New child care package subsidy starts in July

Changes: From July 2, the Child Care Rebate and Child Care Benefit will be replaced by one Child Care Subsidy.
Changes: From July 2, the Child Care Rebate and Child Care Benefit will be replaced by one Child Care Subsidy.

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If you have children in or about to start child care take note, Australia's child care fee assistance is changing. From July 2, the Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy. 

The Government has committed an extra $2.5 billion to support the implementation of the new child care package. 

The 2014 Productivity Commission Inquiry into Childcare and Early Childhood Learning and a series of consultations since, found that the current child care system is complex, difficult for families to use and inflexible in meeting their needs. 

In response, the Government announced a package of reforms to help families meet work requirements and to provide more targeted support for disadvantaged and vulnerable families and children. 

Three things will determine a family’s level of Child Care Subsidy:

  1. Combined family income
  2. Activity level of both parents (based on the parent who does the least amount of recognised activity)
  3. The type of child care service families use.

Most lower and middle-income families will be eligible to receive a higher subsidy for their child care than they do now. 

The lower the combined family income, the more support families will receive.

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.

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In families with two parents, the parent with the lowest hours of activity per fortnight will determine the hours of subsidised care.

Recognised activities include paid work, approved study or training, unpaid work in family business, looking for work, volunteering and self-employment. Other activities are included on a case-by-case basis.

The new subsidy is also based on the type of child care a family uses subject to an hourly cap rate:

  • Centre-based care: $11.55 per hour
  • Family day care: $10.70 per hour
  • Outside school hours care: $10.10 per hour

The new Child Care Subsidy will be paid directly to child care providers to pass on to families as reduced fees.

The new child care package includes a Safety Net to ensure that children in Australia’s most vulnerable families and communities have the opportunity to access quality early learning and child care. 

It better supports:

  • Families who need practical help to support their children's safety and wellbeing
  • Grandparents as principal carers on income support
  • Families experiencing temporary financial hardship
  • Parents transitioning to work from income support.

See how the changes affect you visit Here you can use the estimator to get an idea of how much subsidy you may be eligible for.