As we settle into a new year, many of us are trying to wrap our heads around the new Child Care Subsidy that is starting on July 2. With so many questions, we found out from Simon Birmingham, The Minister for Education and Training, what it will mean for you. The useful insights, tools and links provided will help you understand the changes and what you will likely be able to receive.
With Christmas a distant memory and summer now in full swing, parents across Australia are readying themselves for the challenge that is ‘back to school’ season. From last-minute dashes to the supermarket, to preparing a seemingly endless pile of uniforms and stationery lists, January and February present some exciting, but daunting challenges for mums and dads.
But aside from the mountain of preparation, the back to school period provides a great opportunity for families to organise and plan their yearly finances, including arranging outside school hours care arrangements for their kids.
For those families working long hours or dedicating their time to other important commitments such as studying or volunteering, outside school hours care is a vital service that supports both children and parents alike. These services provide stimulating, educational activities for the kids and provide a sense of security for parents who may need those extra hours to complete their activities for the day.
The Government recognises that working families with children need more support. That’s why on 2 July 2018, we’re introducing a new Child Care Package that will bring more support to more families across Australia. The new Child Care Package includes increased support for outside school hours care, so parents should get more information and start to plan their child care arrangements for the year now.
Under the new Child Care Package, the current Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy. The new subsidy will be paid directly to child care providers and parents will only be required to pay the difference.
There are three key factors that will determine how much Child Care Subsidy families may receive:
- Your combined family income – how much your family earns will determine the percentage of subsidy you are eligible for.
- Your activity level – parents must undertake a recognised activity to be eligible for the subsidy, and
- The type of child care service your family uses – the new subsidy will be calculated by an hourly rate cap, which vary depending on whether you use centre-based care, family day care or outside school hours care.
For families earning $185,710^ or under per year, the current annual cap of $7,613 will no longer exist, meaning that parents don’t need to be concerned about hitting the cap before the end of the financial year. For families earning more than this (up to $350,000^), the annual cap will be increased to $10,000^ per child, per year.
While parents don’t need to do anything just yet, back to school is a great time to start planning financially for the year for when these changes come into play. Visit the online estimator to find out how much Child Care Subsidy you may be able to receive.
^ These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.
Simon Birmingham has served as a Liberal Party Senator for South Australia since May 2007 and in September 2015 was appointed as Minister for Education and Training. He has two young daughters and his family have been part of the child care system.