All Posts in Category: Childcare Rebate

child care rebate

That sneaky thing about your Childcare Rebate

Hi

It’s half way through April now and you’re wondering why has my child care rebate stopped? Aha. Hands up who has maxed out their $7,500 Childcare rebate? But you’re doing the happy dance now that the new laws have gotten rid of the $7,500 Cap? Yes?

Don’t.

That doesn’t start until 1 July 2018 which means that you have an ENTIRE financial year to go until we move onto the new Childcare Subsidy from the system we have now.

So it’s full fees for some of us now until 30 June. Did you know that if you also receive the Childcare Benefit, Centrelink actually withholds the final 15% of your $7,500 until you submit your tax return after 30 June? That means that you stop receiving the Childcare Rebate each financial year when you reach a cap of $6,375 and the remaining $1,125 may or may not be refunded with your tax return.

Why do they do this?

Well it does make sense from Centrelinks’ point of view. The amount you receive for Childcare Benefit is based on an estimate you make at the start of the year of how much you think you will earn. If you underestimate, Centrelink will overpay you during the year and they will want their money back. They get their money back from the $1,125 that they hold back. The only way they know if you have been overpaid is when you do your tax return. Then your estimate becomes the actual and they know for sure if you have been overpaid – or hopefully underpaid.

I have a task for you this week.  Get the statements you receive from your childcare centre. At the very bottom of your statement it will tell you how much of Childcare Rebate you have received this year. Make sure it’s what you expect it to be and that it matches the balance from Centrelink. The reason I want you to do this is because of something that happened to me last month.

I don’t receive the Childcare Benefit. When I applied all the way back in 2011, I ticked the box that said I wanted a percentage of 0%. There was never EVER going to be a chance of any over payment by doing that. I’m an accountant – it’s my job to be conservative!

So when I stopped receiving my Childcare Rebate last month I checked my statement from childcare and it said that I had received $6,375. This didn’t seem right to me as I know the last 15% shouldn’t be withheld from me as I don’t receive the Childcare Benefit.

Then I checked the Centrelink App which showed that in the previous week I had been allocated to receive Childcare Rebate, however on the statement from my childcare centre, it had not been applied. There was a mismatch and it was costing me money!

The issue turned out to be in the software that the childcare centre uses and it was all fixed and I received a credit. The reason that I want you to do this double check is that according to Centrelink I had received the money, but it was not being passed on to me by the centre. As a result, when all the year end balances will be done with my tax return it will not be refunded to me and I would have been out of pocket forever.

Image-1It’s tips similar to this one that are included all throughout my instruction manual Your Family Budget. I don’t just tell you what to do and what it all means, but more than that, I actually give you information that makes it relevant for your situation, whether you are applying for Paid Parental leave or Childcare Payments. Save yourself the stress and the wasted hours of time and download Your Family Budget today.

Lisa

Childcare funding – what’s about to happen?

Hi everyone,

Malcolm Turnbull announced in a speech last week that he intends to introduce changes to Childcare funding as soon as parliament resumes. I understand that this will happen next week. If it does pass through parliament early this year, as hoped by the government, it will start at the intended date of 1 July 2018. I have written in the past in detail what those changes will be and you can read my detailed explanation here.

We are well over due a change. I have calculated that my childcare fees have increased by 57% from 2011 when my eldest started long day care to now with my youngest. However there have been no changes AT ALL to the Childcare Rebate cap of $7,500. In 2011 I did not reach the cap with three days a week of childcare, now in 2017 I will reach it at around 10 months into the financial year. This is for the same level of care and probably with our carers receiving similar salaries. Not impressed.

So what is stopping parliament from passing the legislation that will approve these changes? These changes were first introduced in 2013 so what is taking so long? It is that in order to put an extra $3 billion into Childcare funding, the government wants to raid another Family Benefit. Simply, to increase funding for Childcare payments, the government is planning to reduce funding for Family Tax Benefit and this is creating a lot of push back from those that hold the balance of power in our parliament.

And so we remain at a standstill. Again.

It will be interesting to see what the government will be willing to negotiate in order to see these changes implemented. As usual, I’ll keep you updated.

 

Image-1If you are still unsure of how you can take advantage of the current Childcare funding arrangements, my guidebook Your Family Budget tells you how to set up your arrangements to ensure you don’t have to repay Centrelink at the end of the year. Also it includes details of the best way to receive your payments for your situation plus simple calculations that will help you determine how long it will take for you to reach your Childcare Rebate cap of $7,500. You can purchase and quickly download Your Family Budget here.

Lisa.

 

Centrelink App to be removed soon – make sure you have the latest one.

Do you use Centrelink’s phone Apps?

Personally I prefer them over logging into myGov all the time from my computer. Currently there are two apps that are pretty much doing to same thing:

  1. Express Plus Families App
  2. Express Plus Centrelink App

Centrelink have announced recently that the Families App will be retired on 26 September.

If this is the only App you currently use then I would encourage you to now download the Centrelink App.  If you log into the old App you will actually be prompted to download the new Centrelink App.

Also, I found it easily in the App Store on my iphone by searching for ‘Centrelink.’ It is also on Google Play, but not the Microsoft Windows Store. Your PIN will remain the same in the new App, but if you have been using the Vault feature to store documents, these will disappear unless you email or print them.

What do I use the most on the Centrelink App?
  1. Locating CRN numbers

If you tap on ‘Personal’ it will bring up your basic information such as Date of Birth, YOUR CRN  and also your CAN. It also tells you what payments you are approved for.  An approval for ‘CCB for Approved Care’ means you are also receiving the CCR. If you tap on ‘My Family’ it will list your children that have been included in a Centrelink registration and it will include their Date of Birth and CRN.

  1. Looking up how much of the Childcare Rebate I have used

If you tap on ‘Menu’ and ‘Childcare’ you will see everything that is relevant to your CCB/CCR with each child. A summary of how much CCB and CCR they have received in the current financial year, your CCB percentage and a weekly summary of your child’s attendance at childcare with the fees for that week.

 

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Your Family Budget eBook – Making Sense of Government Parenting and Childcare Payments.

My guide to everything you will ever need to apply for and understand Parental Leave Pay, Dad and Partner Pay, Childcare Benefit & Childcare Rebate.  All in one place, with easy explanations.

Changes to Child Care

Changes to Childcare Payments starting 1 July 2018

This week saw the first sitting of parliament since the federal election. The Government didn’t waste any time and reintroduced* the legislation that will make the big changes to Child Care Benefit and Child Care Rebate – the Jobs for Families Child Care Package.

Originally, this package was meant to start on 1 July 2017, but in the Budget delivered in May 2016, its introduction was delayed by one year and will begin on 1 July 2018.

*(Reintroduced as it was introduced in December 2015, but not passed by the Senate, instead it was referred to an inquiry. This inquiry did actually recommend it be passed, but then parliament was dissolved for the election!)

What are the Changes to Child Care and how will it affect you?

Here is a reminder of what this package is going to offer:

1. The Childcare Benefit and Childcare Rebate will disappear and be replaced with one Childcare Subsidy.

2. It is means tested. Here are the combined family income rates:

 Combined Family Income Subsidy per cent of the actual fee charged (up to relevant percentage of the hourly fee cap)
Up to $65,710 85 per cent
More than $65,710 to below $170,710 Tapering to 50 per cent*
$170,710  to below $250,000 50 per cent
$250,000  to below $340,000 Tapering to 20 per cent*
$340,000  or more 20 per cent

*Subsidy tapers down by 1 per cent for each $3000 of family income

3. Notice that it is up to a percentage of an hourly fee cap – not a percentage of the actual rate you pay if your fees are higher than these rates. This is the same system as the current Childcare Benefit standard hourly rate. Currently at $4.30 an hour.

When the subsidy commences the hourly fee caps will be:

Service type Maximum hourly fee cap
Centre Based Long Day Care $11.55
Family Day Care $10.70
Outside School Hours Care $10.10

4. For families earning more than $185,710, an annual subsidy cap of $10,000 per child will apply, similar to the cap of $7,613 we have now.

5. All of these rates will be adjusted for CPI so when 1 July 2018 rolls around they will be slightly higher.

6. You need to be performing an ‘activity’ to be eligible for the Childcare Subsidy, this can include paid work, self employed work, unpaid work in a family business, looking for work, volunteering or studying. (I haven’t found any mention of unpaid maternity leave which is currently eligible for 12 months of Childcare Rebate.)

7. It is the number of hours of that ‘activity’ you perform that gives you a corresponding number of hours of Childcare Subsidy, the Activity Test is:

Hours of activity (per fortnight) Maximum number of hours of subsidy (per fortnight)
8 hours to 16 hours 36 hours
More than 16 hours to 48 hours 72 hours
More than 48 hours 100 hours

It looks like the Hours of Activity will relate to the parent with the lower number of hours. So if your family has a stay at home parent that works less than 8 hours, your family wont be able to access the new Childcare Subsidy.The exception is if your Combined Family Income is less than $65,710. Then you will be able to access 24 hours a fortnight.

Edit: The Bill was passed by the parliament on 9 February 2017. I have made minor updates to this blog post to reflect this and any other rate changes.

Lisa.

Image-1It’s tips similar to this one that are included all throughout my instruction manual Your Family Budget. I don’t just tell you what to do and what it all means, but more than that, I actually give you information that makes it relevant for your situation, whether you are applying for Paid Parental leave or Childcare Payments. Save yourself the stress and the wasted hours of time and download Your Family Budget today.