September 21, 2017

2017 Childcare Rebate Changes Summarised

Parents in Australia want the best for their children, that’s why many start building an education savings plan as early as possible. Child education is important, but it costs money and can be really expensive, not to mention the fact that there are other aspects in a child’s life that requires a lot of money and attention. But soon, parents will get more assistance with child care from the government.

Starting July 2, 2018, many working Australian parents will get more subsidy on child care.

Starting on July 2, 2018, many working Australian parents will get more subsidy on child care. This is a result of changes in childcare rebate which have passed the Senate, gaining the support of cross-benchers such as Senator Hinch, One Nation, as well as the Nick Xenophon Party. In this overhaul to the system, family tax benefits will be frozen for a minimum of two years. This is to aid in covering childcare fees.

Here are the 2017 childcare rebate changes that can be expected:

  • The new subsidy will replace current payments. This means that the Child Care Rebate with a yearly limit of $7,500, as well as the means-tested Child Care Benefit will be scrapped.
  • How can you be entitled for the new subsidy? This requires both parents to work, study or volunteer for a minimum of eight hours in two weeks to meet the activity test. If you do not work enough and your income is less than $65,710, you will still be able to get 12 hours of child care. However, if your income is over $65,710 and fail to meet the activity test, you will not get any subsidy on child care.
  • The government will cover 85 percent of child care fees of a family that earns $65,710 or less. If you earn about $100,000, the government will care for 70 percent of the fees. But when your income is between $170,710 and $250,000, the subsidy will be reduced to 50 percent. Also, the subsidy will be 20 percent if you earn from $250,000 to $340,000, while there are no more subsidies if you earn over $350,000.
  • The new plan also allows children from disadvantaged families to be entitled for full subsidy of 50 hours per week.
  • A set hourly rate is used to compute for the subsidies: $11.55 for centre-based day care, $10.70 for family day care, and $10.10 for outside school hours care.

Do you have other ideas on childcare rebate, education savings plan or child education in Australia? Share your insights in the comments section.

About the author  ⁄ Marxa Dillan

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