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New Child Care Changes And The Action You Need To Take

New Child Care Changes and the Action You Need To Take

Its hoped the new childcare changes coming into effect on the 2nd July this year will make things easier and fairer.

Current Rules & Why They Are Changing

Currently there are 2 payments: Child Care Benefit and Child Care Rebate.

The Child Care Benefit was dependent upon what you earnt. You could choose to receive the Child Care Benefit fortnightly to either your bank account or to the child care centre. You could also have it paid quarterly to your bank account or annually with your tax return*

The Child Care Rebate was not dependent upon what you earnt. 50% of your child care costs were covered BUT only up to annual limit (2017-18 limit is $7,613 per child). You could have this paid weekly to the child care centre or annually at tax time.

This cap was often quickly consumed (especially if you lived in an area with high child care costs or had your baby in care more than 3 days a week). If you had 2 kids at day care and used up your cap you could be spending hundreds a day to go to work.

I would see this frequently with clients and they would become disheartened “im working for nothing”.

The new changes could help to ease the child care costs for a lot of households (not all though some will be worse off)

However, I think it important not to just attribute child care cost to your wage – it’s a cost of the household.

Summary of The New Rules

The changes coming are hoped to make the system more simple and equitable as:

  • There will be one benefit the “Child Care Subsidy” instead of two
  • The amount you get back will depend on what you earn ie it is means tested
  • It can only be paid to the centre (you cant get it at tax time)
  • The amount covered is no longer based on what the centre charges but an hourly rebate set by the government ($11.55 centre-based day care, $10.70 family day care, $10.10 outside school hours care). If you pay more than this, you will have to cover the difference. I believe the government introduced the measure to try and stop child care providers from increasing fees (which is a problem when you have a private service being publicly funded)

Impact On You

The amount you get back depends now depends on what your family income is for the financial year:

  • Earning $65,710 or less, you will have 85 per cent covered
  • Between $65,710 – $350,000 the amount gradually reduces example:
  • $100,000 family income 70% back
  • $170,210-$250,000 family income 50% back
  • $250,000 – $340,000 family income 20% back
  • $350,000 will not get any subsidies

PLUS there is also still a cap of $10,000 per child (still higher than the current cap of $7,613) once your family earns more than $185,710.

If you want to understand the impact that these changes may have on your family and household budget then click here and we will send you our calculator and budget planner

I always tell my clients your child care years aren’t typically the years you will save a lot of money BUT you want to make sure you don’t go backwards and understanding your household budget can help with this.


Download Your Free Calculator & Planner

What you need to do ASAP

Unfortunately, the transition to the new rules cannot happen automatically.

You will need to complete an online Child Care Subsidy assessment using your Centrelink online account through myGov.

You will be asked to provide some new information and confirm your current details, including:

Throughout April 2018, Centrelink will be writing to all families currently receiving Child Care Benefit and Child Care Rebate with instructions on completing their online assessment through myGov. But just in case you don’t get the letter here are the 3 steps you need to take:

Step 1) Sign in to your myGov account. If you don’t have one, you will need to create a myGov account.

Step 2) Link myGov to Centrelink. You can do this under Services.

Step 3) Select Centrelink and complete the Child Care Subsidy Assessment.

Importantly if families do not complete their assessment before 2 July 2018, they may not receive any child care fee assistance. It’s best not to leave to the last minute so if you haven’t already schedule some time in your diary over next week or so to look at it (I find if I don’t put it in my diary it doesn’t get done)

Pro Tip: Want to be kept up to date with legislation changes then why not join The Savings Squad its free



The views expressed in this publication are solely those of the author and are not reflective or indicative of licensee’s position, and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author.

Adele Martin is a financial adviser at Firefly Wealth and an Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 AFSL 238429.

The information (including taxation) in this article does not consider your personal circumstances and is of a general nature only. You should not act on the information provided without first obtaining professional advice specific to your circumstances.


The information (including taxation) provided in this blog is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider the Product Disclosure Statement. The author, Adele Martin, is a Certified Financial Planner at Firefly Wealth which is an Authorised Representative of RI Advice Group ABN 23 001 774 125 AFSL 238429. The views expressed in the blog are solely those of the author, they are not reflective or indicative of RI licensees’ position and are not attributed to RI Advice Group. They cannot be reproduced in any form without the written consent of the author.

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