TRANSITION TO THE NEW CHILD CARE SUBSIDY
From 2 July 2018, one new Child Care Subsidy will replace the two current child care payments.
To transition to the new subsidy, you will need to take action.
During April, Centrelink wrote to all families currently receiving Child Care Benefit and Child Care Rebate with instructions on what to do.
Director of Terang’s Buckle My Shoe Early Learning Centre Caroline Rickard said that families must take action prior to 2 July 2018.
“If families do not complete their assessment before 2 July 2018, they may not receive any child care fee assistance.”
The new Child Care Subsidy will make care more affordable.
“Families earning less than $186,958 will no longer be subject to the cap on the amount of subsidy accessed,” Caroline added.
Three things will determine a family’s level of Child Care Subsidy:
- A family’s income will determine the percentage of subsidy they are eligible for
- An activity test will determine how many hours of subsidized care families can access, up to a maximum of 100 per fortnight
- The type of child care service will determine the hourly cap rate
Pictured: Buckle my Shoe Director Caroline Rickard with Fennell West Finance Associate Jane Vaughan and daughter Audrey.
“Families need to sign into their myGov account and complete the Child Care Subsidy Assessment,” Caroline added.
Changes to the annual cap will make child care more affordable for most families.
Fennell West Operations Manager Amanda Fisher has completed some analysis of the upcoming change.
“We have run scenarios based on typical family situations and have found in most cases that families will be better off,” Amanda said.
“For example, a family with a combined income of $76,500 with 1 child attending 4 days of day care per fortnight, should be $40.47 per fortnight better off under the new combined child care subsidy,” she added.
These scenarios show that, if set up properly, child care fees should not be seen as an obstacle for people looking to return to work or earn more.
Of course, there are all sorts of other factors that need to be considered. Like your user history, whether you receive Family Tax Benefits A and B, whether your children are properly registered for child care and your estimated combined income.
Failing to provide accurate estimates in your Centrelink myGov account can have a lasting impact on your personal cash flow.
It’s not uncommon to hear of people underestimating their income, collecting fortnightly benefits based on their estimated income, only to secure more work than expected, earn more, jump up a tax threshold and end up on a payment plan to repay the Government.
Don’t get caught out. The team at Fennell West can take all the stress, forms and uncertainty away and help you make good decisions that maximise your financial position and help you achieve the work-life balance you’re looking for.