Government Funding

What are the eligibility requirements?

To be eligible for the Child Care Subsidy the following requirements 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 Child Care Subsidy, or their partner, must
  • meet residency requirements and
  • meet the Child Care Subsidy 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.

There are exemptions for individuals who genuinely cannot meet some eligibility requirements.

How much can a family receive?

The level of subsidy a family receives will depend on three factors:

• Income – a family’s (both partners) combined 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.

Combined Family Income

The table below outlines combined family income and relevant rate of Child Care Subsidy to which families will be entitled.

These amounts are correct for 2021-22 financial year.

*The percentage goes down by 1% for every $3,000 of income your family earns

From July 2023 most families using child care will get increased Child Care Subsidy (CCS). Read more about changes if you get family payments. If you already get CCS, you don’t need to do anything to get the increased rate. We’ll apply changes to your CCS automatically.

Families can use the Department of Human Services Payment and Service Finder to estimate how much Child Care Subsidy they may be entitled to by entering their details.

Activity test

The number of hours of subsidised child care to which a family will be entitled will depend on how much time parents spend undertaking recognised activities, for example work, training, volunteering, study or if it’s the year before your child starts Primary School.

The Child Care Subsidy activity test takes into account both parents’ (if applicable) activities, however, the maximum hours a family will receive will be based on the person with the lowest level of activity. A broad range of activities will meet the activity test requirements.

For people with irregular work hours, such as casual employment, an estimate can be used based on the highest number of hours they expect to work in any one fortnight over a three-month period.

There is a four-step activity test to calculate how many hours to which a family will be entitled.

**If it’s the year before your child starts primary school you’ll have access to 36 hours of subsidised care per fortnight

Is there an annual cap?

If a family earns $190,015* or less, they will not have an annual cap on their Child Care Subsidy each financial year.

If a family earns between $190,015 and $354,305*, their subsidy will be capped. This means their fees will be subsidised up to the annual cap of $10,655* per child each financial year.

*These amounts are correct for 2021-22 financial year.

How will the Child Care Subsidy be paid?

Child Care Subsidy 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 Child Care Subsidy when (or before) each child starts attending care.

Any Child Care Subsidy 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 Child Care Subsidy during the year the family may have to repay some Child Care Subsidy (a debt).

When does a family stop receiving Child Care Subsidy?

If a family earns $354,305* or more per year, they will not be entitled to any Child Care Subsidy. However, high income families who are not certain of their combined family income for the year ahead, are encouraged to make a claim for Child Care Subsidy. This maintains their eligibility for Child Care Subsidy throughout the year and will ensure they receive entitlement if their actual income at the end of the financial year ends up being below $354,305*.

*These amounts are correct for 2021-22 financial year.

What is the Child Care Subsidy withholding?

Child Care Subsidy 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 incomes or activities).

The withholding amount is automatically set up 5%, however you can vary this amount to suit your circumstances. You can do this twice a year using your Centrelink online account through myGov.

Withholding is important as it helps protect families from possible debts. If a family underestimates their family income, they may end up with an overpayment which they will need to pay back to the Government. The amount withheld will be used to reduce the debt with Government.

If a family overestimates their family income and didn’t get enough subsidy, any outstanding amount will be paid directly to the family by Government, this includes the money withheld.

What is the Additional Child Care Subsidy?

The Additional Child Care Subsidy is a top up payment in addition to the Child Care Subsidy which will provide targeted additional fee assistance to families and children who need extra support.

The Additional Child Care Subsidy has four elements:

• child wellbeing
• grandparents
• temporary financial hardship
• transition to work.

Where can I get further information on the child care package?

• Visit the Department of Education and Training Child Care Package website at gov.au/eccc
• Visit the Department of Human Services Child Care Subsidy website gov.au/childcaresubsidy