CCS Bill Introduced

Introduction

Everyone loves a good election commitment, especially when it helps reduce out of pocket childcare costs for families.

A central component of the Labor party's recent Federal election campaign was a more generous Child Care Subsidy (CCS). Last week the Albanese Government made good on that campaign promise, introducing the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022.

Background

The CCS provides families with financial assistance towards the cost of childcare. The CCS can reduce fees for families by up to 85%, and up to 95% for siblings. There are also additional subsidies available for families experiencing temporary financial hardship and for children at risk (ACCS).

The way that the CCS is calculated is complex, but broadly the rate of subsidy is dependent on:

Your family’s combined income;
The number of children in care; and
Your hours of ‘activity’ per week (work, volunteering, studying etc).

Your child also needs to be up to date with their immunisations and parents need to meet the Government's residency requirements.

'Activity' test

The number of hours that you work each fortnight will determine the number of hours of care for which you can claim the Child Care Subsidy. ‘Activity’ encompasses many things including:

Work (including self-employment)
Training
Study
Recognised voluntary work
Unpaid work in a family business
Looking for work

The Bill introduces some changes to the Activity test for First Nations children.

Income test

The amount you will contribute is based on your family’s combined income, with increased income resulting in a smaller subsidy. The below graph shows how the subsidy changes by reference to income - comparing the existing CCS rates with the proposed CCS rates.

(Source: Child Care Subsidy Changes, briefing note, Australian Parliament)

Extra subsidies for additional children

At the beginning of the 2022 calendar year, the Morrison Government announced a change to the CCS so that families with more than one child can receive a higher subsidy for the each additional child enrolled in care. The higher subsidy rate works out as a 30% increase on the family’s income tested rate, up to maximum of 95% of the daily rate. These reforms are being retained as part of the new CCS package.

Hourly caps

The CCS is administered on an hourly basis, and families are capped at claiming the rebate for 50 hours per week. If you child attends more than 50 hours per week and/or your centre is open for more than 50 hours a week, you may pay the full hourly rate on hours of care over 50 hours, however many centres offer families the option of electing to attend either a 10, 11 or 12 hour session, and be billed accordingly. At present, the hourly cap rate is $12.74.

How do I claim?

Applications are done through your MyGov account - head to the Centrelink section and select the ‘Payment and Claims’ option. The Child Care Subsidy is under the ‘Families’ heading. You’ll need to answer questions and supply documents in relation to your income, activity levels and residency status, amongst other things. Once your claim is submitted you can track it on My Gov.