The government has eventually been able to pass their proposed child care changes through Parliament. For many it means an increase in child care rebate but the news is not so good for those who don't meet the activity test.
What are the Changes?
From 2 July 2018, the existing Child Care Benefit and Child Care Rebate will be replaced by a single Child Care Rebate. Generally anyone whose family income is under $250,000 will be either better off or no worse off as long as they meet the activity test. The activity test is a new test which requires parents to work, study or volunteer for at least eight hours a fortnight to get the maximum benefit. If you fail the activity test and your family's income is below $65,710 you are still eligible for 12 hours of subsidised child care per week. If your family's income is above $65,710 and you fail the work test, you will not receive any child care rebate.
The major change that will benefit many families is the lifting or removal of the annual cap on how much rebate you can claim. Under the existing rules a family can only claim up to $7,500 per child per year regardless of their income. Using this cap many families can only access around 3 days of child care per week before exhausting their rebate. Under the new rules families earning under $185,710 will have no annual cap and claims for those earning over $185,710 will be capped at $10,000 per child making a return to full time employment more economically feasible.
The new rates from 2 July 2018 will be: