The Child Care Subsidy (CCS) provides a huge helping hand to so many families. But the complexities of the scheme can make it a little challenging to navigate. We get it! Even for those of us in the industry it’s not always straightforward to get your head around.
If you want the lowdown on all things CCS and what it means for your family, we’ve pulled together this handy guide.
Designed to help cover the costs of child care for Australian families, the Child Care Subsidy is funded by the Federal Government. It came into effect on on 2 July 2018 and replaced the previous child care support package, known as the Child Care Rebate.
There are certain eligibility criteria that families need to meet in order to receive the subsidy and it can only be used for registered or approved child care providers. It’s also income tested so the amount of CCS you receive will vary depending on your family income.
It’s important to note that not everyone who sends their child to child care is eligible for the CCS. There are certain eligibility criteria such as residency and immunisation requirements that you must meet.
You must also be the person liable for paying the child care fees and have care of your child at least two nights per fortnight.
Once you have been approved for the Child Care Subsidy (see below for steps to apply), your subsidy is paid directly by the Government to your child care provider. This amount is deducted from your total fees and you only need to pay the difference.
For example, if you are eligible for a 45% subsidy and your fees are $100 per day, the Government will calculate $45 of subsidy to apply to your child's booking, but they will also withhold 5% of that subsidy amount, so the subsidy that will be paid directly to your provider is $42.50 and you will pay the remaining $57.50.
You can use our Child Care Subsidy Calculator to help you estimate your subsidy percentage.
The subsidy is based on what the estimate you provide of your combined annual family income. Usually you can base this off your previous year’s salary or income tax return. If you have changed jobs or received a pay rise you should also factor this in.
At the end of the financial year, after you have lodged your tax return, the Government will do a reconciliation based on your actual income for the year.
The Government also withholds 5% of your weekly CCS to help offset any potential amounts you may owe at the end of the financial year. If you have underestimated your income and are actually entitled to a lower CCS percentage, you will have to repay this money to the Government. Otherwise, any money owing to you will be paid as an annual lump sum.
All applications for the CCS are made through your myGov Account, not through your child care provider.
To apply for the subsidy, please follow the below steps:
Centrelink will assess your claim and provide you with an assessment letter outlining your entitlement. The assessment is based on the information you provide so it’s important to ensure this is as accurate as possible.
The assessment will provide you with your subsidy percentage and also how much subsidised care you can access for each child per fortnight. This is based on the number of hours you work (both paid and unpaid work), study, volunteer etc. You can find more information abou recognised activities here.
Once you have received this assessment letter, you will need to give your childcare provider your CRN and you child’s CRN. This will be given to you when you make your application and can be found in your myGov account.
Your provider will then connect your Centrelink account and add your child’s enrolment details. Once this has been done, you will receive a notification from Centrelink to login and approve the enrolment notice.
In order to receive the CCS, your child must meet the immunisation requirements.
They either need to be up to date with the National Immunisation Program Schedule, be on an immunisation catch up schedule in line with the Australian Immunisation Handbook or have an approved medical exemption.
If your child is immunised, you don’t need to do anything. This will be checked automatically through Medicare when you apply.
If your child misses an immunisation, you have a grace period of 63 days before you will stop receiving the subsidy.
For those children who were vaccinated overseas, speak with your vaccination provider in Australia.
The activity test will determine how many hours of subsidised care you are eligible to receive for your child.
If you are eligible for zero or 24 hours, you may also be able to access the preschool exemption program.
This may give you access to 36 hours of subsidised care each fortnight for a preschool-aged child to attend a preschool program within a centre-based child care service.
In order to access this exemption, you must first meet the CCS eligibility requirements, and:
You can apply for the preschool exemption by updating your child’s expected school start date. You can do this by following the below steps:
If you have a preschool aged child and are entitled to zero or 24 hours of subsidised care, your CCS assessment letter will advise that you may be entitled to 36 hours of subsidised care if your child attends a preschool program.
Speak with your child care service so they can complete a ‘preschool indicator’. If they indicate that your child is part of an early education program, Centrelink will calculate your entitlement.
Your preschool exemption will no longer apply if you choose to delay your child’s primary school start date for a further year. You should update your child’s expected school start date with Centrelink as soon as you're aware of change.
The ACCS provides additional financial assistance for the cost of approved child care. To receive ACCS you must be eligible for the Child Care Subsidy and also meet further eligibility requirements.
Note: ACCS is different to the Higher Child Care Subsidy which applies from 7 March 2022.
ACCS is designed to remove barriers that may affect a child’s access to child care. It is an extra level of support for children and families who are genuinely disadvantaged. The cases where ACCS may apply include:
There are four different categories of ACCS. In all cases, you must first be eligible for the Child Care Subsidy. These include:
The Grandparent subsidy
For grandparents on an income support payment and have 65% or more care of their grandchild or great grandchild. The grandparent must also make day-to-day decisions about their grandchild’s care.
The Transition to Work subsidy
For families with an income of less than $70,015 and meet certain other transition to work eligibility requirements such as having a Job Plan or Participation Plan and receiving other Government support payments.
The Temporary Financial Hardship subsidy
For families that have experienced financial hardship of a temporary nature and have a substantially reduced ability to pay their childcare fees. The event leading to the financial hardship must have happened in the last six months and may include things such as losing a job, serious illness or the death of a partner.
The Child Wellbeing subsidy
For families caring for a child who is vulnerable or at risk of harm, abuse or neglect.
This all depends on the type of ACCS you’re eligible for. ACCS doesn’t have an annual cap, payments are subject to a withholding amount and they aren’t balanced at the end of the year.
For the Grandparent, Temporary Financial Hardship and Child Wellbeing subsidies you’ll be able to access 100 hours of subsidised care each fortnight for each eligible child. For the Transition to Work subsidy, the amount of subsidised care you receive will be determined by your activity level.
The amounts for each ACCS type can vary greatly depending on your individual circumstances. You can find all the details on the Services Australia website.
If you are already receiving the Child Care Subsidy, you can apply for ACCS via the myGov website.
If you haven’t yet applied for the Child Care Subsidy, you can apply for ACCS at the same time.
For the Child Wellbeing Subsidy, your child care service can apply on your behalf. You must be getting the Child Care Subsidy to get the Child Wellbeing Subsidy.
Each financial year, you are entitled to 42 allowable absences per child. You do not need to provide documentation for these absences and they can be used for illness, holidays or any other reason.
Any days above and beyond the 42 allowable absences will not incur CCS unless you provide a Doctor’s certificate or other appropriate documentation.
If you find that your CCS hours are different each alternate week, this could be due to the hours of care you are eligible for vs the hours of care that you use.
For example, if your CCS entitlement is 100 hours of subsidised care per fortnight and your child attends for 110 hours, your fees for the second week of the fortnight will be higher to reflect this.
The other reason your CCS amount may change is because a change in your income. Each year you need to update your income estimate and your CCS may change as a result of this.
The start date on your Centrelink account is the date your child’s enrolment details were sent to Centrelink. This may be before or after your child started at the child care provider.
For families earning $190,015 or less, there is no annual cap. If your combined family income is between $190,015 and $354,305, you you will have an annual cap of $10,655 per child, per financial year.
You can refer to your letter of assessment for whether the annual cap applies to you or not.
Yes, if you have more than one child you will need to make a new claim for each child.
At Gowrie NSW, we’re here to help. As an approved child care service, we support the families who use our services to navigate the complexities of the Child Care Subsidy every day.
If you have any questions about CCS, please contact us.
Disclaimer: Subsidies may differ depending on individual circumstances. Refer to the Department of Education, Skills and Employment for further information.