|
Parents whose hours of paid work vary from one fortnight to the next (such as casual workers) can estimate their fortnightly hours of work based on a three-month period.
How does the activity test work?
The table above indicates how many hours of subsidy you will receive per hour of activity per fortnight. Families earning a combine income of $352,453^ or more are not eligible for any subsidy.
The great news is that a broad range of activities will meet the activity test requirements, including paid work, being self employed, or doing unpaid work in a family business. If you’re looking for work or volunteering or studying, you’ll still be able to satisfy the activity test. Importantly, those who genuinely cannot meet some eligibility requirements may be eligible for exemptions.
For the first time, activities such as studying, and volunteering also work in your favour towards your child care subsidy. Taking some extra time to follow your interests or develop some new skills, even from your home through online learning platforms like TAFE and university courses, will count as activity hours towards your subsidy. This is another way that CCS differs from the old Child Care Benefit and Child Care Rebate system.
3. Type of Child Care Service
An hourly rate cap will be calculated depending on the type of approved child care you use:
|Type of Childcare||Hourly Rate Cap|
|Centre Based Day Care||$11.98^|
|Family Day Care||$11.10|
|Outside School Hours Care – before, after and vacation care||$10.48|
|In Home Care||$32.58 per family|
^ Indexed each financial year.
A school aged child is one who is either:
- In school (including home-schooled children)
- 6 or older – The hourly rate cap for WA is $10.48.