From the second of July, the current Child Care Benefit and Child Care Rebate will be scrapped and replaced by the new Child Care Subsidy.
It will be paid directly to childcare services.
Federal Minister for Education and Training Simon Birmingham explains that the new system will be simpler for parents.
Most parents should be better off once the new Child Care Subsidy comes into place.
Currently, many families have their Child Care Rebate capped at 7500 dollars a year per child.
From July, there will be no cap on the amount of Child Care Subsidy most families will receive.
Senator Birmingham says the government wants to make sure that the cost of childcare doesn’t prevent parents from working.
"Far too many families, I've heard, either hit the seven and a half thousand dollar cap and run out of the system to make their childcare bills halfway through the year and then they're really struggling or are working fewer hours as a result of it. So this will eliminate those sorts of inconveniences and help empower people and families to work the hours that suit them, the days that suit them and know that the childcare support will be there for them."
Samantha Page is the CEO of Early Childhood Australia.
She says that it's those families where both parents are working will benefit the most from the new child care scheme.
"For most parents that have regular work, so both parents are working and their work is pretty stable, they'll probably be better off, and they'll be better off for a number of reasons. One is that the childcare subsidy is a bit more generous. The other is that the seven and a half thousand Dollar cap per year that applies to the Child Care Rebate is lifted for a lot of parents so that they won't run out of subsidy the way they have been in recent years. So for most parents who are both working, they'll be better off or about the same."
The amount that a family receives per child will be based on the type of childcare service, the combined family income and the activity level of parents.
To get the maximum amount of subsidy, both parents need to be working several days a week or be doing other recognised activities.
Senator Birmingham says the activity test includes studying, volunteering, looking for work and being on parental leave.
While parents with stable jobs should be better off, Samantha Page says that families where one of the parents is not working full-time could see a decrease in their child care subsidy.
In order to get the maximum or a high amount of the child care subsidy, Samantha Page says parents can prepare ahead of time.
"What they can do is perhaps enrol in some study or sign up as a volunteer or ask for their income to be averaged over, particularly people in casual work can ask for their income to be averaged over a three-month period so that they can continue to receive a subsidy and so their children can continue to attend early learning."
If you're wondering how the changes will affect your family, Senator Birmingham explains that the government is providing an online estimator.
He says that parents will receive more information shortly.
"They will receive further information over the coming weeks if they're currently already in the childcare system. They'll get information from the government about the steps that they’ll need to take ahead of July the second to make sure all of their details and information are up to date so that it's a smooth and seamless transition for them into this new scheme of childcare support."
To find out how the changes will affect your family and use the estimator, go online at education.gov.au/ChildCarePackage.
