The amount of Child Care Subsidy which a family is entitled to is determined by:
- Their income
- How many children they have in care
- Their activity level
- The type of child care service they use.
💳 5% Withholding:
Withholding part of a payment reduces the likelihood of debt for individuals. A total of 5% of the child care subsidy entitlements is usually withheld from payment, unless an alternative percentage is determined by the department for the individual. At the end of the income year, the amounts paid and withheld will be reconciled.
It is important that families keep Centrelink informed about any change of family circumstances.
💰 Family Income $$$:
Family income is the annual adjusted taxable income of the individual and their partner (if they have a partner). It is used to determine the percentage of Child Care Subsidy to which an individual is entitled.
To calculate the entitlements and payments for each child, the individual will need to provide a reasonable estimate of their annual adjusted taxable income directly to Centrelink. These details will be used, along with the information submitted by the provider in their session reports, for the calculation.
Number of children in care:
Families with more than one child aged 5 or under in care will get a higher subsidy for their second child and younger children. This is due to change in July 2023.
To get the higher subsidy, a family must:
- earn less than $354,305
- have more than one child aged 5 or under in child care.
Services Australia works out which children get the higher subsidy by:
- assessing all children in the family
- identifying the standard rate child, and
- identifying the higher rate children.
The standard rate child is usually the eldest Child Care Subsidy-eligible child aged 5 or under in the family. Younger children get a higher subsidy.
Eligible higher rate children get a 30% higher subsidy, up to a maximum of 95%.
🧪 Activity Test:
The hours of subsidised child care per fortnight that a family is entitled to is determined by an activity test. Depending on the combined hours of work, training, study, recognised voluntary work or other recognised activity undertaken, a family can receive up to 100 hours of subsidy per fortnight per child. Both the claimant and their partner, if they have one, must satisfy the activity test unless they are exempt. For claimants who are partnered, the number of subsidised hours the family is entitled to will be based on the member of the couple with the lowest activity test result, even when an exemption applies.
The family or individual will provide activity details directly to Services Australia. These details will be used, along with the information submitted by the provider in their session reports and the family’s income, to calculate the entitlements and payments for each child.
Families who do not meet the activity test but have a preschool-age child attending preschool in a Centre Based Day Care service will be eligible for 36 hours of subsidised care per fortnight.
👩👩👧👦 Change Of Family Circumstances:
Woodlands will receive a notification via Xplor Notifications then into CCS entitlements of each individual’s entitlement information once the individual has confirmed their enrolment. This information is viewable through the provider’s child care software or the PEP.
When a family’s circumstances change and this affects their eligibility and/or entitlement, they are required to notify Centrelink of the change as soon as possible. We will be able to see any changes to a families entitlement through Xplor.
Changes to a family’s entitlement will take place from the beginning of the next Child Care Subsidy fortnight after the change occurred. Where a parent is late in reporting a change in their circumstances resulting in an overpayment of Child Care Subsidy for previous sessions of care, a debt may be raised (this may affect their subsequent Child Care Subsidy payments).
Parents will be notified through their Centrelink online account where Centrelink raises debts due to changes in their entitlement—for example, changes to an individual's (and any partner's) activity test result.
Where a parent is unsure about the details of a debt raised by Centrelink, they will need to log into their Centrelink online account for further details or raise their questions with Centrelink.