Childcare subsidy explained: who can get it and how to apply

If you’re a parent or guardian, you’re probably already familiar with the costs of childcare. It can be expensive, but there’s good news: the childcare subsidy is here to help! This subsidy, provided by the Australian government, is designed to make childcare more affordable for families. Let’s break it down – who can get it, how much you might be eligible for, and how you can apply.

What is the childcare subsidy?

The childcare subsidy (CCS) is a financial assistance program for families who use approved daycare services. It’s meant to help reduce the cost of daycare, making it more affordable for parents and carers. The amount you get depends on your income, how many kids you have in care, and other factors.

Who can get the childcare subsidy?

So, who exactly qualifies for the childcare subsidy? Here are the main criteria:

• Parents or guardians must be responsible for the child – If you’re the primary caregiver of a child aged 13 or under, you could qualify for the subsidy.

• Your child must be enrolled in approved care – The childcare service must be approved by the Australian government for the subsidy to apply. Most daycare centres and early learning services meet this requirement.

• You need to meet the residency rules – To qualify, you must meet certain residency requirements, like being an Australian citizen, permanent resident, or have a visa that lets you stay in Australia for a long time.

• You must meet the activity test – The activity test determines how many hours of care you can receive, based on how much work or study you do. If you work, study, or volunteer, you’ll likely meet this requirement. The more hours you work, the more hours of childcare you can get subsidised.

How much childcare subsidy can you get?

The childcare subsidy isn’t a one-size-fits-all deal. The amount you receive depends on a few key factors:

• Income – Families earning less than $80,000 a year can get a maximum subsidy of 90%. If you earn more than $80,000, the subsidy starts to taper off. It decreases by 1% for every $5,000 you earn over that threshold. Families with an income of $530,000 or more don’t qualify for the subsidy at all.

• Number of children in care – If you have more than one child aged 5 or under in care, you can receive a higher subsidy for the second and younger children.

• How much care you use – The amount of care your child needs (based on the activity test) can also affect how much subsidy you get.

So, if you’re earning under $80,000, you’re looking at a 90% subsidy. If you make more, you can still get a reduced subsidy depending on your income.

Changes to the childcare subsidy from July 2023

Back on 10 July 2023, the childcare subsidy received a boost, increasing the maximum amount from 85% to 90%. This change made the subsidy more beneficial for many families, especially those earning under $80,000.

As of 1 July 2023, you now need to pay the gap fee (the difference between the full fee and your subsidy) using electronic payments. This change was made to prevent fraud and ensure that the subsidy goes to the right people. Electronic payments are safer, faster, and more secure, making the process smoother for everyone.

How to apply for the childcare subsidy

Now that we know who can get the childcare subsidy, here’s how to apply:

1. Create a myGov account – If you don’t have one, head over to the myGov website and sign up.

2. Link your myGov account to Centrelink – Once you’ve got your account, link it to Centrelink.

3. Submit your claim – You can now submit your childcare subsidy claim online. Provide details like your income, how many kids you have in care, and how much childcare you need.

4. Wait for approval – Centrelink will review everything and let you know how much you’re eligible for. If approved, the subsidy starts automatically.

What happens after you apply?

Once your application is approved, the childcare subsidy is paid directly to your childcare provider. This means you won’t need to pay the full fee upfront – your provider will only charge you the remaining amount, known as the gap fee.

The subsidy helps reduce that gap, making childcare more affordable and consistent for families.

Can you get extra help?

In some cases, you might qualify for extra assistance through the Additional Child Care Subsidy (ACCS). This provides extra support if:

• You have a child with a disability

• You’re facing financial hardship

• You’re transitioning back into work

ACCS can cover up to the entire gap fee, making it easier to manage childcare costs. Speak with your childcare provider or Centrelink to see if you qualify.

And there you have it! The childcare subsidy can make a huge difference in helping families manage the cost of a childcare centre. By understanding how it works, who qualifies, and how to apply, you’re one step closer to getting the support you need. So, if you think you might be eligible, don’t wait – apply for the childcare subsidy today and start saving!

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