Child Care Subsidy in Australia

Changes to the Child Care Subsidy in Australia – What do you need to know?

Do you know about the Australian government’s current Child Care Benefit (CCB) and Child Care Rebate (CCR)? They were a couple of key ways families in Australia can get some help towards paying for costly child care…

Child Care Benefit and Child Care Rebate (Old System)– The Australian Government provides families with two types of financial assistance to help cover the costs of approved child care – the Child Care Benefit and the Child Care Rebate. It is important to remember that while Child Care Benefit is based on family income, the Child Care Rebate is not income tested.

Child Care Benefit

The Child Care Benefit was income tested and was usually paid directly to approved child care services to reduce the fees that eligible families pay.

Child Care Rebate

An additional payment to the Child Care Benefit in the old system was the Child Care Rebate. The Rebate helped families cover the out-of-pocket costs of child care and it was not income tested. Even if the family income was too high to receive the Child Care Benefit, a person would have been eligible for the Child Care Rebate. It covered up to 50 per cent of out-of-pocket costs. The annual limit for 2017-18 was $7,613 per child.

…And the system underwent a sweeping change at the beginning of July 2018.

To know more about Welfare Payments and waiting periods for new migrants see my earlier post – Welfare Payments

Child Care Subsidy

In essence, the government made the system simpler – which is good news for everyone! The CCB and CCR payments were replaced by a single, means-tested Child Care Subsidy (CCS).

Under the old system, CCB and CCR would be refunded to you after receiving the care. But now, CCS is paid directly to the provider, who will pass it on to you in exchange for a handy fee reduction!

In most cases, you’ll simply pay a ‘gap’ – the difference between the normal fee and the subsidy you’re entitled to.

What else is new?

Gone completely for those earning less than $186,000 is the annual cap. In the past, the cap meant that families reached the limit of child care subsidy mid-year and then struggled to pay their doubled bills.

There is also an activity test for families that have parents who don’t work. Basically, parents need to be working, on maternity leave, studying, volunteering or looking for work.  Activity Test

What do you need to do?

To check eligibility and to claim this subsidy using your Centrelink online account through myGov.

Basically, to be eligible, you must:

* Have a child under 13 who is not iin high school
* Use approved child care
* Meet residency and immunisation requirements.

And if you were already on the system prior to July 1 2018, you would have got a letter from Centrelink telling you what to do.

If you did your assessment with your online account, head to the same service to see if your assessment notice has been completed.

Haven’t done your assessment yet? You still can!

If you wait too long, Centrelink will make you start from the beginning with a new claim, and until it’s assessed, you’ll face full fees for your childcare.

Do your Child Care Subsidy assessment here – Assessment

What else do you need to know?

Means test – Your family income will determine the amount of subsidy you receive. Means Testing


Suitable care – Search for suitable child care near you by using the MyChild website

Compliance – To ensure only those who need the subsidy actually receive it, the government is serious about compliance. Read More

Additional Resources

Mychild – Child Care Subsidy


MIGRANT NINJA TIP – Child Care Subsidy – activity test

The activity test is one of the three factors that determines the amount of Child Care Subsidy a family is entitled to. The number of hours of subsidised child care that families have access to per fortnight is determined by a three-step activity test.

In two-parent families both parents, unless exempt, must meet the activity test. In the case where both parents meet different steps of the activity test, the parent with the lowest entitlement determines the hours of subsidised care for the child.

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