Higher Child Care Subsidy for families with multiple children and removal of the annual cap

ACA has been in ongoing discussions with the Australian Government about the affordability of Early Childhood Education and Care (ECEC) for families, in particular those with multiple children in care. 

We are extremely pleased that the government listened and has introduced two new measures that we believe will make a difference to families - a higher Child Care Subsidy for families with more than one child in care, and the removal of the annual cap.

These changes are outlined below:

What is the higher Child Care Subsidy (CCS)?

From 7 March 2022, a family’s CCS will increase if they: 

• earn under $354,305 (2021–22 terms), and
• have more than one child aged 5 or under in care.

Families will receive an increased CCS rate of 30% for their second child and younger children aged five or under, up to a maximum subsidy rate of 95%.

Families will continue to receive their income tested CCS rate for all children. Children eligible for the higher rate will have the increase automatically included in their CCS percentage reported to services. 

 

Who gets the higher Child Care Subsidy? 

Services Australia will work out which children get the higher subsidy by:  

• assessing all children in the family; 
• identifying the standard rate child, and 
• identifying the higher rate children.  

The standard rate child is usually the eldest CCS-eligible child aged 5 or under in the family. They get the income tested CCS rate, while younger children will get a higher subsidy. 

 

What do providers need to do?

Service providers do not need to do anything in addition to their existing obligations under Family Assistance Law.

Children eligible for the higher rate will have the increase automatically included in their CCS percentage reported to services. Services Australia have been communicating directly with software providers in the development and testing of software updates to ensure system capability in time for commencement.

 

What do families need to do?

Families should ensure their personal details are up to date on Centrelink, as they will continue to receive their income tested CCS rate for all children. Services Australia will automatically increase the CCS for eligible second and younger children. 

 

Combined families

The measure will capture diverse family circumstances, including combined families where both parents or carers, who are partnered, are individually eligible for CCS for different children. 

The CCS System is being enhanced to recognise combined families from July 2022. Services Australia will back pay the higher subsidy amount to affected families for the period March to July 2022. 

Combined families who want immediate access to the higher CCS rate for younger children can choose one member of the couple to claim CCS for all children.  That individual will need to make a new CCS claim. Families should contact Services Australia to do this as soon as possible because claims can only be backdated for a maximum of 28 days. If a combined family takes up this option, providers must update the family’s enrolments. Enrolments must reflect the individual who is now claiming CCS for all children.  

 

Child Care Subsidy estimator

Services Australia’s online payment finder will be updated to reflect families’ entitlement to the higher CCS for families with multiple children from July 2022. Prior to July 2022, explanatory text will be displayed to families advising them their rate of subsidy will be higher if they have multiple children aged five years or under attending child care.

 

However, families can use the CCS estimator to check how much their child care out of pocket costs might be. The estimator provides a simple calculation of families’ estimated entitlement and reflects the higher subsidy for the second and subsequent children. The estimator can be accessed at StartingBlocks.gov.au, launched 7 February 2022.

Removal of the annual cap

As at 10 December 2021, the annual cap which limits the amount of subsidy per child, per year to $10,655 was removed for the entire 2021-22 financial year onwards.

If a family reached the CCS annual cap before 10 December, their CCS may have stopped. Services Australia will automatically reassess their CCS entitlement for this time. They will back pay CCS for affected sessions of care. 

Where to find more resources

Information for providers

The Department of Education, Skills & Employment has more information for providers on their website.
This includes resources that providers can share with families at their service.

Information for families

Services Australia has information for families on their website, including:

• who will get the higher subsidy
• how much the higher subsidy is
• when families will get the higher subsidy
• what families need to do.

There are also examples that show how the higher CCS may work for different families.