Child care subsidy might save you money
The new Child Care Subsidy which replaces the Child Care Benefit and Child Care Rebate on 1 July 2018, will be the most important issue to working families in Australia over the next six months.
The change has come about largely as an outcome of the 2017 Federal Budget which removes the Childcare Rebate Cap of $7,500 pa per child.
What does that mean for you?
The great majority of families will be better off following this change, as it will result in a boost to household income. For example, if you are a family with a household income of $80,000 pa and you have a child in full time care, you will receive a boost of $7,540 to your cashflow over the year. If the child is in care, say, 3 days per week, this reduces to $2,600 for the year. If you have a household income of $150,000 pa and you have a child in full time care, you will receive a boost of $8,060 to your cashflow over the year. Note, families on more than $320,000 will be worse off under the new arrangements.
Remember, these subsidies are per child, so if you have more than one child in childcare, the boost will be even greater.
This policy effects children in most childcare arrangements including:
• Long day care
• Family day care
• Before/after school care arrangements
This article was written by Kristine L’Estrange, Paraplanner at Milestone Financial.