What is the Child Care Subsidy?
Purpose
The Australian Government helps families with child care fees through the Child Care Subsidy (CCS). CCS aims to make early childhood education affordable. An eligible child care service must be granted approval under Family Assistance Law by the department to receive CCS on behalf of families. Child care providers get paid when they pass on CCS to families as a fee reduction.
How it works
To receive CCS on behalf of families, childcare providers must be approved under Family Assistance Law. Providers receive CCS and pass it on to families as a fee reduction.
A co-contribution to child care fees is made when families pay their out-of-pocket costs. Out-of-pocket cost or also known as gap fee is the difference between the provider’s fee and the subsidy amount. There are important rules about the fees charged to families.
Child Care Subsidy (CCS) can be given to families when their children are unable to attend child care up to 42 days a year. Additional child care subsidies are also provided to families in certain circumstances such as COVID-19.
Services Australia balances CCS payments after each financial year to ensure families that the government is paying the right amount. Services Australia can only balance CCS when they have all the information needed including (1) children’s attendance information from your child care service (2) confirmed income (3) partner’s income (4) your ex-partner’s income.
How income impacts your CSS
Family income
Your family’s income affects the CCS percentage you are entitled to. It will be computed using your family income estimate. The percentage is the amount that the government will subsidise. It will apply to either your hourly fee or the relevant hourly rate cap, whichever is lower.
If your family’s income costs between $0 to $70,015, your child care subsidy will be at 85%. The percentage goes down by 1% for every $3,000 of income the family earns. Families earning $175,015 to below $254,305 will get 50% CCS percentage.
Families earning between $254,305 to below $344,305 have a CCS percentage between 50% and 20%. The percentage goes down by 1% for every $3,000 combined family income. If the family income ranges from $344,305 to below $354,305 they will get 20% CCS. Lastly, if the family income is estimated to cost $354,305 or more their percentage is 0%.
Other influential factors
Activity test
Your subsidised care for CCS is affected by your activity level. The activity level is based on the hours of recognised activities. This is used to work out how many hours of subsidised child care the government will pay for each fortnight.
The hours of subsidised child care that can be accessed per fortnight applies to each child. There are four activity levels.
More than 8 to 16 hours get 36 hours of subsidised care for each fortnight. Those with more than 48 hours of activity level get 100 hours of subsidy. If you have more than 16 to 48 hours you’re given 72 hours of subsidised care for each fortnight. If your activity level is less than 8 hours, your hours of subsidised care is 0 hours if you earn above $70,015 and 24 hours if you earn $70,015 or below.
Type of daycare service
These are services that have Australian Government approval to get CCS on one’s behalf to reduce fees. Approved child care providers include:
- Centre Based Day Care, including long day care and occasional care
- Family Day Care
- Outside School Hours Care, including before, after and vacation care
- In-Home Care.
Meanwhile, the eligibility criteria for In-Home Care are different. One must meet all eligibility criteria for Child Care Subsidy as well as extra criteria. The Department of Education, Skills and Employment website will be very helpful in learning more about this.
Number of children
How many children a family has is one important factor that affects how much CCS they receive. Families with more than one child in care may get higher subsidy for their second child and younger children if they:
- earn less than $354,305
- have more than one child aged 5 or under in child care.
Families will continue to receive their income tested CCS rate for all children. Those qualified for the higher rate will have the increase automatically included in their CCS percentage reported to Services Australia
Applying for the CCS
Eligibility
Financial assistance is given to families by directly paying the subsidy to their childcare providers. This financial assistance help families reduce the fees they pay. For families to be eligible for CCS, they must meet the requirements set
Families are eligible if at least one of the parents meets all the following:
- care for the child at least 2 nights per fortnight, or have 14% care
- liable for fees for care provided at an approved early learning service
- meet the residency rules
The child must also meet the following:
- immunisation requirements
- not be attending secondary school unless an exemption applies
If a child attends secondary education, they may still be eligible if they need supervision. They must be either:
- 13 or under
- 14 to 18 with disability
The family must present evidence as to why their children cannot be unsupervised. This may include evidence of the disability and a confirmation that an adult is unable to care for the child during this time. Those who are liable to pay fees will need to apply for this subsidy and meet these criteria.
Extra support
Additional Child Care Subsidy can be given to families. This is paid on top of the CCS to provide extra support. There are different types of Additional Child Care Subsidy.
One can apply if they’re either (1) an eligible grandparent getting an income support payment, (2) transitioning from certain income support payments to work, (3) experiencing temporary financial hardship, (4) caring for a child or children vulnerable or at risk of harm, abuse or neglect.
Approved Childcare
Child Care Subsidy is available for services that have been approved by the Australian Government. Approved child care includes the following:
- Centre Based Day Care, including long day care and occasional care
- Family Day Care
- Outside School Hours Care, including before, after and vacation care
- In Home Care.
In Home Care
The eligibility criteria for In Home Care are different. For In Home Care, there are different eligibility requirements. The Child Care Subsidy is subject to all eligibility requirements and additional criteria.
How to claim
To apply for CCS, the following steps must be accomplished:
Step 1: One must check if they are eligible to apply. They must also be aware of the Family Assistance Law
Step 2: Apply for National Law Approval (if relevant)
Step 3: Submit all mandatory documents and information
Step 4: Complete PRODA (Provider Digital Access) registration
Step 5: Undertake fit and proper checks for all personnel
Step 6: Submit the application online
Step 7: Wait for approval decision
Services Australia will guide you through the claim process for new claims and help you update an existing claim to add another child. A CCS claim can be backdated for up to 28 days. A lump sum claim for Child Care Subsidy cannot be made.