How much does childcare cost? The Child Care Subsidy (aka CCS) is proving difficult for time poor parents to calculate. We’ve prepared this useful guide to figuring out how much childcare costs using the CCS calculator to help make it simpler for busy mums and dads. Once you understand how much your childcare will cost, we’ll help you figure out if you’re getting good value for money.Just like you would with your insurance or electricity, it pays to work out just how much you’re paying for childcare and what you’re getting for it. Here’s our guide to the CCS and how it’s calculated so you can understand the rate you pay. How much does childcare cost? That’s determined by the government. What you get for your money? That’s up to you.
What is the Childcare Subsidy?
The Australian Childcare Subsidy commenced July 2, 2018 to replace the Child Care Rebate and the Child Care Benefit. The CCS is a more streamlined rebate system which is calculated by a number of factors and paid directly to the childcare provider of your choice.
How does the CCS work?
The amount that is paid directly to your childcare service provider is calculated by considering the following:1. Your activity level (Paid work, self-employment, unpaid work in a family business, training, education, volunteering, looking for work and travel to and from work.)2. Your combined family income3. The type of childcare service and their hourly rates.When calculating how much CCS you are entitled to, the result is based on the guardian/parent who has the lowest activity rate. It is important to note that both parents have to work to satisfy the activity test for CCS. If one parent does not work, they are ineligible for the subsidy. The CCS has been designed to encourage contributions to the economy.
The CCS Activity Test
The activity test is the crux of determining whether or not you are eligible to receive the child care subsidy, how many hours of care are covered and the percentage of CCS you receive off your childcare fees.
If you work up to 8 hours a fortnight (or your family earns less than $66,958) You are eligible for max. 24 hours subsidy per fortnight
If you work 8 to 16 hours a fortnight You are eligible for max. 36 hours subsidy per fortnightIf you work 16 to 48 hours a fortnight You are eligible for max. 72 hours subsidy per fortnightIf you work more than 48 hours a fortnight You are eligible for max. 100 hours subsidy per fortnight
2. Combined Family Income Test
Combined income of $56,710 or less 85% of childcare fees covered by CCSCombined income of $65,710 – $170,710 85% to 50% of childcare fees covered by CCS, receiving one percent less for every $3000Combined income of $170,710 – $250,000 50% of childcare fees covered by CCSCombined income of $250,000 – $340,000 50% to 20% of childcare fees covered by CCS, receiving one percent less for every $3000Combined income of $340,000 – $350,000 20% of childcare fees covered by CCSCombined income of more than $350,00 will receive no subsidy.
3. Type of childcare centre and rates test
How much does childcare cost at different providers? The rebates vary based on the classification of the carer.
Centre-based day care services Hourly cap $11.77Family day care Hourly cap $10.90Outside school hours care Hourly cap $10.29
If your childcare centre’s fees exceed this hourly cap, you will need to pay this amount out of pocket.To work out the hourly rate of your childcare service, divide the daily rate by the length of the session, usually 10 or 12 hours.
No more annual cap
Previously, some families had to carefully plan their childcare so they wouldn’t run out of the Child Care Rebate before the end of the financial year. The annual cap of $7,613 for those who earn $185,710 or less has been removed and you will continue to get the Child Care Subsidy. A cap kicks in at a combined income of $186,958 or more where families will only be able to claim $10,190 per child.
How much does childcare cost for 2 Children on 2 Incomes
- 2 children in centre-based childcare services 6 days (72 hours) per fortnight
- Guardian #1 45 hours/fortnight Guardian #2 80 hours/fortnight
- Combined annual income $145,000
- CCS Rate calculated at 58.99% based on activity and combined income
- Centre hourly rate $8.33* ($100 day fee divided by 12 hour session length)
- 72 hours x $8.33 = $599.76 childcare fees per child/fortnight
Total Fees = $1199.52 for two children
- 58.99% of $1199.52 = $707.04 Childcare subsidy
- A 5% withholding is kept by the Government as a buffer just in case your income estimate changes.
- 5% of $707.04 = $35.35
$671.68 CCS paid to childcare provider
$527.84/fortnight Out of pocket
How much does childcare cost for 1 Child on a Single Parent Income
- 1 child in centre-based childcare services 10 days (120 hours) per fortnightSingle Parent 80 hours/fortnight
- Annual income $70,000
- CCS Rate calculated at 83.99% based on single income
- Centre hourly rate $8.33* ($100 day fee divided by 12 hour session length)120 hours x $8.33 = $999.60 childcare fees per fortnight
- Maximum of subsidised care is 100 hours
- 100 hours x $8.33 = $833
- 83.99% x $833.60 = $700 Childcare Subsidy
- 5% Withholding = $35
$665 paid to childcare provider
$334.60/ fortnight out of pocket
How to keep the childcare costs down
The reality is that the child care subsidy works for some families and not others. It’s not a scheme that will change any time soon and so the best thing to do for your family budget is your homework. When researching different childcare centres, look at the actual cost of the centre. For the hourly rate you pay, what is included? At Little Scholars, our fee is not only competitive, it includes five chef prepared, nutritious meals each day. If you’re currently having to pack meals for your child, work out just how much you could save if you sent your child to a centre with supplied meals (not to mention nappies!) The same goes for extracurricular activities. Perhaps you currently pay extra for your child to attend activities like yoga lessons or soccer. Now, work out how much you could save by sending your child to a childcare centre like Little Scholars where extracurricular activities like this are included in the fee.
The Child Care Subsidy has forced many families to ask the question, ‘How much does childcare cost?’ It certainly pays to sit down and do the maths and work out if you’re currently getting the best deal because choosing a childcare centre with all the bells and whistles is often the better choice.
Make the CCS work for your family. Contact Little Scholars today to find out how we can offer the best value in childcare.
Disclaimer: The information provided in this article is current as at June 2018 and may change. The case studies in this article are examples only. To determine your eligibility and entitlements, please refer to the Centrelink Estimator.
*This hourly rate is an example only.
Find Out Exactly How Much Your Little Scholars Childcare Will Cost
Talk to one of our experienced centre managers now. We can help you work exactly what your Little Scholars childcare will cost and how we can help you get the most from your child’s early education.