Understanding the Child Care Subsidy and How It Is Calculated

Child care subsidies are one of the most important ways that the government provides assistance to families to pay for qualified care for their children. The reduced cost of child care makes it more accessible to families who could otherwise not afford to send their children. Learn more about this programme and the requirements of eligibility.

What Is the Child Care Subsidy?

The Child Care Subsidy, or CCS, is the government programme that has been put in place to allow the Australian government to assist families who pay for child care. 

Under the CCS, the child care provider receives the government subsidy directly and then reduces the fee charged to families by the amount provided by the government. The family is only responsible to pay the difference between the child care service’s fees and their approved subsidy amount. Providers need to be approved to receive the subsidies under the Family Assistance Law. 

It’s important to know what amount you will be expected to cover out of pocket so you can plan your finances and budget accordingly. Use this child care subsidy calculator to quickly estimate your costs. 

Eligibility Requirements

There are eligibility requirements for the parents and children to meet before they can receive a subsidy.

Parents must care for the child two nights or more out of every fortnight. They also need to have at least 14 % of the child’s total care responsibility or receive a Family Tax Benefit for the child. Other parental eligibility considerations include residency and paying at least a portion of the fees for a qualified child care service.

Children must be immunised according to government requirements. They also need to be 13 years of age or under and not attend secondary school. There are certain exemptions from the last two requirements. 

It is possible to still receive the subsidy if the child is absent from the care service for up to 42 days each year. Additional absences may be available in certain case-by-case situations. 

Calculation Criteria

You can discover your estimated Child Care Subsidy and the out-of-pocket amount by entering a few pieces of information into a subsidy calculator. Eligibility and subsidy amount is determined by three criteria:

  • Combined family income
  • Activity level
  • The type of child care service used

The maximum subsidy that a child can receive is 85 %. This is for households that have a lower total income of up to $70,015 per year. Families that earn between $344,305 and $354,305 can receive a 20 % subsidy. There are additional steps in between these highest and lowest amounts. 

Activity level refers to the parent’s participation in qualified activities. These include paid work or leave, unpaid work within a family-owned business, study or training programmes, internships, volunteer work, setting up a business, and actively looking for employment. 

More hours of activity result in more hours of child care that can be subsidised per child. Activity under eight hours per fortnight earns 24 hours for households that make $70.015 or less, and zero hours for earners over this amount. More than 48 hours of activity earns 100 hours per child. per fortnight.

The final criteria consider the type of child care that is used. There are four types of care services that are eligible for the Child Care Subsidy:

  • Daycare received in a designated care centre
  • Daycare provided in the family home of an educator
  • Outside school hours is care that a child receives before and after normal school hours, as well as during school holidays.
  • In-home care is when an educator provides services to the child in their own home. This service is reserved for families that can’t access the other forms of care. 

When you are looking for a child care centre for your children to attend, ask questions before you complete the enrollment to find out if the centre is eligible for government subsidies. 

Once you understand how the Child Care Subsidy works, you can determine what type of care is best for your child and estimate the amount of assistance that you will receive. This helps you to plan and prepare so there are no financial surprises and you can find the right services for your children. 

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