EXPLAINER: Child care subsidy changes kick in this week. What will this mean for you?
For families with more than one child in child care, daycare fees can be a huge expense.
But things are about to get a little bit easier, with changes to the Federal Government's child care subsidy to take effect from this week.
The changes, which were brought forward by four months, lift the rate of child care subsidy for parents with multiple children in care.
Changes to the Federal Government's child care subsidy kick in this week. Peter Braig
Will the changes affect me?
The changes only apply to families with more than one child aged five and under in care.
It is still means tested, so to be eligible, your family's combined income has to be under about $354,000.
If you've only got one child in care, your childcare subsidy will remain the same.
How much extra will I receive?
Under the changes, the subsidy given to parents for second children onwards will be 30 per cent higher, up to a rate of 95 percent.
For example, if you currently get a 50 per cent subsidy, that will increase to 80 per cent for your second child in daycare.
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Parent with more than one child under five in day care are eligible for the subsidy increase. iStock
The changes mean around 250,000 families will be, on average, $2,260 a year better off, Employment and Workforce Minister Stuart Robert said.
"For a family who are charged a typical fee and earn $120,000 a year with two children in child care for five days per week, the saving will be $144 per week compared to current settings."
What do I have to do?
Nothing.
The changes should happen automatically for parents already receiving the child care subsidy.
Services Australia will work out how much the subsidy for each child is. You should have received a letter to confirm your new subsidy.
Family income | Previous out-of-pocket child care cost per week | Current subsidy (standardCCS rate) | New 2nd child subsidy | Futureout-of-pocket child care cost per week | Total better off per week |
$40,000 | $162 | 85% | 95% | $108 | $54 |
$80,000 | $198 | 82% | 95% | $126 | $72 |
$110,000 | $306 | 72% | 95% | $180 | $126 |
$120,000 | $342 | 68% | 95% | $198 | $144 |
$140,000 | $414 | 62% | 92% | $252 | $162 |
$180,000 | $540 | 50% | 80% | $378 | $162 |
Table source: Federal Government
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