Changes to Child Care Subsidy from July 2023

CCS is changing.

From 10 July 2023, most families using early childhood education and care will get more CCS.

Here’s what you need to know:

• The maximum amount of CCS is increasing from 85% to 90%.

• Families earning $80,000 or less will get 90% subsidy.

• Families earning over $80,000 and under $530,000 will get a subsidy that tapers down from 90%, depending on their income. The subsidy will go down 1% for each $5,000 earned.

• Families with more than one child aged 5 or under in care can still get a higher rate for their second and younger children.

• Families can find out more by visiting the Services Australia website, subscribing to the Raising Kids news update, and following the Family Update Facebook page.

From July, the gap fee must be paid electronically

Families using child care must pay the gap fee using electronic means from 1 July 2023.
The gap fee is the difference between the provider’s fee and the Child Care Subsidy (CCS) amount. Find out more about gap fees and Child Care Subsidy.

Electronic funds transfer, or EFT, is when a customer pays a bill using electronic means. Typical EFT payment methods include:

• bank or credit card, including mobile wallets

• direct deposit or bank transfer, including PayID

• online payment systems through third party software

• BPAY or Centrepay.

This change will help us protect CCS against fraud and non-compliance. We will check EFT payments against provider and service bank statements and receipts. This way, we can prevent fraudulent CCS claims for care that did not take place. In turn, this ensures CCS flows fairly to families.

Most services already accept EFT payments. This is because it’s safer for staff and easier to administer.

Similarly, over 98% of families already use EFT to pay their gap fee. Most families get salaries or benefits electronically, making it easy to pay the gap fee using EFT.

Families who cannot use EFT to pay their gap fee should talk to their service. Families seeking EFT exemption might be eligible for Additional Child Care Subsidy (ACCS). ACCS may cover all of a child’s child care fees.

Exemptions will apply in limited circumstances. We will provide more information about exemptions soon. We’ll also develop some materials you can use

to communicate this measure to families.