The New Child Care Subsidy (CCS): What You Need to Know

As you may already know, from 2 July 2018, the new Child Care Subsidy (CCS) system will come into effect. This will replace the current Child Care Benefit (CCB) and Child Care Rebate (CCR) arrangement and makes it easier for families to access childcare. To help Australian families, the government is injecting another $600 million a year to make childcare more affordable, accessible and flexible.

In good news, many families will see their out of pocket childcare fees fall between $20 – $30 per week under this new system.

All families will need to register for CCS before 2 July to ensure their subsidy is in place when the new system begins.

Calculating your CCS

Your CCS will be calculated using three components:

Combined family income

Your family’s combined income will calculate the CCS percentage you’re entitled to.

Remember, you will need to contact Centrelink when your combined income increases or decreases.

Family income	CCS %
$66,958	85%
$66,958 – $171, 958	Subsidy reduces 1% for every $3,000 over $66,958
$171,958 – $251,248	50%
$251,248 – $341,248	Subsidy reduces 1% for every $3,000 over $251,248
$341,248 – $351,248	20%
$351,248+	Nil

These tax brackets will be adjusted as per CPI every financial year.

Level of activity

CCS is linked to how much a family contributes to the Australian economy through activity. This activity level is calculated from the parent with the lowest number of hours of activity.

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

What counts as activity?

Under the new system, you will only be able to access the Child Care Subsidy if you are doing suitable activity and the amount of activity will then determine how many hours of Childcare Subsidy you are eligible for.

Activity counts as:

• Paid work (including unpaid lunch breaks)
• Commute time from childcare centre to work (excludes time travelling form home to childcare centre and vice versa)
• Authorised leave (eg maternity leave, long service leave, annual leave etc)
• Unpaid leave of up to 6 months
• Unpaid work in a family business
• Setting up a new business
• Study
• Training and study (includes semester breaks)
• Work experience/internships (whether paid or not)
• Volunteering
• Looking for work (eg internet research, contacting employers, preparing resumes/letters of application, preparing for and attending job interviews, travel time for interviews)

Concerned you won’t have enough activity?

There may be some families that lose the level of childcare funding support they have become used to as a result of the activity test. However, please note:

• Activity is based on the family’s estimate over a thirteen week period
• For casual/contract/itinerant workers whose hours may vary from week to week, you should pick the week with the highest level of activity in the thirteen week period and use that as your level of activity
• You can go onto myGov and change your activity level at any time
• While you do not have to verify your activity, the Government has said that it will look to audit about 10% of families each year to seek some form of verification that the activity is valid
• Families earning less than $64,710 are exempt from activity tests for up to 24 hours care per fortnight

To help families increase their hours of activity, families can volunteer at their Guardian centre – see your Centre Manager for more details.

The new caps

The current cap of $7,500 per child has been updated depending on your family’s combined income.

• Families earning less than $186,958 = no cap
• Families earning $186,958 to $351,248 = $10,190 cap
• Families earning over $351,248 are not eligible for CCS

Note: the government will be holding back 5% of CCS paid to families until reconciliation at the end of every financial year. This balance will be paid back to families in their tax return if they are eligible.

What you need to do now

Questions or Concerns?

Please talk to your Centre Manager who will be able to assist you with any questions or concerns you may have.

Visit the government’s website on the new system here.