Will the Child Care Subsidy affect your family?

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Starting 2nd of July, 2018, the Child Care Rebate and Child Care Benefit will be abolished and replaced with a single payment called the Child Care Subsidy. Chan & Naylor accounting firm talks about it in detail.

The new Child Care Subsidy aims to boost childcare with an increase in federal spending to $2.5 billion. To know how much a family will receive, the combined family income, the parents’ work activity and the type of childcare service the family uses will be considered.

Families who earn over $186,958 per year will feel the biggest impact as families who earn below this amount won’t have a cap on the amount of Child Care Subsidy they will receive. Those who earn above this threshold but under $350,000 will be limited to $10,000 a year and lose their 50% rebate which will be reduced to 0% gradually when combined earnings reach more than $351,248.

Right now, a $120 per day cost would receive a 50% rebate but if the parents’ combined income reaches the maximum amount of $351,248, they won’t receive any rebate going forward. You can see the percentage of child care fees that the Government will contribute based on their combined income below. 

 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%

If you would like to know more about Child Care Subsidy, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. Chan & Naylor accounting firm will contact you to explain more. 

Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution for your superannuation, taxation, property investment, asset protection, estate planning and more.

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