All Posts in Category: Childcare Subsidy

Completing your Child Care Subsidy Assessment

We now know that we wont automatically transfer across from the Child Care Benefit to the new Child Care Subsidy. For this to happen, you must complete a Child Care Subsidy Assessment before 2 July 2018 to continue to received Child Care funding. This post has the instructions to help you do this quickly. Honestly I got it done in about 7 minutes however my husband and I have regular hours so there wasn’t anything we needed to calculate.

I updated my information in the Centrelink App, but if you log into your my.Gov.au account you will also be presented with a list of Tasks to complete.

1. I have two tasks to complete and I press the Task button and swipe to the Child Care Subsidy assessment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. There are four tasks that need to be completed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. The first task asks for your estimated income in the 2018-19 financial year. Complete this in the exactly the same way you have done each year that you have accessed the Childcare Benefit. Add together any salary, fringe benefits tax, child support etc.  You could estimate this amount, but I would give this some serious consideration if you think that your family could be near the amount of $186,958. Family income over this amount is subject to a cap each year. For the 2018/19 year it has been indexed up to $10,190.

4. You then need to put in an estimate of the number of hours a fortnight that you and your partner meet the Activity Test, for a full list of Activities you can include refer to this post, but the main items you count hours for are:

  • Paid Work – including maternity or paternity leave, long service leave and annual leave
  • Study
  • Training
  • Unpaid internship or work experience
  • Volunteering
  • Setting up a business
  • Unpaid work in a family business
  • Looking for work
  • Caring for a child or adult with a disability

If you are in casual work – and therefore the number of hours you perform a work activity is different each fortnight, you will be asked to estimate the highest number of hours you expect to work in any fortnight over a three month period. This is the part that may take the most time to calculate.

I used the current date as a start date.

You can add a new Activity Test for each different activity you perform each fortnight. Just use the plus sign at the bottom.

 

5. Review the school details of each child that you have currently enrolled for Childcare Benefit. If your child is not yet at school then select none. Otherwise select Primary Education is they are enrolled at school.

6. Confirm all your information and you will receive a Claim ID.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What else?

If you want the easy explanation about all the new changes, I have prepared The Child Care Subsidy Solution. A simple, straight forward FREE ebook that shows you how the new Subsidy works and what you could do to increase your Subsidy. Download your copy by entering your details below.

What is the Child Care Subsidy Activity Test?

The number of hours of Child Care Subsidy that your family receives is dependent on the number of Activity hours that you undertake each fortnight. This is called the Activity Test. You will be asked to estimate your fortnightly Activity Test hours in your Child Care Subsidy Assessment. Details of that can be found here.

If your family earns above $66,958 per year, the hours of Subsidy per child that you receive are:

8+ > 16 hours a fortnight of Activity = 36 hours a fortnight of Subsidy

16+ > 48 hours a fortnight of Activity = 72 hours a fortnight of Subsidy

48+ hours a fortnight of Activity = 100 hours a fortnight of Subsidy

The number of hours a fortnight are measured against the parent with the lowest number of hours performed each fortnight.

ok, so, what meets the Activity Test?

It’s a long list but there are a few things worth knowing

    • paid work
    • paid leave (annual, sick, long service etc)
    • self employed work
    • unpaid work in the family business
    • training to improve your work skills
    • approved study
    • volunteering
    • looking for work will meet 8 hours a week of the Activity Test which can be combined with other Activities
    • travel time between the child care service and parents place of activity – but try to be reasonable
    • they can all be added together
    • they dont have to be performed during the hours that the child care service is being provided
    • you dont have to provide proof of the number of hours when estimating
    • but there might be spot checks – so be reasonable
    • casual workers will need to estimate their Activity Test over a three month period – include the fortnight with the highest number of hours in your estimate
    • If you receive a Carer Payment you will automatically undertake 100 hours a fortnight towards the Activity Test.
    • If you receive a Carer Allowance you will automatically undertake 72 hours a fortnight towards the Activity Test. However if you have a partner and they have less hours of activity than you, their hours will be used to determine your Subsidy
    • Grandparents who are primary carers for their grandchildren don’t need to undertake any hours to receive the Subsidy
    • Teachers can apply the same number of hours during the school holidays as they would during term time for the Activity Test
    • Paid and Unpaid Parental Leave is included as an activity. The number of hours used for the Activity Test is the number of hours a fortnight that you were working before going on leave. There is no longer a 12 month maximum of parental leave in order to receive child care payments. However there should be an expectation that you will be returning to your job as part of your employment.

What else?

If you would like more information on the new Child Care Subsidy, I have prepared The Child Care Subsidy Solution. A simple, straight forward FREE ebook that explains exactly what the new Subsidy is all about. You can download a copy by entering your details below.

An explanation of the Additional Childcare Subsidy.

The new Childcare Subsidy has completely changed how families receive their Childcare Payments by merging two payments into one and moving the focus of the Subsidy towards assisting both parents to return to work. As I often say with this – the more you work, the more Subsidy you get!

The government has also introduced a further top up to the Childcare Subsidy called the Childcare Safety Net and one of the parts of this is the Additional Childcare Subsidy. This is focused on assisting families in need and to allow for the most vulnerable children to continue to access Childcare where they may not be able to afford it. These new payments replace the current subsidies of Special Child Care Benefit, Grandparent Child Care Benefit and the Jobs, Education and Training Child Care Fee Assistance payment.

The four additional payments that families can apply to access are:

 

  1. Child Well being

Families could receive an additional child care subsidy for the full amount of their daily fee for up to 100 hours a fortnight to assist children that have been identified to be at serious threat of abuse or neglect. This additional funding can be applied for by both the child’s guardian or the childcare service itself.

 

  1. Grandparents

Grandparents that are principal carers for more than 65% of the time and already receive some form of income support could receive a subsidy for the full amount of their daily fee for up to 100 hours a fortnight.

 

  1. Temporary Financial Hardship

Families that are suffering significant financial hardship due to an exceptional situation could receive an additional child care subsidy for the full amount of the daily fee for up to 100 hours a fortnight. This would be available to them for a maximum of 13 weeks.

 

  1. Transition to Work

This subsidy is available for a family currently receiving one of Parenting Payment, Newstart Allowance, Disability Support Pension or Youth Allowance income support and they have created a Job Plan as part of their Employment Pathway Plan.

They may be entitled to 95% of their daily fee for the number of hours in a fortnight that they meet the Activity Test for the Childcare Subsidy. This will continue for 12 weeks after starting work and their income support has ceased.

You can only access one of these payments at a time.

5. Free Ebook

If you would like more information on the new Child Care Subsidy, I have prepared The Child Care Subsidy Solution. A simple, straight forward FREE ebook that explains exactly what the new Subsidy is all about. You can download a copy by entering your details below.

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.

 

Changes to Child Care

Changes to Childcare Payments starting 2 July 2018

This post has been updated to include the latest rates and information as at 1 May 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 2 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 rate*
Up to $66,958 85%
Over $66,958  to under $171,958 Gradually reducing to 50%
$171,958  to under $251,248 50%
$251,248  to under $341,248 Gradually reducing to 20%
$341,248  to under $351,248 20%
$351,248  or more 0%

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

When the subsidy commences the hourly fee caps will be:

Service type Maximum hourly fee cap
Centre Based Long Day Care $11.77
Family Day Care $10.90
Outside School Hours Care $10.29

4. For families earning more than $186,958, an annual subsidy cap of $10,190 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 rolls around each year 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 $66,958. 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.

p.s. If you want detailed information on the items listed above, then download the Childcare Subsidy Solution and work out ways that you can increase and decrease your Subsidy based on the amount that you earn and work.