How the New Child Care Benefits Work

The new Child Care Subsidy (CCS) took effect last July 2, 2018, replacing the Child Care Benefit and Child Care Rebate programs. This new system intends to increase the subsidy given to those on the lower income brackets and make it easier for families to gain access to childcare services. In addition to this, the government has injected a $1.2 billion budget to fund the Child Care Safety Net that aims to support the disadvantaged children who often live in remote communities.


Changes in the New System


With the implementation of the new CCS, three things will determine the level of subsidy a family can receive:

1)      Family income

2)      Activity level displayed by both parents

3)      Type of childcare service availed

You have to compute each of these components in filing for a subsidy.

Family income

In line with the government’s goal to provide greater discounts to those with low household income, the subsidy cap has been restructured to reflect the CCS percentage a family is entitled to. Parents with annual family income amounting to $65,710 and below get the greatest subsidy rate at 85% of their expenses. On the contrary, those with household income amounting to $350,000 and more are ineligible to receive child care subsidy.

The past child care plan enforces a $7,500 subsidy cap per child. The new CCS changed this according to the family’s overall household income.

-          Annual income less than $186,958 have no cap

-          Annual income greater than $186,958 but less than $351,248 has a $10,190 cap

-          Annual income greater than $351,248 are ineligible to apply for a subsidy

It can be seen here how the government shifted the benefits of the child care plan in favour of families with lower household income.


Activity level


The computation of subsidy in the new CCS also considers the activity level of the parents. This refers to the number of hours you work per fortnight.

Hours of activity

Maximum hours of subsidy

Less than 8 hours

24 hours

8 to 16 hours

36 hours

16 hours to 48 hours

72 hours

48 hours or more

100 hours

Fig. 2. Activity level under the new CCS (Source: SBS News)

The following activities that are counted under the new CCS rules include:

-          Paid work including the unpaid hours during lunch break.

-          The time it takes to set up a business.

-          The time it takes to get from the child care centre to your office. The time it takes to get from your home to the centre cannot be included here.

-          Authorised leave from work.

-          Unpaid leave up to a maximum of 6 months.

-          Internships (paid or unpaid).

-          Volunteer work.

-          The time it takes when you’re looking for work. The hours spent on job hunting, internet research, and travel time in attending interviews are some of the acceptable activities under this category.

If both parents are involved, the one with the least hours of activity between the two is the one considered when filing for a subsidy. So, for example, one parent works 40 hours per fortnight while the other works for 56 hours, the lesser 40 hours will be the one counted. Looking at Figure 2, this amounts to a maximum of 72 hours of subsidized child care every fortnight.


Child Care Service


The type of childcare service you provide to your children also plays a part in the subsidy computation.

Service type

Max hourly fee

Centre-based service (e.g. day care)


Family day care


Child care done outside of school hours


Fig. 3. CCS per service type (Source: Department of Education and Training)

If your household income is $65,000 per year, you get the 85% rebate based on Figure 1. If you’re availing a centre-based service that charges $10.00 per hour, compute 85% of that to get the amount subsidized under the CCS. Using these values, you’ll get $8.50 (85% of $10.00). Subtracting this amount from the hourly fee of the centre which is $10.00, what you’ll be paying after the rebate will only amount to $1.50 per hour.


What You Need to Do


The computation of benefits have changed but the requirements for the program remain the same. You must satisfy the following requirements to be eligible to receive the benefits under the new Child Care Subsidy plan.

-          The child should be 13 years old or younger and is not attending any secondary school

-          The child must have completed the immunisation requirements

-          You or your partner must meet the residency requirements

-          You’re using an approved provider of child care services

-          You must be the one responsible for paying the fees for child care services

You must update your details and sign up to the new CCS system through the myGov website. You should provide an estimate of your household income for the incoming fiscal year 2018-2019. You should also identify your activity level as a parent as well as the child care service your kid is currently enrolled in.

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