BY HEJIRA CONVERY, KINDICARE

JUNE 24 2023

The government’s Cheaper Child Care plan has been promised for some time and we’re excited to report that the wait is almost over!  

From 10 July 2023, the Child Care Subsidy (CCS) is changing, making childcare fees more affordable for most families.  

If you’re already getting the CCS, then you don’t need to do anything – except quickly check that your family income estimate is up-to-date. 

Services Australia will work out your new subsidy rate based on this and automatically apply it once cheaper childcare kicks off. 

You’ll get correspondence from them confirming your new CCS rate, and your childcare service will also be able to answer any questions you have.  

However, because the CCS changes are BIG news (and also GREAT news!), here’s a summary of what’s happening from 10 July, and how the changes will affect you. 

 

The maximum amount of CCS is rising from 85% to 90%.  

Currently, families earning up to $72,466 per year get a maximum CCS rate of 85%. 

However, from 10 July 2023, families earning $80,000 or less will get a maximum CCS rate of 90%.  

If your family earns more than $80,000 and less than $530,000, your CCS rate will go down by 1% for every $5,000 of income your family earns, and you’ll either get more subsidy or see it stay the same.  

Some high income families will be newly eligible for the CCS. 

At the moment, families earning $356,756 or more per annum attract a CCS rate of 0%, which means the government doesn’t chip in for their childcare fees. 

However, from 10 July 2023, the income limit for CCS is rising to $530,000, so if your family earns between $356,756 and $530,000 per year, you may soon be joining the ranks of those with a helpful CCS rate! 

If you haven’t claimed the CCS before, now’s a good time to check your eligibility and put in a claim for CCS if you tick all the boxes. 

The government says, ‘If you make a claim and it’s assessed before 10 July 2023, you may be assessed at 0% if your income is over $356,756. Your new rate of CCS will automatically apply to you from 10 July 2023.’ 

If you have already been assessed for CCS at a 0% rate, then simply check that your family income estimate is current, so the government can calculate your new-and-improved CCS rate and apply it from the 10th.  

The higher subsidy for second and younger children in care still applies. 

If you have more than one child aged five or under in care, then the government recognises that you need extra help to pay for those duplicate (or triplicate) fees! 

Services Australia pays a higher CCS rate for second and younger children in care, and from 10 July 2023, the maximum rate for them will still be 95%.  

However, income bands are changing and two separate income tests will be used to work out individual children’s rates: 

• Your ‘standard rate child’ (usually your eldest CCS-eligible child aged five or under) will get the standard CCS rate for your family (e.g. a 90% subsidy rate if your family earns $75,000 per annum). 
  
  

• While, your ‘higher rate child’ (your second or younger child/ren aged five or under) will get the higher CCS rate for second and younger children. 

From 10 July 2023, the CCS rates for second and younger children are being calculated like this:  

• If your family earns $0 to $138,118 per annum, the rate is 95% 
   
• If your family earns more than $138,118 and less than $183,118, the 95% rate goes down by 1% for every $3,000 of income your family earns 
   
• If your family earns $183,118 to below $262,408, the rate is 80%
  
  
• If your family earns $262,408 to below $352,408, the 80% rate goes down by 1% for every $3,000 of income your family earns 
   
• If your family earns $352,408 to below $362,408, the rate is 50%. 
   
• If your family earns $362,408 or more, your second and younger children will attract the standard CCS rate for your family, like your first child does.  

 
Hourly rate caps for different service types are going up.  

The government applies your CCS percentage to your service’s hourly rate cap OR the hourly fee your service charges you (whichever figure is lower); and from 10 July 2023, the hourly rate caps for different service types are changing: 

• Centre-based day care (long day care and occasional care) will have an hourly rate cap of $13.73 for children below school age, and an hourly rate cap of $12.02 for school-aged children
  
  
• Outside school hours care will have the same two hourly rate caps as centre-based day care - $13.73 and $12.02 respectively
  
  
• Family day care will have an identical hourly rate cap for both of its age groups - $12.72 for children below school age and $12.72 for school-aged children, and  
  
  
• In Home Care (per family) will have the same hourly rate cap for both of its age groups - $37.34.  
  

So, for example, if your four-year-old is attending long day care, and the service charges you $12 per hour for their care, the government will apply your family’s CCS percentage to this $12 per hour figure, rather than the long day care’s hourly rate cap of $13.73 per hour. 

The CCS activity test is changing for families with First Nations children. 

From 10 July 2023, Aboriginal and Torres Strait Islander children can get at least 36 hours of CCS per fortnight, regardless of what their family earns or how much activity they do, and there’s further info here.  

The low income limit for Additional Child Care Subsidy Transition to Work is rising. 

If you get Additional Child Care Subsidy (a payment on top of the CCS), your rates will stay the same from 10 July 2023. 

However, there will be a change to the low income limit for Additional Child Care Subsidy Transition to Work. 

Currently, your family needs to be earning less than $72,466 per annum to be eligible for this extra subsidy, but from 10 July 2023, this figure is increasing to $80,000 to help more people pay for childcare while transitioning from income support payments to work.  

All in all, childcare will be cheaper for most families under the new system.  

We hope your family budget gets a real boost from next month, and whether you’re celebrating for yourself or for society, bring on July 10!