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Confused About the Child Care Subsidy?

by Sesame Lane Admin on 24/10/2019 1:10:55 PM

Let’s Untangle it

The federal government has provided financial support for child care since the early 1970s in various guises. The latest financial assistance model is the child care subsidy.
So what do you need to know about the child care subsidy?  In this article we explore:
  • The basics of What the Child Care Subsidy is
  • How to determine Eligibility for the Child Care Subsidy
  • How Much Financial Assistance you may receive
  • How to Apply for the Child Care Subsidy
  • What to do if you need Additional Financial Support

What is the Child Care Subsidy?

If you haven’t used child care services for a few years, you might be more familiar with the terms ‘child care benefit’ and ‘child care rebate.’ These payment systems were replaced by the child care subsidy in July 2018.

The child care subsidy’s purpose is to make child care affordable so that parents and carers can participate in the workforce, look for work or engage in study. It’s funded by the federal government and administered through Centrelink.

Unlike former payment systems, the child care subsidy does not have a cap for most families and it's a means-tested payment. This ensures families on lower incomes receive more support than those on higher incomes. The subsidy is now paid directly to approved child care providers, like Sesame Lane, with the family then paying the provider the amount not covered by the subsidy.


Am I Entitled to the Child Care Subsidy?

If you are an Australian resident and you care for a child or children 13 years of age or under you may be eligible for the child care subsidy.

However, there are two main reasons you could be found ineligible:
  • Firstly if your combined family income is more than a specified amount; you are automatically ineligible for any subsidy.
  • Secondly, if you are a single parent and don’t work OR you are a couple and one of you doesn’t work, you may be deemed ineligible depending on what other activities you participate in.
If this is your situation, Centrelink will ask for information on other activities undertaken by yourself and/or your partner, (like looking for work, working unpaid for a family business, studying or training) and could find you entitled to the subsidy.

How Much of the Child Care Fees will the Subsidy Cover?

Families on lower incomes can have up to 85% of their child care fees covered by the subsidy. As a basic guide, the federal Department of Education provides a breakdown of subsidy rates based on family income amount.

The government sets an hourly cap on the rates it pays for each type of care, and will pay up to its set hourly rate cap. If your child care provider charges more than the government-set hourly cap you will need to pay the difference.

How Do I Apply for the Child Care Subsidy?

As with most other forms of government assistance, you’ll need to use Centrelink and your myGov account to apply for the child care subsidy. If you do not have a myGov account and cannot set one up, you can contact Centrelink directly on their ‘families’ number.

It’s a good idea to find out what you’re entitled to first using the Centrelink Payment and Service Finder. You’ll need to supply supporting documentation to back up your application.


What if I Need Extra Support?

Sometimes the child care subsidy is not sufficient for parents and carers on lower incomes. Under certain circumstances, you could be entitled to an additional payment.

This might be the case if you are:
  • A grandparent on income support
  • Moving from income support to paid work; or
  • Experiencing financial hardship
As with the child care subsidy, to apply for the additional child care subsidy you’ll need to go through your myGov Centrelink account, or contact Centrelink on the ‘families line’.
At Sesame Lane our values and our commitment to care extends to all our parents and carers - we will provide you with transparent, accurate information about the subsidies we receive on your behalf.