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Your combined family income is one of three key factors that determine how much Child Care Subsidy you will receive. Generally, as family income increases, the amount of Government Subsidy decreases. The other two factors determining your Child Care Subsidy is your fortnightly activity – such as work, study or volunteering, and the type of service your child attends.
One of the benefits of the Government’s new Child Care Subsidy is the removal of the annual cap for low and middle-income families. If your total combined family income is $186,958 pa or less, the annual subsidy cap has now been removed. If your family earns more between $186,958 and $351,248 pa, the cap will be increased to $10,190 per child, per year (previously $7,613).
This is great news for families who hit this cap well before the financial year is out and find themselves paying full fees or reducing their number of days of care until the annual cap resets. It will also remove the barrier for families wanting to work extra shifts, or increase the days their child attends care.
Unfortunately, calculating your exact subsidy entitlements can be a little confusing.
Prior to beginning care, you will need to complete a Child Care Subsidy assessment and apply for the subsidy via myGov. During this process, families will be asked to provide their estimated 2018-19 combined family income and their activity details. The government will communicate with you through myGov for all Child Care Subsidy matters.
Your subsidy percentage will be based on your estimated combined annual family income. Your actual subsidy entitlement will be worked out at the 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.
Note: 5% of your weekly Child Care Subsidy entitlement will be withheld by the government. Following reconciliation of your tax return at the end of the financial year, any amount owing to you will be paid as a lump sum by the government. If you have been paid too much Child Care Subsidy, you will have a debt to repay.
If you require information urgently, please call our centre on (03) 9879 5888 or visit myGov.
Please also note: if your child is not immunised they will not qualify for any rebate or financial assistance under these schemes unless they have a valid exemption.
When you have registered at myGov, call Choklits on (03) 9879 5888, ask to speak with Sue and she will run through the entire system, explain how everything works, give you an estimated cost and alert you of other things you need to know moving forward.