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Families are being reminded to switch to the new child care system or risk losing thousands of dollars in subsidies.

More than 670,000 families have already made the move, but the government estimates 490,000 still haven’t updated their details, shares 9 news.

The changes take effect from July 2.

Read more – What Parents Need To Do ASAP To Keep Getting Childcare Payments

MANY working parents will soon be able to get more subsidised child care

The childcare package will allow a family earning less than $65,000 a year to have 85 per cent of their child care bills paid for by taxpayers.

But parents will have to work, study or volunteer for at least eight hours a fortnight to get the maximum benefit, shares news.com.au.

Work, Study Or Volunteer

Families currently get 24 hours of subsidised care regardless of whether they work but this will be cut to 12 hours, and will only be available to those earning less than $65,710 a year.

There were also safeguards allowing children from disadvantaged homes to be eligible for fully subsidised full-time attendance of 50 hours per week.

Both parents have to work to satisfy the activity test for the new subsidy. Both have to work, study or volunteer for at least eight hours a fortnight. If you don’t work enough, you will still get 12 hours of child care if you earn less than $65,710.

If your family’s income is more than $65,710 but you don’t meet the activity test, you don’t get any child care subsidy.

How Much Do You Earn?

For families earning $65,710 or less, you will have 85 per cent of your child care fees covered by the government.

The subsidy gradually tapers down to 50 per cent once you are earning $170,710.

If your family income is great than $350,000, the rebate becomes zero.

The Child Care Rebate (which currently covers 50 per cent of child care fees up to an annual cap of $7,500) and the means-tested Child Care Benefit will be replaced with the new subsidy.

No Cap

There is no annual cap on subsidies for families on $185,710 and under and for those earning more than $185,710 they will only be able to claim $10,000 per child (as opposed to $7,500 under the current scheme).

Summary

In a nutshell, there are three issues that contribute to how much you will be paying for child care:

1) How much you earn as a family – the more you earn the less rebate you will get.

2) The number of hours you work – the more hours you work, the more subsidy you will get

3) The set hourly rate ofchild care – so if your childcare is more expensive than the government set rate, you will be paying a much higher excess to cover daily fees. Daycare fee subsidies are based on a set hourly rate ($11.55 centre-based day care, $10.70 family day care, $10.10 outside school hours care).

The new scheme will begin on July 2, 2018.

To work out what you’ll be entitled to, there is a Family Child Care Subsidy Estimator available online.

Will this have a negative or positive impact on your family?

Share your comments below

 

  • Even remembering to switch and update is no guarantee you’ll be better off. My son and daughter in law ended up worse off financially after updating derails

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  • Just an update……my daughter in law was going to drop one day a fortnight at work so her income dropped so that the rebate stayed the same. She will be starting a new job in a week, all school holidays off and a pay drop. So good that she will get to spend all school holidays with her little boy, good that her childcare rebate will still be ok, not do good she has a pay drop

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  • Thank you for the reminder, cheers.

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  • This was advertised as bring more help to working families. Yet when my son and daughter in law updated their details, which haven’t changed in the 2 1/2 years my grandson has been alive for, they will now be paying more for the same amount of childcare. They will be financially better off if my daughter drops one day a fortnight of work to stay home and look their little boy. Makes me wonder what govt is thinking when they bring in ‘new and improved’ entitlements

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  • Awesome this reminds me that I have to do mine, on my to do list.

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  • Done – I hate Centrelink forms, but they do have a responsibility to ensure people are eligible.

    Reply

  • They either make it too expensive or too complicated so people just don’t bother.

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  • Thanks for the information I didn’t even know about this

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  • Good information for those it impacts.

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  • Time will tell how exactly this impacts us.

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  • No child care benefit for us anymore :(

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  • This will be my first year claimbing child care. Will be interesting to see how much we actually get back!!

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  • I wonder how it will work out financially for families with 6 or more children that currently get a higher income from Centrelink +concessions than they would if one of the parents worked.

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  • if the estimator is correct we will be $120 a fortnight worse off?? which doesn’t seem right as we are low income, if I work/earn more (currently work between 7 – 13 hrs a week) we would be worse off and would have to put our older child in Before School Care, which just compounds the costs, before I get concerned, I’m just going to wait and see what happens

    Reply

  • With six kids I find it also easier to stay home. You are a great mum, Ellen! :-)

    Reply

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