If you’re a parent who finds the Child Care Rebate and the Child Care Benefit a bit confusing, don’t worry--you’re one of many! To help you understand these two types of childcare subsidies, we’ve gathered the most important facts that you need to know.
Here’s a breakdown of what the Child Care Rebate and Benefit is, how to find out if you’re eligible for the Child Care Rebate and/or the Child Care Benefit, and how you can apply for and claim those payments.
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To start with, let’s clear up a common misconception: the Child Care Rebate and the Child Care Benefit are not part of your Family Tax Benefit.
While the Family Tax Benefit includes payments for eligible families that help with the costs of raising children, the Child Care Benefit and the Child Care Rebate are part of a separate financial assistance specifically related to helping families with the costs of childcare.
The Child Care Benefit (CCB)
The Child Care Benefit is a childcare financial assistance that’s calculated primarily based on your family’s income and the number of children you have in childcare.
Are you entitled to the Child Care Benefit?
You may be eligible for the Child Care Benefit if:
- You or your partner are an Australian citizen, or a permanent resident living in Australia
- You’re using an approved childcare (a childcare that has been approved by the Australian Government for Child Care Benefit purposes) or registered childcare (an individual providing childcare service who has registered with the Department of Human Services)
- You’re the person paying for your childcare costs
- Your child is fully immunised, on a catch-up schedule or has a valid exemption, as per the new No Jab, No Play legislation.
The Child Care Benefit Payment Rate
Being eligible for the Child Care Benefit doesn’t necessarily mean you’re entitled to the Child Care Benefit payments, as this depends on the payment rate you’re eligible for. The rate of Child Care Benefit you’re eligible for depends on:
- Your annual family income
- The number of children you have attending childcare
- The type of childcare service your child attends
- The number of hours your child is in care each week.
To receive the Child Care Benefit, you must first meet an income test. Eligible families who earn less than $45,114 annually and/or receive income support may receive the maximum rate of Child Care Benefit.
If you’re eligible for the Child Care Benefit but your family earns above the current income thresholds, you will be entitled to zero rate of Child Care Benefit, which means your Child Care Benefit payment reduces to $0.
The following is the current income thresholds for the Child Care Benefit payments in 2017-18:
Child Care Benefit Hours
Eligible families can receive the Child Care Benefit for up to 24 hours of care per child per week. Some of you may receive up to 50 hours per child per week if you and your partner meet the Work, Training, or Study test, or have an exemption from the test.
The Work, Training, or Study Test for Child Care Benefit
In order to claim up to 50 hours of Child Care Benefit per child per week, you’ll need to take the Work, Training or Study Test, and prove that you and your partner each have work-related commitments for a minimum of 15 hours per week or 30 hours per fortnight.
You are considered as taking on a work-related commitment if you’re currently:
- Undertaking paid work (this includes self-employment and paid leave from work)
- Setting up your own business
- Searching for work
- Studying or training
- Undertaking voluntary work
- On paid or unpaid parental leave.
The Child Care Rebate (CCR)
The Child Care Rebate helps you cover up to 50% of your out-of-pocket childcare expenses, and it’s not income-tested. The maximum amount of Child Care Rebate that you can claim is $7,613 per child, per financial year.
Are you entitled to the Child Care Rebate?
If you’re eligible for Child Care Benefit, even if you’re entitled to zero rate, you may then also be eligible for the Child Care Rebate. The only additional criteria you’ll need to meet is that you or your partner have work, training, or study commitments during the week your child is in care. There’s no minimum hours of work-related commitments required for you to be eligible, unless you and/or your partner are currently undertaking voluntary work, in which case you’ll need to undertake at least 15 hours a week or 30 hours a fortnight.
How to claim your benefit payments
You can lodge a claim for the Child Care Benefit either in person at a Centrelink service centre, or online through the Department of Human Services website.
As baffling as it sounds, in order to receive the Child Care Rebate, you’ll need to be assessed for your Child Care Benefit eligibility first--yes, even if you’re eligible for zero rate of Child Care Benefit due to your family income being too high!
Customer Reference Number (CRN)
Customer Reference Number, widely-known as a CRN, is a unique set of nine digits and an alphabetic character, generated by Centrelink and assigned to people who receive Centrelink services. There are two CRNs that you’ll need to provide your centre with in order for you to receive your Child Care Benefit and/or Rebate payments: your CRN and your child’s CRN. Your centre will use those two reference numbers along with your date of birth and your child’s date of birth to identify your family. So, be sure to provide the correct information when you fill out your enrolment forms.
If you’ve dealt with Centrelink in the past, you will be able to find your CRN on your concession card or any letter correspondence you’ve received from Centrelink. If you haven’t used Centrelink services before and don’t have a CRN yet, you can obtain it by visiting your closest Centrelink service centre.
After you lodge a claim for your Child Care Benefit and once your claim is assessed, Centrelink will send you a letter correspondence to confirm your eligibility, along with your child’s CRN. Please note that you’ll need to do this before your child starts at childcare.
After being assessed and approved, your Child Care Rebate and/or Benefit payments will start when your childcare service sends through your child’s attendance details to Centrelink.
If you’re eligible for both Child Care Benefit and Child Care Rebate, Child Care Benefit applies first on the full fees, and then Child Care Rebate will apply to the remaining amount.
Child Care Benefit is normally paid to the childcare centre, so families receive it in the form of a fee reduction, meaning you only need to pay your out-of-pocket childcare fee after your benefit payment has been deducted. There’s also an option to have your Child Care Benefit paid as a lump sum payment, which means you’ll pay full childcare fees during the year and claim for your Child Care Benefit at the end of the financial year.
With Child Care Rebate, you can either have this paid as a fee reduction, or you can pay full childcare fees and have the rebate paid to your bank account directly. If you prefer the latter, you can choose to have the rebate paid fortnightly, quarterly, or annually.
If you receive both the Child Care Benefit and the Child Care Rebate, and you opt for a fee reduction, Centrelink will withhold 15% of your Child Care Rebate entitlement during the year. This amount will be paid to you after the end of financial year.
- Let’s say you’re a family with one child attending an approved childcare centre three days a week
- Your childcare fee is $120 per day
- You’re eligible for $20 Child Care Benefit per day
- You’re also entitled to the Child Care Rebate.
Your weekly out-of-pocket fees will be:
Out-of-pocket childcare fee estimator
To estimate your out-of-pocket cost of childcare, use our Childcare Rebate Calculator.
The Jobs, Education, and Training Childcare Fee Assistance (JET)
If you’re already receiving the Child Care Benefit and the Child Care Rebate, you may be able to receive further help with your childcare fees from the Jobs, Education, and Training Childcare Fee Asisstance, commonly known as the JET.
The JET is an additional childcare financial assistance available for eligible parents who are using approved childcare to engage in activities that help improve their skills so they can enter or re-enter the workforce.
You can claim the JET Childcare Fee Assistance if you currently:
- Receive the Child Care Benefit at the maximum rate, and
- Have a Job Plan (Your Job Plan describes a list of activities you’ve agreed to undertake that will help you find a job), and
- Receive one or more eligible income support payments.
What happens if my child is absent?
All parents who receive Child Care Benefit and/or Child Care Rebate payments are eligible for up to 42 absent days per child per financial year. For these 42 days, your child can be absent for any reason and you will still receive your Child Care Benefit and/or Rebate payment, without needing to provide any supporting evidence or documentations.
If one or more of your child’s childcare bookings happens to fall on a public holiday and your centre still charges you for the childcare fee, this will also be considered an absence and will be included in your child’s absence count for the year.
For any additional absences beyond the 42 days a year, you can still receive your Child Care Benefit and/or Rebate payment if the reason for the additional absence is any of the following:
- Your child is sick
- You have rostered days off or rotating shifts
- You have shared care arrangements due to a court order, parenting plan or parenting order.
You will be required to provide supporting documents to verify the reason for absence, such as a doctor’s certificate if your child is sick.
This same rule also applies to the Jobs, Education, and Training (JET) Childcare Fee Assistance.
To keep track of how many absent days you have left for the year, you can access your child’s absence record by logging into your Centrelink online account.
Please note that from 2 July 2018, there will be changes to the existing childcare assistance. The current Child Care Benefit and Child Care Rebate will be replaced by the Child Care Subsidy package. For more information regarding this please visit The Department of Education and Training website.
If you need more information on Child Care Rebate and Child Care Benefit, contact Childcare Near Me and one of our childcare experts will be happy to help you out!