The Australian Government is committed to ensuring that Australian families are able to access affordable, flexible and high quality child care. The government provides a number of subsidies and programs to help with the cost of child care, with the Child Care Subsidy (CCS) being the main type of assistance that most families will use.
To be eligible for CCS the following requirement must be met:
The child must;
- Be a ‘Family Tax Benefit child’ or ‘regular care child’ and
- Be 13 or under and not attending secondary school and
- Meet immunisation requirements.
The person claiming the CCS, or their partner, must
- Meet residency requirements and
- Meet the CCS activity test (or be eligible for an exemption) and
- Be liable to pay for care provided under a Complying Written Arrangement (their written agreement) with their child care provider.
Child care must be provided by an approved provider in Australia and not be part of a compulsory education program, for example school.
The level of subsidy a family receives will depend on three factors:
- Income – a family’s (both partners) completed income
- Activity test – what activities the individual and their partner undertake or exemptions that might apply and
- Service type – the type of approved child care service used, for example Centre Based Day Care.
From 7 March 2022, families with children aged five or under in care will get a higher subsidy for their second child and younger children. Eligible higher rate children will receive a 30% higher subsidy, up to a maximum 95%. Families will continue to receive their income tested CCS rate for all children. Children eligible for the higher CCS rate will have the increase automatically included in their CCS percentage report to the service.
How will the CCS be paid?
CCS will be paid directly to child care providers to pass on to families as a fee reduction so that their fees are reduced at the time they use child care. Families will pay their provider the difference between their subsidy and the fees charged. Families will not be able to elect to receive their subsidy as a lump sum at the end of the financial year. Families will need to make a claim for CCS when (or before) each child starts attending care.
Any CCS owed to families following the end of year reconciliation process will be paid directly to families as a lump sum. If a family has been overpaid CCS during the year the family may have to repay some CCS (a debt).
CCS Withholding
CCS withholding is designed to help families avoid or minimise debts at reconciliation, which could occur due to changes in circumstances throughout the year (for example, changes to family income or activities).
Parents can request their percentage of withholding be adjusted up or down through Centrelink. However, withholding is important as it helps protect families from possible debts. After reconciliation any outstanding subside is returned to the family.
Five per cent of all families CCS will be withheld by the Government; however, withholding will not apply to Additional CCS payments.
Additional Childcare Subsidy
The Additional Child Care Subsidy (ACCS) is a top up payment in additional to the CCS which will provide targeted additional fee assistance to families and children who need extra support. The ACCS has four elements:
- child welling being
- grandparents
- temporary financial hardship
- transition to work
Families can apply for the subsidy by accessing their Centrelink online account through myGov or by visiting a Centrelink office and applying in person.
