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Child care support - the three main elements

Three main elements make up the Australian Government's child care support system:

  1. Child Care Subsidy
  2. Child Care Safety Net
  3. Child Care Subsidy System.

The first two elements are forms of financial assistance, and the third is the system that supports the administration of this financial assistance. Each element is described in more detail in the following sections.

1. Child Care Subsidy

Child Care Subsidy is the regular payment that assists most families with the costs of child care. Child Care Subsidy will be paid directly to providers in most cases, to be passed on to families as a fee reduction. (It will reduce the fees that a family pays a child care provider for the care of their child).

Three main factors will determine a family's level of Child Care Subsidy. These are:

  • Family income - the combined adjusted taxable income of parents/guardians
  • Activity test - the participation activity level of the parents/guardians
  • Hourly rate caps - that apply to the type of child care service and age of the child.

Information for families

Centrelink Payment and Service Finder - to estimate what the Child Care Subsidy might be and assess eligibility for other support payments.

Child Care Finder - for information about children's services, including early learning and child care services, costs and vacancies.

my.gov.au - to create and then access a Centrelink online account, to make Child Care Subsidy claims and view the status of claims.

2. Child Care Safety Net

The Child Care Safety Net provides targeted assistance to vulnerable and at-risk children and their families. It also supports child care services in disadvantaged communities to address barriers in accessing and participating in early learning and care.

The Safety Net has a number of components:

Additional Child Care Subsidy

This provides a higher level of subsidy to support:

  • families who require practical help to support their children's safety and wellbeing
  • grandparents on income support who are primary carers
  • families experiencing temporary financial hardship
  • parents transitioning from income support to work.

Community Child Care Fund

Under this fund, eligible child care providers are able to apply for supplementary funding through a grants program to:

  • reduce the barriers in accessing child care, particularly for disadvantaged or vulnerable families and communities
  • provide sustainability support for child care services experiencing viability issues
  • provide capital support to increase the supply of child care places in areas of high unmet demand.

Inclusion Support Program

This program helps early learning and child care providers to build their capacity and capability to include children with additional needs in mainstream services - providing them with an opportunity to learn and develop alongside their typically developing peers.

3. Child Care Subsidy System

Approved providers of early learning and child care services will interact with the Australian Government mainly through the Child Care Subsidy System - via either:

  • software from a registered third-party provider, or
  • The Provider Entry Point (the interface designed for providers to submit and receive data, notifications and reports).

The elements of the Child Care Subsidy System are set out in Figure 1 below.

 

Summary of access to the Child Care Subsidy System for child care providers (via PRODA) and families (via Centrelink)

Figure 1: Summary of access to the Child Care Subsidy System for child care providers via Digital Access (PRODA) and families (via Centrelink)

The Child Care Subsidy System provides a simple and easy user interface for families and child care providers. It is designed to simplify, streamline and automate the administration of child care payments and programs, and to support compliance with the legislation.

A number of commercial software companies have developed software that interacts with the Child Care Subsidy System. While providers are not obliged to use registered third-party software, this may offer additional functionality beyond that built in to the Provider Entry Point, such as rostering and room management, invoicing, vacancy management, payroll management and advanced reporting and statements.

The Provider Entry Point enables providers to apply for approval under Family Assistance Law and directly access information such as amounts of subsidy paid, debts owing and other basic information needed to prepare Statements of Entitlement for families. The Provider Entry Point also has the basic functionality to enable a child care service to send government information required to administer the Child Care Subsidy, including submitting notices and reports such as change in circumstances, enrolment notices, session reports, and applications for Additional Child Care Subsidy (child wellbeing).

The decision to use third-party software is a business decision for each provider. List of approved registered third-party software providers (www.docs.education.gov.au).

Providers will receive advice and notifications about family entitlements and the subsidies paid through the Child Care Subsidy System. Providers will also be notified if they are not meeting their obligations and deadlines or other conditions of their approval.

Families claiming Child Care Subsidy will be able to see and review the information being given by providers about their entitlements and will receive periodic notifications so they can check if information relating to their children's care is correct. Families can access the Child Care Subsidy System through their Centrelink online account.