What You Need to Know About Changes to the Child Care Subsidy

What is the Child Care Subsidy (CCS)?

Currently, the government assists families with their childcare payments in the form of a Child Care Subsidy (CCS). This payment is made directly to childcare providers who pass it on to families as a fee reduction. A change to the current CCS payment will take effect on 7 March, 2022, to encourage more women into the workforce.

Changes to the Child Care Subsidy

The Federal Government is making changes to the CCS, which will make childcare cheaper for families with two or more children under school age. Around 250,000 Australian families will benefit from the increase to the CSS, making them better off by $2,200 a year.

The Government will pay a higher subsidy to families with more than one child and will also remove the annual cap for families who receive CSS. The aim is to reduce childcare costs for low- and middle-income earners and encourage more women to enter the workforce. The new change was agreed in August this year with the intent to introduce it in July 2022. However, the decision has been made to bring it forward to March 2022 to allow families to access the support earlier.

How does the current CCS payment work?

The current system is means tested, and the CCS payment is made to the childcare provider who passes on a fee reduction to the family. Currently, a family can expect to receive an 85% subsidy if the combined family income is less than $69,390. If the family income is between $189,390 and $353,680, the CSS  is capped at $10,560 per child.

The new CCS changes

With the new changes to the CCS, families can expect to receive an additional 30% on top of the current subsidy. Eligibility for the increase will apply to families with two or more children under school age in childcare. For example, if your first child is eligible for a 50% subsidy, your second child will receive 80% and this will be capped at 95% of your second child’s childcare costs. Families with only one child will not be eligible for any additional subsidy under the new CCS rules. A family with two children in care will be eligible for the CCS, however, when the older child leaves care to attend school, the additional CCS benefits will cease.

Explorers Early Learning and the Child Care Subsidy

To qualify for the CSS, every family must have a myGov account and complete a CCS assessment. It is important to note that for families to qualify and receive the CCS, families must have their myGov account linked to Centrelink.

You can register for a myGov account here.

Three factors determine the level of CCS that families receive:

  • Combined family income –combined family income, adjusted after tax, will determine the subsidy percentage your family will be eligible for.
  • Activity level of parents – an activity test determines the number of hours of subsidised childcare families will have access to per fortnight.
  • The hourly rate cap based on the type of childcare service you use – the maximum hourly rate the Government will subsidise is based on the type of childcare service. The maximum hourly rate for 2021/2022 for Centre Based Long Day Care is $12.31.

As mentioned previously, the CCS is paid directly to the Centre and is based on your child’s attendance records. The gap between the Centre’s daily charge and the CCS will be payable by the family via Direct Debit.

Our Centre staff are always happy to assist you should you have any questions regarding the CCS.

For more information please visit: https://www.dese.gov.au/higher-CCS