Childcare changes: Government releases new income brackets and registration requirements

PARENTS are being warned to register before July 2 to get childcare subsidies under the government’s new system. Income brackets have also been updated.

CHANGES to the childcare sector will begin soon and parents are being warned that they need to register if they want to continue getting government subsidies.

The Turnbull Government’s overhaul of the childcare and early learning sector will start on July 2 and parents who have not registered will lose access to their payments.

The government has also updated the income brackets to reflect Consumer Price Index changes.

Parents can use an online calculator to estimate the amount of money they can get back from their childcare fees.

Education Minister Simon Birmingham said it was time for families to “make the switch” to the new system.

Parents are being encouraged to go to the government’s online portal, where they will be asked about their income, working hours and the type of services they are using.

“The switchover to the new childcare and early learning system is not automatic as we need families to update their details and provide new information,” Mr Keenan said.

One of the biggest changes impacting parents as part of the Turnbull Government reforms is that families earning up to $186,958 will no longer be limited to a cap of $7613 per year in subsidies for childcare.

But both parents will have to work, study or volunteer for at least eight hours a fortnight to be eligible for the new subsidy.

Here is what’s changing.

CURRENT PAYMENTS WILL BE SCRAPPED

The Child Care Rebate (which covers 50 per cent of childcare fees up to an annual cap of $7500) and the means-tested Child Care Benefit will be replaced with the new subsidy.

YOU HAVE TO REGISTER FOR THE NEW SUBSIDY

Most importantly, you have to register online at www.education.gov.au/childcare before July 2 to get the new payments.

While Mr Birmingham has previously told ABC some grace periods would be applied and people can potentially have some payments backdated, it’s probably best not to rely on this.

Both parents will have to work to satisfy the activity test for the new subsidy. They have to work, study or volunteer for at least eight hours a fortnight.

If you don’t work enough, you will still get 24 hours of childcare a fortnight if you earn less than $66,958.

If your family’s income is more than $66,958 but you don’t meet the activity test, you don’t get any childcare subsidy.

You will also have to answer questions about the age of your children. Only those aged under 13 years will be eligible for the childcare subsidy.

Those who are younger but already attend high school will be asked to prove their child can’t be left alone and there is nobody aged over 18 who can care for them.

Australian Prime Minister Malcolm Turnbull (centre) speaks to children during a visit to the Teenie Weenies Learning Centre in Panania. Picture: Brendan Esposito/AAP

HOW MUCH YOU GET BACK COULD CHANGE

The income brackets used to calculate subsidies, which were released last year, have been increased to reflect CPI changes.

For families earning $66,958 or less, you will have 85 per cent of your childcare fees covered by the government.

The subsidy gradually tapers down to 50 per cent once you are earning $171,958.

For those earning between $171,958-$251,248, you will get 50 per cent of your childcare fees covered by the government.

For those earning between $251,248-341,248, the subsidy will taper down to about 20 per cent.

Anyone on more than $351,248 will not get any subsidies.

BUT IT ALSO DEPENDS HOW MUCH YOUR CENTRE CHARGES

You may not get exactly the amounts suggested above because subsidies are calculated at a set hourly rate and if your childcare centre charges more than this, you’ll have to cover the difference.

The government has set a maximum hourly rate of $11.77 for centre-based daycare services, $10.90 for family day care and $10.29 for outside school hours care.

THERE IS A CAP ON HOW MUCH YOU CAN CLAIM

These caps have also been updated to reflect CPI.

There is no annual cap on subsidies for families on $186,958 and under.

Those earning more than $186,958 will only be able to claim $10,190 per child.

There will be a bonus subsidy for disadvantaged families, such as those with children at risk of abuse or neglect; those experiencing temporary financial hardship; and grandparent carers on welfare.

Are you confused by any of the changes? Got any questions you would like answered about your personal circumstances? Email them to [e-mail]

Originally published as Childcare changes: Government releases new income brackets and registration requirements