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Child care changes: what will it mean for your family?

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If you’re assessing child care options for next year, now is the time to find out what the Turnbull government’s new child care package will mean for your family.

The new child care package is one of the biggest reforms in 40 years and it will deliver more access to subsidised early learning and child care, with almost one million Australian families set to benefit.

So, what are the main changes?

Well, firstly the existing Child Care Benefit and Child Care Rebate will be replaced with a new single payment called the Child Care Subsidy that will be means tested based on income, the activity of families – such as work, study or volunteering – and the type of service a child attends.

We’re also investing an extra $2.5 billion to deliver more support for more families.

Understanding the different types of activity that will be recognised is key to maximising your subsidy. The more activity, the more hours of subsidised child care you can receive – up to 100 hours per fortnight.

Your hours of subsidised child care will be based on the person who does the least amount of activity if you’re in a two-parent family.

There are a number of “recognised” activities, and these can be combined to boost your subsidy. Recognised activities include paid work (including annual leave and parental leave), being self-employed, doing unpaid work in a family business, participating in training courses, volunteering, or actively seeking work.

We understand that many parents are not only in paid work, but at the same time they may be studying and often also volunteering. It is important that if you are undertaking a number of different activities, you include them as they all contribute to your entitlement.

The new child care package is designed to offer more support for more families. If you’re earning less than $185,000 a year – like 85% of families currently using child care in Australia – there will be no annual cap on the amount of subsidy you can receive.

For families earning between $185,000 and $350,000 a year, the current rebate cap of $7613 will be lifted to $10,000 per child, per year. These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.

The package will also provide targeted assistance to vulnerable and at-risk children and their families. Those on low incomes of $65,710 or less a year will be able to access up to 24 hours of subsided care per child per fortnight even if they don’t meet the new activity test, as part of the Child Care Safety Net.

To get the most of out of the new child care package and effectively plan your finances for when it starts on July 2 next year, visit education.gov.au/ChildCare and use the estimator to gauge your family’s level of subsidy.

Written by Simon Birmingham

Simon Birmingham

Senator Simon Birmingham is the Minister for Education and Training.

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