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 childcare 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%|
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