The Child Care Subsidy is the main way the Government assists families to pay for the cost of childcare. Here is what you need to know.
The Child Care Subsidy replaced the Child Care Benefit and Child Care Rebate in 2018. The subsidy is designed to be simpler, to make childcare affordable for more families, and to provide more help to low and middle-income families.
The Child Care Subsidy is only paid for approved care, which is:
- centre-based day care, including long day care and occasional care
- family day care
- outside school hours care, including before, after and vacation care
- in-home care
The Child Care Subsidy is not paid for registered care, which is care by grandparents or other relatives, or in a standalone preschool or kindergarten. Your childcare service can tell you which sort of care they provide. The Child Care Finder website can help you find approved care in your area.
The Child Care Subsidy is worked out according to your family’s income, the hourly rate cap on the type of approved child care you use, your child’s age, and the hours of activity you and your partner do. You can estimate how much Child Care Subsidy you may get on the Services Australia website.
The Child Care Subsidy is paid directly to the childcare service. The service will then reduce your fees — you just pay the difference between the amount the service charges and the amount paid by the subsidy.
There is also a Child Care Safety Net to provide extra payments for disadvantaged families and children. For more information, visit the Department of Education and Training website.
How much will the Child Care Subsidy pay?
The amount of the subsidy will depend on:
- your combined family income (you will need to do a means test)
- how many hours per week each parent spends doing activities such as paid work, training, volunteering or looking for work
- the type of childcare service (long day care, occasional care, family day care or outside school hours care).
Families earning up to $66,958 will receive a subsidy of 85% of the actual fee charged. Families earning between $66,958 and $351,248 will receive a progressively lower percentage, depending on how much they earn. The hourly fee will be capped depending on the type of service.
For most families (those earning $186,958 or less), there is no longer an annual cap on the amount of subsidy they can receive. There is an increased annual cap for families earning more than that amount.
Sources:
Department of Education, Skills and Employment (New Child Care Package – information resources for families), Department of Education, Skills and Employment (Child Care Safety Net), Department of Education, Skills and Employment (Frequently asked questions), Services Australia (Child Care Subsidy)
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Last reviewed: June 2020
