New Childcare Subsidy - What You Need To Know

Have you switched over?

New Childcare Subsidy - What You Need To Know Stock image

Families stand to lose thousands of dollars in subsidies if they fail to update information for the new child care system.

It is understood that roughly 670,000 families have switched over to the new system, but nearly half a million are yet to update their details.

Changes from July 2 will see $2.5 billion added to the sector, with it claimed that the boost will see more families able to get back into the workforce.

The new system will also favour families who work more or are earning the least, with hourly caps set to interfere with fee increases.

"We know many families are time poor but this is about giving them the support they need and deserve to pay their childcare bills," Education Minister Simon Birmingham said.

"And it's worth the 10 minutes or so it might take to update your details because ultimately you'll be hundreds or possibly thousands of dollars a year better off."

The minister said although arrangements were in place to ensure families who failed to meet the July 2 deadline didn't miss out, it would take time to repay withheld money once they had signed up.

Required information includes estimated income for 2018/19 and approximate work hours for both parents.

Examples of how families are set to benefit: A family on $50,000 - both parent/s working, with two children aged under 6 in long day care two days a week at $100 a day will be around $2,000 better off a year. A family on $80,000 - both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be over $3,000 better off a year. A family on $150,000 – both parent/s working, with two children aged 6 and under in long day care three days a week at $100 a day will be more than $1000 better off a year

- Education Minister's office

Under the new system, both parents must be working, studying, volunteering or searching for work at least eight hours a fortnight to be eligible for the subsidies.

Families with annual incomes under $186,958 will no longer face a cap on the amount of fee rebate the government will pay each year.

For those earning more than this, the annual cap will lift from $7500 to just over $10,000 a child.

To qualify for the new childcare subsidy, you'll need a mygov Centrelink account, and a completed childcare subsidy assessment.

Other information you'll need on hand includes:

  • Family income estimate for 2018-2019 financial year;
  • Work hours;
  • Child care enrolment details.

There is an online calculator tool available to help work out how much you may receive, available here.

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