Preparing for the new child care package

For all parents trying to start, run or grow their small- or medium-sized business, there are several distinct commonalities that unite them all: an infallible work ethic, unwavering dedication and sometimes a sense that there simply isn’t enough time in the day to get things done. Combined with concerns regarding a consistent cashflow and peaks and troughs in billable work, arranging child care for the little ones can often seem like an insurmountable task.

Parents who are small- or medium-sized business owners have unique needs and circumstances when it comes to navigating child care, and the current system is falling short when it comes to catering to this very important portion of workers.

But come 2 July 2018, the Government is introducing a New Child Care Package that will offer better support to parents who work outside the normal nine-to-five. This article is intended to help you better understand these changes and what to do to access the new Child Care Subsidy as someone who owns a small- or medium-sized business.

A brief overview

Under the New Child Care Package, the current Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy. There are three key factors that will determine how much Child Care Subsidy families may receive:

  • Your combined family income – how much your family earns will determine the percentage of subsidy you are eligible for.
  • Your activity level – parents must undertake a recognised activity, and
  • The type of service your family uses – the new subsidy will be calculated by an hourly rate cap, which will vary depending on whether you use centre-based care, family day care, or outside school hours care.

How to access your Child Care Subsidy

As noted above, parents must be undertaking a recognised activity to qualify for the new Child Care Subsidy. The more hours of activity you do per fortnight, the more hours of subsidised care you can access per child. However, this can sometimes be difficult to predict, with small- and medium-sized business owners often adjusting their schedule to accommodate changes in workflow.

Fortunately, the Child Care Subsidy will be calculated over a three-month period. Families will be able to estimate their level of activity over this time period to work out how many hours of subsidised care they might receive. A good tip for calculating your hours of activity is to look at your previous three months of work to see how many hours you worked in total over that period. Even if you forecast your hours incorrectly, you can update your details at any point throughout the year.

The Child Care Subsidy in practice

There are also several measures in place as part of the New Child Care Package to help support small- and medium-sized business owners in more practical terms. Firstly, the subsidy will be paid directly to your chosen service provider and parents will only be required to pay the difference. This is somewhat of a relief for those concerned with irregular cash flows.

Another great aspect of this package is that workers don’t have to use their subsidised hours on the same day that they work. So, if like many small business owners you work all hours of the night and on the weekend, you can still count these hours as “activity” to use for subsidised child care during the week.

Families should head to www.education.gov.au/ChildCare to get an estimate of how much Child Care Subsidy you may be able to receive under the Government’s changes to offer more support for more families. Keep checking in on that website to ensure you know what you need to do to transition to the new system.

Senator the Hon Simon Birmingham, Minister for Education and Training

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