What every parent needs to know about the new childcare subsidy

The federal government has recently announced some important changes to the Child Care Subsidy, which it promises will leave the majority of Australians better off. Coming into effect 2 July 2018, the current childcare funding model is soon to be replaced with a single means and activity tested payment scheme.

In order to be eligible for the subsidy, parents must be working, studying, looking for work or volunteering for a minimum of eight hours a fortnight to receive the new payment. The amount of funding allocated to each family will be determined by the following three factors.

1. The family’s combined household earnings

• Families who earn up to $66,958 will receive an 85% subsidy
• Families who earn $66,958 to under $171,958, the subsidy will be gradually reduced to 50%
• Families who earn $171,958 to under $251,248, the subsidy will be 50%
• Families who earn $251,248 to under $341,248, the subsidy will be gradually reduced to 20%
• Families who earn $341,248 to under $351,248 the subsidy will be 20%
• Families who earn $351,248 will not be eligible to receive any subsidy

2. The activity level of the parents per fortnight

• Parents who both work 8 to 16 hours will receive 36 hours of subsidised childcare
• Parents who both work between 16 and 48 hours will receive 72 hours of subsidised childcare
• Parents who both work more than 48 hours will receive 100 hours of subsidised childcare

3. The type of care required

• Families with children who attend centre based day care will be entitled to a maximum hourly rate cap of $11.77
• Families with children who attend family day care will be entitled to a maximum hourly rate cap of $10.90
• Families with children who attend outside school hours care will be entitled to a maximum hourly rate cap of $10.29
• Families with children who receive in-home care will be entitled to a maximum hourly rate cap of $25.48 per family

According to the new scheme, work can constitute as a range of approved activities including paid work, annual leave, self-employment, unpaid work in a family business, an approved course of education, training or study, volunteering and actively looking for work.

Another important thing to note is that those currently receiving payments will not automatically be rolled in to the new system. Parents who haven’t already done so will need to log in to their online Centrelink account via MyGov and update their details to ensure they begin receiving payments as soon as the new program commences.

To find out more about what the new Child Care Subsidy system will mean for you and your family, visit the Department of Education and Training website. You can also visit the Goodstart Early Learning website for a helpful estimator to work out how much you could be entitled to under the new system.