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Child care discount for early childhood workforce

From 24 January 2022, child care providers can choose to offer a discounted fee to employees with children enrolled at one of their services.

The discount will not affect the employee’s Child Care Subsidy (CCS) entitlement. This measure will support providers to attract and retain their early childhood workforce.

Who can get a discount?

Providers can offer discounts to employees who:

  • are employed, contracted or engaged as an educator or early childhood teacher, and
  • are working at a Centre Based Day Care or Outside School Hours Care (OSHC) service, and
  • have a child enrolled in an early childhood education and care service where they work or is owned by their provider.

A centre director or OSHC coordinator who has an early childhood education and care qualification and is working at a service would be considered an educator or early childhood teacher and be eligible for a discount.

How much can a provider discount?

It’s up to a provider how much they want to discount. The employee must still pay at least 5% of the gap fee.

What is the gap fee?

Families who get CCS must make a co-contribution to their child care fees. They do this by paying the difference between the provider’s fee and the CCS amount. This is known as the gap fee.

CCS is usually calculated on the actual fee a family is charged, after any discounts are applied. This change allows discounts to be applied for employees after CCS has been applied.

Do providers have to offer discounts?

Providers do not have to offer discounts. The measure is optional.

What do providers have to do?

Usually, if a provider offers a family a discount, the provider must report the discounted fee in session reports. The family’s CCS is then calculated based on the discounted fee.

From 24 January 2022, providers can offer a discount to employees and report the full fee. This will ensure the employee’s CCS entitlement is not affected.

Example – how it works

Katherine is an educator at a Centre Based Day Care service. Her average family income is $110,000 and her family’s CCS rate is 71.67%.

Katherine’s child attends 3 days at the same service. The service charges a daily fee of $106.50 for a 10-hour session.

Katherine’s total weekly fee comes to $319.50 ($106.50 x 3). After CCS is applied, the service charges her a gap fee of $90.51 ($319.50 – $319.50 x 71.67%) per week.

From 24 January 2022, the service can offer Katherine a discount on her gap fee. She must pay at least 5% of the gap fee.

If the service offers a discount of $20 per session of care, Katherine’s gap fee would be $30.51 per week.

If the service offers a discount of $30 per session of care, Katherine’s gap fee would be $4.53 ($90.51 x 5%) per week instead of $0.51 ($90.51 – $30×3) as she must pay at least 5% of the gap fee.

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CCS News

Breaking News: Higher CCS for multiple children and removal of annual cap brought forward

From 10 December 2021, the annual cap will be removed for all families who get CCS.

From 7 March 2022, families with more than one child in care will get a higher subsidy.

Annual cap

Families earning more than $190,015 (2021–22 terms) have an annual subsidy cap of $10,655 per child each financial year.

From 10 December 2021, this annual cap will be removed for all families who get CCS.

Families with more than one child in care

From 7 March 2022, families with children aged five or under in care will get a higher subsidy for their second child and younger children.

Who will be eligible?

Families may be eligible if they:

  • earn less than $354,305
  • have more than one child aged five or under in child care.

Who gets the higher subsidy?

Services Australia will work out which children get the higher subsidy by:

  • assessing all children in the family unit
  • identifying the standard rate child
  • identifying the higher rate children.

The standard rate child will get the standard CCS subsidy. Younger children will get a higher subsidy.

The standard rate child is the eldest child in the family unit aged five or under who is eligible for CCS and attending care.

How much do higher rate children get?

Eligible higher rate children will receive a 30% higher subsidy, up to a maximum 95%.

Children eligible for the higher CCS rate will have the increase automatically included in their CCS percentage reported to services.

Additional Child Care Subsidy (ACCS)

Children who are entitled to both the higher CCS rate and Additional Child Care Subsidy (ACCS) will be paid the ACCS rate.

In Home Care

Sessions of In Home Care do not attract the higher subsidy for younger children. This is because In Home Care is subsidised on a family rather than per child basis.

However, children aged five or under in In Home Care are included in the family unit when determining the standard rate child.

A family with their standard rate child in In Home Care will get the higher subsidy for younger children who attend care.

What do families need to do?

Families already getting CCS don’t need to do anything. Services Australia will automatically increase the CCS for eligible second and younger children.

Families will be eligible for the higher rate from 7 March 2022.

For families new to CCS, a child must receive a session of care before they can be considered the standard rate child.

All CCS-eligible children aged five or under are counted in a family unit when determining the standard rate child, and the higher rate child/children.

For families with children born on the same date, Services Australia will automatically determine which child is the standard rate and apply the higher rate to other children.

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CCS News

Enhanced Child Care Subsidy from July 2022

From July 2022, families will receive more support from the Australian Government with the Child Care Subsidy (CCS) set to be increased for families with multiple children under the age of 6, and the annual cap removed.

Overview

From July 2022, families will receive more support from the Australian Government with the Child Care Subsidy (CCS) set to be increased for families with multiple children under the age of 6. These changes are subject to the passage of legislation.

The changes include:

  • increasing the Child Care Subsidy for families with more than one child in care under the age of 6, and
  • removing the annual cap.

These measures will lower out-of-pocket costs for more than 250,000 families in 2022–23, with the Australian Government investing an additional $1.7 billion through CCS.

Families with children under 6 face higher child care costs and these are compounded where a family has more than one child. Thanks to the subsidy increase, families with multiple children aged under 6 in care will pay less in child care fees.

Increased subsidy for families with multiple children

From July 2022, the Australian Government will increase a family’s CCS if they:

  • earn under $353,680 (2020–21), and
  • have more than one child aged under 6 in care.

The Australian Government will increase the subsidy by 30% (capped at 95%) for their second child and subsequent children aged under 6 in care.

The increased subsidy will not apply to In Home Care sessions as IHC is subsidised on a family rather than per child basis.

Removing the annual cap

Families earning more than $189,390 (2020–21) now have an annual subsidy cap of $10,560 per child each financial year.

From July 2022, the Australian Government will remove this annual cap.

For more information please visit the official Enhanced Child Care Subsidy information page.