Child care benefit

Child Care Benefit |  Child Care Rebate |  Jobs, Education and Training Child Care

Growing your family without shrinking your income is no child's play for many working parents, but there is a little help at hand. Parents and guardians are able to get some relief from the monetary drain of child care costs through two schemes, the Child Care Benefit and the Child Care Rebate.

Both are now administered by the Family Assistance Office, not directly through the Tax Office, but eligibility and entitlements remain the same. The Family Assistance Office was set up to help people get easier access to their entitlements without having to go to different agencies. To read more about the different types and costs of childcare, visit the government's online child care portal.

The bonus for busy parents and guardians is that while claiming the rebate used to mean extra calculations and head scratching when filling out your tax return, now it doesn't. The Family Assistance Office will calculate your entitlement and deposit it directly into your bank account.

Child Care Benefit
The Child Care Benefit is intended to help with the cost of child care, and can be paid to you either as a lump sum after the end of the financial year, or directly to the care provider to reduce fees (that is, subsidising the fees).

The benefit is referenced to the number of hours a week for child-minding services, and everyone is allocated 24 hours' worth to start with, although you can claim up to 50 hours if actively looking for work or training for work.

The following table gives the maximum benefit payments you can get (for a non-school child, and the school child rate is 85% of these amounts) from July 1, 2012.

Benefit for non-school child 2012-13
Number of children in care	Per week (for 50 hours of care)	Per hour for each child
1	$195.00	$3.90
2	$407.53	$4.07
3	$635.95	$4.23
4	$847.93	$4.23
Each additional child	$211.98	$4.23

But if you are working, your income can affect your benefit entitlement. You will not receive any Child Care Benefit if your 'actual annual family income' is more than the 2012-13 limits in the following table.

Number of children in care	Income limits
1	$142,426
2	$147,594
3	$166,656
4	$198,150
Each additional child add	$31,495

Actual annual family income, by the way, is you and your partner's combined taxable income (that is, assessable income less eligible deductions) plus certain amounts which don't go into taxable income, being:

• reportable fringe benefits received
• reportable superannuation contributions
• net losses from rental property or investments
• tax-free pensions or benefits received
• foreign income that is not taxable in Australia, and
• minus any child support you or your partner pay.

But even if your income level cuts you out of getting any payments under the Child Care Benefit, you are still deemed to be 'eligible' for the benefit (but get zero actual payments for it) and can still get the Child Care Rebate.

Child Care Rebate
Under the rebate scheme, you can get back 50% of your out-of-pocket expenses for approved child care. There is a cap on the amount, which until June 30, 2014 will remain at $7,500 per child per year.

To get the rebate you need to use an approved child care facility, and be eligible for the Child Care Benefit (which is basically available to anyone with work or study commitments who also cares for a child).

For the rebate, out-of-pocket expenses are defined as the total fees you have to pay for approved care less the amount of Child Care Benefit you get. Payments are made quarterly once the Family Assistance Office gets attendance details from your approved care provider, and are made directly into your bank account. You can also opt for an annual payment.

There are four ways to receive your Child Care Rebate:

• directly to your Child Care Benefit-approved child care service, fortnightly (or in many circumstances weekly)
• directly to your bank account, fortnightly (or in many circumstances weekly)
• by quarterly payment to your bank account
• by annual payment to your bank account (this payment option is only available if you receive your Child Care Benefit for approved child care as a lump-sum payment).

The definition of 'approved' or 'registered' care is important, as you can only get the rebate if you use an approved care facility.

Registered carers refer to grandparents, relatives or friends, or carers in schools or kindergartens. They provide work-related child care and still allow you to qualify for Child Care Benefit payments. The registered care rate for 2012-13 for a non school-age child in up to 50 hours of care per week is $0.652 per hour or $32.60 per week. Payment rates for school-age children are 85% of the non school-age rate.

Approved carers include day care centres, before and after school care, vacation care and some occasional care. Providers will be able to tell you if they are approved. The approved care rate for a non school-age child in up to 50 hours of care per week is $3.90 per hour or $195 per week. The same 85% rate applies for school-age kids.

(If you're looking for an approved child care service, click here for a handy tool to help find one in your area. The tool covers every state and territory, and you can search by town, suburb or postcode.)

Jobs, Education and Training Child Care
For parents and guardians who are not working, there's another source of help to get adequate child care while you're making efforts to get a job, and this is called the Jobs, Education and Training Child Care fee assistance scheme (or JET Child Care).

The JET scheme can help make up any 'gap fee' that crops up because of a difference in what you're charged for child care and what you get from the Child Care Benefit.

Covering the 'gap' comes with a couple of provisos however, being that you will still have to pay a little to the care provider (10¢ an hour) and that if you go over the benefit's 'hour' allocation (remember, it's 24 or 50 hours) you'll have to pay the full cost of these additional hours. The JET scheme pays the care provider directly, so you see its effects as reduced fees.

To be eligible you'll need to be receiving a Centrelink payment, like Newstart or the Youth Allowance, and be able to show that you're engaged in 'activities' to enter or re-enter the workforce.

These activities include of course job searching (you're covered for 20 days over 20 weeks) and also study or training with a view to employment (up to 24 months). Also covered are labour market or rehabilitation programs (up to a year), as well as any work undertaken (even unpaid) for the initial 26 weeks. Here is a fact sheet on the JET scheme, you should contact the Family Assistance Office to find out more, and here is the form to use from Centrelink to apply.

Last reviewed 30/07/2012