Child Care Policy Revisions by The Federal Government

Are you ready for the New Childcare Subsidy Changes starting in July 2018?

Childcare provisions have always been a major concern for working parents given the fact that they largely determine the quality of growth and development of their kids in their absence. In order to make the most of childcare services available, it is essential to actually know the laws that govern such facilities. In its first parliament session after the elections recently, the government introduced a slew of amendments to the existing legislation regarding Child Care Rebate and Child Care Benefit under the Jobs for families childcare package in the constitution. The package will be enforced with effect from July 1, 2018. What is in it for you

  • Both Childcare Rebate and Childcare Custody will be duly dissolved and replaced with a single Childcare Subsidy.
  • The Childcare Subsidy is mean tested and will be calculated as a percentage of the family’s combined income.
  • For families with a combined income of up to $65,710, the Childcare subsidy would be determined at 85% of the actual fee charged. While the families having a combined income of more than $65,710 to below $170,710 would be eligible for a tapering subsidy percent up to 50%, those that earn a combined income between $170,710 and less than $250,000 would get a 50% subsidy. Families with combined income between $250,000 and $340,000 would qualify for a tapering subsidy to 20% and those that earn more than $340,000 will get a subsidy of 20%.
  • The Childcare Subsidy would be calculated on the basis of a system similar to the one that is used to determine the standard hourly rate of the existing Childcare Benefit. While the current standard hourly rate of the Childcare Benefit stands at $4.30 per hour, the Childcare Subsidy would be calculated via a fixed percentage of a predefined hourly fee cap.
  • While the maximum hourly fee cap for centre-based long day care is fixed at $11.55, the figure stands at $10.70 for regular family daycare. The maximum hourly fee cap for outside school hours care would be $10.10.
  • While the existing annual subsidy cap for families that have a combined income above $185,710 is $7,613, with the new system this figure would increase to $10,000.
  • Since all of the aforementioned rates have been adjusted to the Consumer Price Index or the CPI, they might be slightly higher when the Childcare Subsidy is enforced starting July 1, 2018.
  • For a parent to be eligible for procuring the Childcare Subsidy, they must be duly engaged in an ‘activity’ on the lines of paid work, unpaid work in a family business, any self-employed work, hunting for a job, pursuing studies or engaged in a volunteer work.
  • The Childcare Subsidy that you get would essentially be determined based on the number of hours a fortnight you spend in performing the ‘activity’ of your choice. That being said, if you spend anywhere between 8 hours to 16 hours in an activity in a fortnight, you will be eligible for a maximum of 36 hours of Childcare Subsidy per fortnight. If you put in more than 16 hours to 48 hours at the activity of your choice, you will be eligible for a maximum of 72 hours of Childcare Subsidy in a fortnight. And if you are working more than 48 hours a fortnight, you can procure a maximum Childcare subsidy of up to 100 hours. 

The Government websites that can be accessed are as follows:

The Verdict Analyzing the aforementioned figures, it can be safely said that the hours of activity per fortnight is typically associated the minimum number of hours defined in each bracket. That being said, if there is stay at home parent that puts in less than 8 hours of work engaging in the activity of their choice, the family will not be eligible for accessing any Childcare subsidy as such. However, if in case the overall income of the family equates to less than $65,710, the parents will be eligible for 24 hours worth of Childcare subsidy in a fortnight.

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2018-03-27T10:05:24+00:00