New Child Care Package Commences on 2 July 2018
The package includes a new Child Care Subsidy, which replaces the current Child Care Benefit and Child Care Rebate.
For most families (i.e. those earning $185,710 or less) there will no longer be an annual cap on the amount of subsidy you can receive. For families earning more than $185,710 and up to $350,000, an increased annual subsidy cap of $10,000 per child, per year will apply.
This table shows the percentage of child care fees the Government will contribute based on a family’s combined income:
|Combined family income||Subsidy rate|
|Up to $65,710||85%|
|Over $65,710 to under $170,710||Gradually reducing to 50%|
|$170,710 to under $250,000||50%|
|$250,000 to under $340,000||Gradually reducing to 20%|
|$340,000 to under $350,000||20%|
|$350,000 or more||0%|
It also subjects to activity test and service test.
Because some families are unable to estimate their income accurately, 10 per cent of your weekly Child Care Subsidy entitlement will be withheld. Following reconciliation, if you haven’t received enough Child Care Subsidy based on your adjusted taxable income, you will receive a lump sum payment. Parents nominate a bank account to receive any lump sum payments. If you have been paid too much Child Care Subsidy, you will have a debt to repay.
So it is crucial to have your tax return lodged on time with ATO for Centrelink to receive your actual combine family income and calculate the actual benefit you’ve entitlement to. If you require assistance, please get in touch.