New child care package

From 2 July 2018, there will be a new child care package. The package will mean that child care will be more affordable for most Australian families.

Child Care Subsidy

The package includes a new Child Care Subsidy, which replaces the current Child Care Benefit and Child Care Rebate. It will be paid directly to services to reduce the out-of-pocket cost for most families.

Use the Family Child Care Subsidy Estimator to find out what it means for your family.

Families earning less than $185,710^ will no longer be subject to a cap on the amount of subsidy they can access.

The subsidy for families earning above this, up to $350,000^, will be capped at $10,000^ per year, per child.

Three things will determine a family's level of Child Care Subsidy:

1. Combined family income

A family's income will determine the percentage of Child Care Subsidy for which they are eligible for, with more financial support available to lower income families.

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 Nil

^ These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.

* Subsidy rate of actual fee charged or the maximum hourly rate cap

2. Activity level of parents

The number of hours of subsidised care families can access will be determined by an activity test. The higher the level of activity, the more hours of subsidised care families can access, up to a maximum of 100 hours per child per fortnight.

In families with two parents, the parent with the lowest hours of activity will determine the hours of subsidised care.

Maternity leave will be treated as if you are at work and is included for the activity test.

3. Type of child care service

The new Child Care Subsidy is also based on the type of child care your family accesses subject to an hourly rate cap:

  • Centre-based care – $11.55^ per hour
  • Family day care – $10.70^ per hour
  • Outside school hours care – $10.10^ per hour

The Child Care Safety Net

The new child care package includes a Child Care Safety Net to ensure that children in Australia's most vulnerable families and communities have the opportunity to access quality early learning and child care.

Next steps

The current arrangements don't change until 2 July 2018. More information about what families need to do to prepare for the change will be available in early 2018.

However you can use the Family Child Care Subsidy Estimator now to find out what it means for your family.