New Child Care Package – Frequently asked questions

What if my child is absent from child care?

Families will continue to be entitled to 42 absence days per child, per financial year, and may be entitled to additional absence days in certain circumstances (including illness of the child, a parent or sibling). Under the Child Care Subsidy, when a child does not attend care on a day they are scheduled to attend, providers are able to claim an absence for the child up to 42 times in a financial year, so long as on the day the absence is claimed, Child Care Subsidy would have been claimed (i.e. the child would have otherwise been in care, and the family hasn’t already reached their fortnightly entitlement of subsidised hours based on their activity test result). In shared care arrangements, the allocation of 42 absences per financial year relates to the child, not each individual claimant.

Can child care services stop charging fees when children are absent?

Fee charging practices are commercial decisions made by child care services and are not a matter regulated by the Family Assistance Law. Families will continue to be entitled to 42 absence days per child, per financial year and additional absences in certain circumstances (including illness of the child, a parent or sibling).

Will there be any changes to the work test? 

Yes, there is a new three step activity test. The activity test is determined at the family level. In a two parent family, both parents must meet the activity test and the person with the lower number of hours will determine the relevant step of the activity test. In a sole parent family, the sole parent must meet the activity test.

The Department of Human Services will be in touch with families from around April 2018 to ask you to update your income estimate and provide details about your activity. This information will be used to calculate your Child Care Subsidy percentage. You will not have to fill in a new claim form, unless you are a family using child care for the first time.

What is an activity? 

There are a range of activities that meet the activity test: paid work (including leave), study and training, unpaid work in a family business, looking for work, volunteering, self-employment, and other activities on a case by case basis. You can also include reasonable travel time to and from your place of activity to your child care centre.

How do I prove how many hours I work, study or volunteer?

Parents self-declare their activity to the Department of Human Services (DHS) and no evidence is required at the time you self-declare. This is generally done just prior to a new financial year, when you provide your income estimate for the coming financial year. DHS might ask some parents to provide evidence as part of their normal random spot checks. Evidence could include, for example, a copy of a payslip or a letter from the organisation where you volunteer. Parents can change or update their activity test details whenever they need to. This will be done via your myGov account, including via an app on your smartphone.

What if I work irregular work hours?

If you work irregular hours you can estimate the number of hours you work per fortnight over a three-month period. You can include a reasonable amount of time to travel to and from the child care service to your place of activity, if you need to. Your estimate should be for the highest number of hours you might require, even if you don't require those hours every day. This gives you the flexibility to pick up additional hours of work and know that care will be available. If your irregular hours change that's okay as you can update them whenever you need to. You will do this via your myGov account, including via an app on your smartphone.

Is looking for work considered an activity?

Actively looking for work is a recognised activity. If it's the only activity you do, you will meet the first step of the activity test (36 hours of subsidised child care per child, per fortnight). You can combine actively looking for work with another recognised activity such as an approved study course to receive further hours of subsidised child care.

How do I calculate my study hours to meet the activity test?

When calculating study hours (part-time or full-time), include course contact hours, study outside course contact hours, and breaks such as term breaks. You will need to undertake at least eight hours of study per fortnight to be entitled to 36 hours of subsidised child care per child, per fortnight.

My activity levels will change regularly. How do I update this information?

You can change or update your activity test details whenever you need to. You will do this via your myGov account, including via an app on your smartphone. Updating your details whenever they change will help you avoid getting a debt.

How will being on Parenting Payment Partnered affect my activity level?

If you are on Parenting Payment Partnered, and the only activity you undertake is meeting your mutual obligation requirements under that payment, then your entitlement will be 36 hours per fortnight. You can also combine your mutual obligation activities with other activities, such as volunteering, to be entitled to more hours of subsidised care. If you have an exemption from mutual obligation requirements, then you will be entitled to 100 hours per fortnight.

Do I need to do additional activity if I am on Carer Payment or Carer Allowance?

If you are on Carer Payment your activity test result will be 100 hours per fortnight. If you are providing constant care for someone but don't qualify for Carer Payment, because of the income or assets test requirement, your activity test result will also be 100 hours per fortnight.

As a Carer Allowance recipient you will meet the activity test and have an automatic entitlement to 72 hours per fortnight. This can be increased to 100 hours per fortnight if combined with another recognised activity.  If you have a partner, they will also need to meet the activity test, and the hours of subsidised care per fortnight you will be entitled to as a family, will be based on whichever of you has the lower activity level.

Do grandparents with a disability need to meet the activity test?

Grandparents who are the primary carers for their grandchildren are exempt from the activity test.

Is parental leave considered an activity? 

If you undertake paid work, and paid or unpaid parental leave is a condition of your employment (as an employee or contractor), then this is considered to be part of your paid work. The hours of activity will be the same as what they were immediately prior to you commencing parental leave but it needs to be at least eight hours per fortnight. So, if you were working part-time or full time, then you are still considered to be a part-time or full-time employee while you are on parental leave. This is the same as the current system.

Is looking after my own children considered an activity?

Looking after your own children at home does not count as an activity.

Does being on sickness benefit impact on the activity test?

Depending on what type of sickness benefit you receive, this may qualify as meeting the activity test.

Is travel time considered an activity? 

You can include a reasonable amount of travel time to and from the child care service to your place of work, study or other recognised activity.

I'm a teacher. Does the work I do at home count towards my activity hours? 

If you are a teacher, school holidays count as they are part of your conditions of employment. Planning lessons at home would be considered to be part of your normal requirements and wouldn't count as extra activity hours.

Is working in a family business a recognised activity? 

Yes. Working in a family business owned by a member of your immediate family such as your partner, your parent or your parent's partner, a sibling, one of your adult children or their partner, or another person as determined by the Department of Human Services, is a recognised activity.

What is approved study?

An approved course of study means a secondary or tertiary course. The study activity requirements will include:

  • level two (Certificate II) to 6 (Advanced Diploma, Associate Degree)

  • level 8 (Bachelor Honours Degree, Graduate Certificate, Graduate Diploma)

  • level 7 (Bachelor Degree)

  • a secondary course or preparatory course.

Is being self-employed a recognised activity?

Being self-employed is a recognised activity, as is setting up a business (for a maximum of six months).

Is volunteering a recognised activity?

Yes. The definition of voluntary work is activities which could be expected to improve your work skills or employment prospects (or both); voluntary work for a charitable, welfare or community organisation; or voluntary work for a school, preschool or centre based day care service, if the work directly supports the learning and development of the children at the school, preschool or service.  For example, participating in a reading program would be a recognised activity, but being on the Parents and Citizens Committee, or working in the school canteen, are considered parental dutys and would not be considered a recognised activity.

If volunteering is your only activity you will be eligible for the first step of the activity test (36 hours of subsidised care per fortnight).

Is coaching my child's football team considered a volunteer activity? 

As coaching is undertaking a parental role, it is not considered as a volunteer activity.

What support is available for families with children who are/may be at risk?

Families in these circumstances may be able to access the Additional Child Care Subsidy, subject to individual circumstances. This includes Child Wellbeing or Temporary Financial Hardship subsidy.

Will Additional Child Care Subsidy cover all my fees?

Additional Child Care Subsidy (Child Wellbeing) will be equal to 100 per cent of your actual fees up to 120 per cent of the relevant hourly rate cap. Or, for Additional Child Care Subsidy (Transition to Work), it will cover 95 per cent of your actual fees, up to 95 per cent of the relevant hourly rate cap. Families who are transitioning from income support to work by engaging in work, study or training activities and have a Job Plan in effect will be supported by Additional Child Care Subsidy (Transition to Work).

Is there a time limit for eligibility for the Additional Child Care Subsidy?

There is no time limit for Special Child Care Benefit 'at risk' now, and there will be no time limit for Additional Child Care Subsidy (Child Wellbeing). There is currently a time limit of 52 weeks for Special Child Care Benefit 'temporary financial hardship'. Under the Additional Child Care Subsidy (Temporary Financial Hardship) payment, the limit will be 13 weeks for each circumstance.

I am currently on Jobs, Education and Training Child Care Fee Assistance (JETCCFA). Is it still going to be around? 

Yes, the payment Additional Child Care Subsidy (Transition to Work) will be similar to Jobs, Education and Training Child Care Fee Assistance and will support families who are transitioning to work from income support.

Transition to work means transitioning from an income support payment to work by engaging in work, study or training activities.

What will happen to Special Child Care Benefit?

All Special Child Care Benefit payments will cease at 1 July 2018. From the commencement of Additional Child Care Subsidy on 2 July, approved child care providers may give a certificate (for up to six weeks) for a child identified as ‘at risk’. If a child continues to be ‘at risk’ for more than six weeks, then the provider may make an application for a determination which will be assessed by the Department of Human Services. Applications for determinations and subsequent determinations are approved by the Department of Human Services in up to 13 week blocks. These processes will be managed via the new IT system.

What will happen to the current $7,500 yearly limit? 

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.

Why is the current system changing? 

The system is changing because it was largely designed to meet the needs of a different era, and needs improving to make it more affordable, flexible and accessible for parents.

How will the transition occur between the current Child Care Benefit and Child Care Rebate and the new Child Care Subsidy? 

For the most part this will be an automatic process that you won't have to worry about. The Department of Human Services will be in touch with families from around April 2018 to ask you to update your income estimate and provide details about your activity. This information will be used to calculate your Child Care Subsidy percentage. You will not have to fill in a new claim form, unless you are a new family using child care for the first time.

What happens with my current child care fees? 

There are no changes to arrangements for the current financial year 2017-18. The new Package commences 2 July 2018.

Will parents/guardians be notified of any changes to fees? 

Your service will tell you if there are any changes to your fees. To determine how much Child Care Subsidy you may be eligible for, please visit the Family Child Care Subsidy Estimator – education.gov.au/childcare

I already receive Child Care Benefit. Do I need to apply for the new subsidy?

You will not have to fill in a new claim form, unless you are a new family using child care for the first time. The Department of Human Services will be in touch with families from around April 2018 to ask you to update your income estimate and provide details about your activity. This information will be used to calculate your Child Care Subsidy percentage.

What are the responsibilities of the child care centre around the new Package?

The obligations on child care providers are set out in the Family Assistance Law. The Department of Education and Training is providing information to child care providers about what they need to do to transition to the new arrangements. This will include information to help them answer questions from families.

Will centres be ready to implement the new Package?

Yes. Transition to the new arrangements has already commenced and the Department of Education and Training is working very closely with the sector to ensure a smooth implementation.

How will I know how much subsidy has been paid for my child? 

Child care providers are required to give you a fortnightly statement of how much care you have received and how much subsidy has been paid on your behalf. Your myGov account will also contain this information.

Will we need to tell the child care service about our income? 

No. The Department of Human Services will be in touch with families from around April 2018 to ask you to update your income estimate and provide details of your activity. This information will be used to calculate your Child Care Subsidy percentage.

What if I don’t have a myGov account? 

You are encouraged to create a myGov account before 2 July 2018. The Department of Human Services will be in touch with you before then.

How does the new subsidy affect the current Family Tax Benefit A and B? 

The introduction of the Child Care Subsidy will not impact your Family Tax Benefit. If you are currently receiving Family Tax Benefit, you’ll continue to receive this as long as you’re eligible. For queries about your Family Tax Benefit payments see humanservices.gov.au/individuals/services/centrelink/family-tax-benefit.

Will there still be a family payment on top of the subsidy? 

Yes, for a payment and service finder for all current payments, check the Department of Human Services website.

How is income calculated and what if it changes during a financial year? 

Your Child Care Subsidy percentage will be based on your estimated combined annual family income. Your actual subsidy entitlement will be worked out at end of year reconciliation when your actual adjusted taxable income is known (after you have lodged your tax return). The easiest way to estimate your income is to base it on your previous year's tax return as well as any expected pay rises. 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.

On which financial year are the income thresholds based? 

The income thresholds will be based on the 2018-19 financial year.

Is superannuation considered family income? 

To find out more about what this includes, go to ato.gov.au and search for Adjusted Taxable Income or visit www.ato.gov.au/individuals/lodging-your-tax-return/in-detail/what-is-income-/.

Are Centrelink payments part of my income? 

Yes, they need to be taken into account when you estimate your combined annual family income.

What income should I put in the estimator, my income from last year or what my salary is now?

You should put current salary in, if this is what you estimate your salary will be for the whole year. Don't forget to include your partner's salary, if you have one, as it is calculated based on combined annual family income. 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; if you have been paid too much Child Care Subsidy, you will have a debt to repay.

Is child support considered family income? 

Entitlement to the Child Care Subsidy is based on your estimated combined annual family income. To find out more about what this includes, go to ato.gov.au and search for Adjusted Taxable Income or visit www.ato.gov.au/individuals/lodging-your-tax-return/in-detail/what-is-income-/.

How do I estimate my yearly income when I work odd hours? 

Your Child Care Subsidy percentage will be based on your estimated combined annual family income. Your actual subsidy entitlement will be worked out at end of year reconciliation when your actual adjusted taxable income is known.

The easiest way to estimate your income is to base it on your previous year's tax return as well as any expected pay rises. 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. If you have been paid too much Child Care Subsidy, you will have a debt to repay.

Can I overestimate my income to ensure I have no debt?

Yes.

How does salary sacrifice impact on the child care subsidy? 

To be eligible for Child Care Benefit and Child Care Subsidy, families must also be liable to pay for care provided. You must be the one responsible for your child care costs. If your employer contributes to your child care through salary sacrificing or packaging, you should discuss with them who is responsible for the cost. The issue of liability depends on who is obligated to pay for the child care fees.

If you salary sacrifice the cost of child care fees so that your employer has the legal liability to pay the fees (and not you), you are not eligible for Child Care Benefit or Child Care Subsidy for the child care costs paid under your agreement. Payment of child care fees by an employer is only exempt from fringe benefit tax if the employer is legally liable for the fees. If you are not sure who is legally obliged to pay the fees, you will need to clarify this with your employer.

Is a child with a disability eligible for an Additional Child Care Subsidy? 

The Additional Child Care Subsidy (Child Wellbeing) is for children who are at risk of serious abuse or harm. Being disabled does not qualify someone for Additional Child Care Subsidy (Child Wellbeing) unless the child is also 'at risk'.

If I am on a Disability Support Pension, am I exempt from the activity test? 

Yes, if you are on Disability Support Pension you will be exempt from the activity test and eligible for up to 100 hours of subsidised care per fortnight.

How is disability defined?

Being a person with a disability means that you are receiving Disability Support Payment, an invalidity service pension, or are someone who has been diagnosed by a registered medical practitioner as impaired to a significant degree and is unable to work.

How is the subsidy calculated for families with more than one child in care?

The percentage of Child Care Subsidy a family is entitled to will be based on combined annual family income and will be applied on a per child basis, regardless the number of  children in a family or their age.

While the Child Care Subsidy will not include different rates and complex loadings to provide greater assistance to families with multiple children, it will be better targeted and provide more assistance for low and middle income families in relation to all children.

If my child is in secondary school, but is only 12, will I be eligible for the subsidy? 

To be eligible, your child must be 13 or under and not attending secondary school. Exemptions to this are currently being considered, for example, where the child has a disability and cannot reasonably be left alone.

Our income is above $185,710. How will the new package benefit us?

For families earning between $185,710 and $350,000, there will be an increase in the annual subsidy cap to $10,000 per child, per year.

I work full time but my partner doesn’t do any paid work. What will we be eligible for?

In a two parent family, both parents must be undertaking activities, or have an exemption, to be eligible for the Child Care Subsidy.

How does shared care of my children affect my eligibility? 

If you pay the fees on your own, then your subsidy will be based on your income estimate and hours of activity. If you have a shared custody arrangement and you share the child care fees, then each parent will be assessed separately and both of you can claim up to your fortnightly limit of hours. It is expected that you would only use the hours of subsidised care between you that you need, not the combined total of your separate assessments.

Can I get more than 100 hours of subsidised care?

The maximum hours of subsidised care is 100 per fortnight, per child, which is the same as the current arrangements for Child Care Benefit/Child Care Rebate. Your balance will reduce over the fortnight as you use child care and you will have to pay full fees for any hours over your set amount. Your fees and the subsidy will be based on the length of the sessions you agree with your child care service. Services will have the flexibility to offer shorter sessions of care to cater for the needs of their communities.

If I earn over $350,000 should I still apply? 

If you earn over $350,000, you may not be eligible for Child Care Subsidy. The Government is committed to helping families who are most in need of financial support. That is why the Child Care Subsidy will be better targeted and provide more assistance for low and middle income families in relation to all children. Families with a combined annual family income of $350,000+ may not be eligible for the Child Care Subsidy. However, you may be eligible for the Additional Child Care Subsidy.

While the legislation introduced by the Government included a 20 per cent subsidy for families on incomes of $340,000 and above, a cross-bench amendment removed subsidies to the 1.2 per cent of families using child care and earning incomes of $350,000 and above. 

How is my entitlement to the new subsidy calculated? 

The Department of Human Services will calculate your entitlement based on the information you will provide to them about your combined annual family income, activity hours and type of service you use. If there are other circumstances relevant to you, they will need information about this as well.

How do I find out if I will be out of pocket? 

You can see the estimate breakdown for each child including your out of pocket costs when you click on the option 'FOR MORE INFORMATION ABOUT YOUR CHILD CARE SUBSIDY CLICK HERE'.

Is the calculation in the estimator per child, or a total of your child care entitlement? 

The estimate result is for all children in your family per fortnight. You can see the estimate breakdown for each child including your out of pocket costs when you click on the option 'FOR MORE INFORMATION ABOUT YOUR CHILD CARE SUBSIDY CLICK HERE'.

How accurate is the online estimator?

The Child Care Subsidy Estimator is designed to give you an idea of how much Child Care Subsidy you could expect to receive when it commences on 2 July 2018. The estimate will be based on the information you provide. If any information is incorrect, the estimate will also be incorrect.

When using the estimator, you can see the estimate breakdown for each child, including the 10 per cent withholding and your out of pocket costs, when you click on the option 'FOR MORE INFORMATION ABOUT YOUR CHILD CARE SUBSIDY CLICK HERE'.

Will full-time grandparent carers be entitled to access subsidised child care? 

Being the principal carer of your grandchildren means that you look after them for at least 65 per cent of the time and you have substantial autonomy for the day-to-day decisions about the child's care, welfare and development.

Grandparents on income support, who are the principal carers for their grandchildren, will have access to subsidised care through Additional Child Care Subsidy (Grandparents). The subsidy will be equal to 100 per cent of the actual fee charged up to 120 per cent of the relevant hourly rate cap, for up to 100 hours of subsidised care per fortnight.

Grandparents who are the principal carer and who are not on income support will be exempt from the activity test (and able to access up to 100 hours of subsidised care per fortnight). However, their subsidy percentage will be determined by their income.

What if my child is looked after by a grandparent during the day but lives with me? 

To be eligible for the Additional Child Care Subsidy (Grandparent) payment, the grandparent needs to be the principal carer of the child and receive income support. This means having at least 65 per cent of the daily care of the child and being responsible for day-to-day decisions about the child's wellbeing.

The Child Care Subsidy is for care delivered by approved services, not informal care provided by family members.

How do hourly rate caps work?

If your service charges a daily fee, the hourly rate will be determined by dividing the daily fee by the hours the service operates. Your service will tell us their standard session fees and how long the session is, and we will use the hourly rate cap to help us calculate how much to pay; just like Child Care Benefit is currently worked out on an hourly rate (around $4.30 per hour).

Is the rate cap the same for standard and non-standards hours? 

Yes. The hourly rate cap will apply to all hours of child care.

Why is Family Day Care hourly rate allowance different to Long Day Care?

The hourly rate cap varies across service types to reflect differences in fees currently charged and operating costs.

Does the hourly rate cap get indexed? 

Yes.

Are the maximum hours of subsidy per child or per family? 

The maximum hours of subsidy are per child.

Will there be changes to the immunisation requirements?

No. The existing immunisation requirements will continue to apply.

What is happening with the Nanny Pilot Programme and In Home Care?

The new arrangements will reset the current In Home Care program, and replace the Nanny Pilot Programme, with IHC Support Agencies to service each state and territory to distribute places to Child Care Subsidy approved services. 

The revised In Home Care program will be delivered through a brokerage model of support agencies that will advocate for families, particularly those with complex and challenging circumstances, and help them find care that meets their needs. Support agencies will work with families to regularly review their continued need for In Home Care and, where appropriate, help them find suitable alternatives.

What if I’m an Australian resident working or studying overseas?

If you are temporarily absent from Australia, you have an exemption from meeting the activity test for a period of up to six weeks. You are entitled to 100 hours of subsidised child care per fortnight during this period.

There is provision to extend the six-week period for individuals who are members of the Australian Defence Force or Australian Federal Police and who are deployed overseas, assisted by the Medical Treatment Overseas Program, or unable to return to Australia for a specified reason (such as a serious accident, or natural disaster). 

The percentage of subsidy you will be entitled to is based on your estimated combined annual family income (for the financial year 2018-19).

How do the changes affect New Zealanders living in Australia?

If you’re a New Zealander living in Australia, you may be eligible for the Child Care Subsidy if you (or your partner) meet the residency requirements. Check your residency status on the Department of Human Services website at humanservices.gov.au/individuals/enablers/residence-descriptions.

Is parental leave considered an activity? 

If you undertake paid work, and paid or unpaid parental leave is a condition of your employment, then this is considered to be part of your paid work. The hours of activity will be the same as what they were immediately prior to you commencing parental leave. So, if you were working full time then you are still considered to be a full time employee while you are on parental leave. This is the same as the current system.

There is no time limit on the amount of time you can be on unpaid parental leave but there is an expectation that you will be returning to work at some point as a conditions of your employment.

What hours do I put in the estimator to allow for parental leave?

Put the hours you were working right before you commenced your parental leave.

How will the new subsidy be paid?

The subsidy will be paid directly to your child care service fortnightly, based on the attendance records (session reports) the service submits. You will pay any difference between the actual fee you are charged and the subsidy that is paid on your behalf.

When do we pay the centre for hours the subsidy doesn’t cover?

You will need to discuss this with your child care provider.

When is the subsidy paid to the child care provider? 

Child Care Subsidy will be paid directly to providers in arrears, just the same as they are now, based on attendance records (session reports) they submit. Providers will submit session reports generally within 14 days after the end of the week when care was provided, but they will also be able to submit at any time for payment processing.

Can I get a lump sum payment at the end of the financial year? 

The capacity to make end-of-year lump sum claims will not be available under the New Child Care Package. If you are uncertain about your income estimate, you are encouraged to consider making a claim for Child Care Subsidy. Your Child Care Subsidy percentage will be based on your estimated combined annual family income. Your actual subsidy entitlement will be worked out through an end-of-year reconciliation when your actual adjusted taxable income is known.

The easiest way to estimate your income is to base it on your previous year's tax return as well as any expected pay rises. 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. If you have been paid too much Child Care Subsidy, you will have a debt to repay.

Is my child eligible for the subsidy if they attend preschool?

If you don't meet the activity test and you have a preschool aged child attending preschool in a centre based day care service, you will be exempt. The exemption will only apply for the period of the preschool program and only for the preschool aged child. You would be eligible for the first step of the activity test (36 hours of subsidised care per fortnight).

 

Is community-based preschool subsidised?

This will depend on where the kindergarten program is being delivered. For example, if it is a component of the early education and care offered at a centre based day care centre, then families will be eligible for the Child Care Subsidy. However, under the New Child Care Package, if the service primarily provides only a preschool or kindergarten program (like a standalone preschool), then this program will not attract the new subsidy.

Is Registered Care still available? 

No, registered care is not part of the New Child Care Package.

Why do different services types have different rates?

The hourly rate cap varies across service types to reflect differences in fees currently charged and operating costs.

What happens if I use more than one child care service type?

You'll be able to elect how many of your hours go to which approved service. Approved services will then invoice you for your contribution to the cost of care.

Does the subsidy apply to Vacation care and Outside School Hours Care? 

Yes, it does.

Is there a minimum number of hours I have to use to access the subsidy? 

No, under the new Package there will be no minimum number of hours a child must attend a service.

My child care centre charges a daily rate. How do I work out the hourly rate?

Your service will tell us their standard session fees and how long the session is, and we will use the hourly rate cap to help us calculate how much to pay. Just like Child Care Benefit is currently worked out on an hourly rate (around $4.30 per hour). For example, if you service is open for 11 hours and charges $115.50 per day then the hourly rate is $10.50 ($115.50 divided by 11).

As a child care provider do we need to charge hourly rather than daily? 

Services will not be required to change their charging practices. However, the Government is strongly encouraging services to consider how they can maximise the delivery of flexible and cost effective early learning and child care services. Some services already offer shorter sessions or casual places where there is demand from families. Regulatory changes will make these practices even easier for services to offer. Offering more flexible options is especially important where children are primarily accessing services for early learning outcomes rather than to support families juggling work commitments.

Are child care hours the hours your child is in care, or the hours the service is open?

The Child Care Subsidy is calculated on the hourly fee you are charged. If your centre charges by the day, it will be for a number of hours in that day/session. You will need to find out from your centre the number of hours in the session they charge you for.

I am a Family Day Care educator. Will I have to change my hourly rate? 

No. As a Family Day Care educator, your service should set fees. The hourly rate cap for Family Day Care is $10.70 per hour. This is the maximum amount that the Government will subsidise, it is not the amount that services must charge.

I run a network of Family Day Care centres. Will I be able to claim the subsidy on behalf of my providers?

Yes, the Child Care Subsidy will be paid directly to approved Family Day Care providers in arrears, just the same as they are now, based on attendance records (session reports) the service submits. Family Day Care providers will submit session reports generally within 14 days after the end of the week when care was provided, but they will also be able to submit for payment processing at any time.

How does a service know how much care should be subsided? 

Your child care service submits your attendance records for payment processing. They receive a report with your entitlement details, which allows them to pass on your Child Care Subsidy as a fee reduction.

Who makes sure services are doing the right thing?

The Department of Education and Training has a child care payments compliance program to monitor compliance with the Family Assistance Law by services. Child safety or education concerns can be reported to www.acecqa.gov.au. Fraud can be reported via the tip off line on 1800 664 231.

Will child care services be more flexible?

Services will not be required to change their charging practices. However, the Government is strongly encouraging services to consider how they can maximise the delivery of flexible and cost effective early learning and child care services. Some services already offer shorter sessions or casual places where there is demand from families. Regulatory changes will make these practices even easier for services to offer. Offering more flexible options is especially important where children are primarily accessing services for early learning outcomes rather than to support families juggling work commitments.

What happens if a service charges more than the hourly rate cap?

Fee charging practices are commercial decisions made by child care providers and are not a matter regulated by the Family Assistance Law.

My service charges $8.85 per hour for an eight-hour day. Will they increase it to the $10.70 rate cap? 

Individual child care services will continue to set their own fees. However, the hourly rate caps are designed to help to put downward pressure on fee growth in the future, thereby supporting affordability for parents.

The Government recognises the cost of early learning and child care differs across the range of services provided and geographical locations. This is one of the reasons why the Child Care Subsidy is based on the proportion of the actual fee paid up to a maximum hourly rate cap. This approach is able to better accommodate geographic price differences as fee assistance is more closely linked to parents’ actual child care costs rather than a benchmark price, which may not necessarily reflect their actual costs.

Can I pay only for the hours I use? 

Services will have the flexibility to offer shorter sessions of care to cater for situations like this. Your fees will be based on the length of the sessions you agree with your child care service.

What if you are a sole parent? 

If you are a sole parent, your Child Care Subsidy will be assessed on your estimated annual income and your level of approved activity.

If you pay the fees on your own, then your subsidy will be based on your income estimate and hours of activity. If you have a shared custody arrangement and you share the child care fees, then each of you will be assessed separately and both of you can claim up to your fortnightly limit of hours. It is expected that you would only use the hours of subsidised care between you that you need, not the combined total of your separate assessments. It would be best to talk to the Department of Human Services about child support payments.

I'm currently receiving a sole parent payment, which increases my percentage. Will that be the same? 

Your Child Care Subsidy percentage will be determined by your income estimate.

Why is 10 per cent of the subsidy withheld? 

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. If you have been paid too much Child Care Subsidy, you will have a debt to repay.

If I over-estimate my income and receive less subsidy than I am entitled to, will I receive a lump sum payment?

Your Child Care Subsidy percentage will be based on your estimated combined annual family income. Your actual subsidy entitlement will be worked out at end of year reconciliation when your actual adjusted taxable income is known. The easiest way to estimate your income is to base it on your previous year's tax return. 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; if you have been paid too much Child Care Subsidy, you will have a debt to repay.

If I want to get my subsidy at the end of the year, can you withhold 100 per cent of my entitlement? 

No, this would be the same as the current lump sum payment option, which does not exist under the new Package.