What does the New Child Care Package mean for my family?

What does the New Child Care Package mean for my family?

If you’re one of the millions of Australians who rely on childcare, it’s important to understand what the federal government’s New Child Care Package offers when it becomes effective on July 2 this year.

There are several key areas of the package which have been significantly overhauled by the government in a bid to provide greater relief to low- and middle-income families, who are deemed to have the greatest financial need.

The New Child Care Package is also likely to offer a fresh financial incentive to those families who may have a parent or carer considering weighing up whether to return to work, by providing a range of options that were not previously available to them.

And if your family is currently using childcare services, you would be encouraged to review your existing arrangement to see if it remains the most financially effective solution for your circumstances after the new package comes into effect.

Essentially, the New Child Care Package eliminates the current multi-payment system and replaces it with one central means-tested and employment-related structure. Key features include:

One new subsidy to replace the current childcare rebate and benefit structure

The new subsidy assessment test for families will be calculated based on three main elements related to each family’s individual circumstances. These are:

  • The combined family income
  • The work level of each parent
  • The type of childcare service being used

In terms of employment, both parents will have to work to satisfy the eligibility criteria and will need to be employed, study or volunteer for at least eight hours per fortnight.

If your work level does not meet the minimum hours, you can expect to receive 12 hours of child care if you earn less than $65,710. However, if your family income exceeds that figure and you don’t meet the work level criteria, you will not receive any subsidy.

Based on the calculation method for the new package, once you qualify for the level of work activity, the estimated subsidy amounts equate roughly to the following income figures:

  • Families earning $65,710 or less will have 85 per cent of childcare fees covered
  • The maximum subsidy amount decreases gradually down to 50 per cent once you’re earning $170,710 and remain around that level for those earning up to $250,000.
  • If you’re earning between $250,000 and $340,000, the subsidy reduces to around 20 per cent
  • If you are earning over $350,000, you will not be eligible for any subsidy

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Claim amounts are based on a set maximum hourly rate for different forms of childcare services

Under the New Child Care Package, the maximum subsidy you can claim for the childcare service you choose is based on the following hourly rates:

  • $11.55 for centre-based day care
  • $10.70 for family day care
  • $10.10 for outside school hours care

If you pay more than this through your childcare provider, you will have to financially cover the difference.

Changes to the annual cap

There will be no annual cap on subsidies for families with an income up to $185,710, but if your family is earning more than that, you will only be able to claim $10,000 per child.

Bonus subsidy for families with special identified needs

Under a newly introduced childcare safety net, there will be a bonus subsidy for those families who are determined to be disadvantaged, who may have children who are vulnerable or at risk of abuse and neglect; those experiencing temporary financial hardship; those from regional and remote communities; and for grandparent carers on welfare.

This allows those children to have access to education and childcare that may not ordinarily be available to them, and may potentially equate to childcare which is completely subsidised for full-time attendance of 50 hours per week.

Rules on method of payment and child eligibility

The new subsidy, officially called the Child Care Subsidy, will be paid directly to service providers so that it can be passed onto families as a fee reduction.

You can then make a co-contribution to your childcare fees and pay your provider the difference between their fee and the subsidy amount.

In terms of a child’s eligibility, there are some basic requirements which include:

  • The age of the child (must be 13 or under and not attending secondary school)
  • The child meeting immunisation requirements

The working members of the family must also meet the residency requirements.

For all families investigating whether they will qualify for childcare assistance under the new guidelines, and at what level, the government has a dedicated family Child Care Subsidy estimator. This will allow you to estimate your subsidy entitlement before existing arrangements change on July 2.

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Learn more about bank accounts

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Can I set up a bank account online?

Most Australia-based lenders will allow you to set up a bank account online. Requirements vary from lender to lender, but you will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary ID.

How do you change your account name on NAB banking?

Changing the name on your NAB bank account is straightforward, as long as you have the right documents.

If you’ve just got married, divorced or legally changed your name, here’s what you need:

  • Married – a marriage certificate
  • Divorced –your ‘decree nisi’
  • Legal name change –your legal name change certificate

You can take either the original document, or a certified copy, into a NAB branch, where it needs to be sighted by a bank employee and a copy taken.

Your NAB bank account name will be updated immediately. New debit, ATM and credit cards with your updated name will also need to be issued. These usually take between five to 10 working days to be posted out to you. Your existing cards will keep working until you activate your new ones.

If you haven’t legally changed your name, but just want to change your account nicknames, you can log onto NAB and do it through the Settings/Mailbox menu.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

How do I open a bank account for a baby?

If you’ve just welcome a new baby into the world, congratulations. Opening a bank account for your child can be a wonderful first gift.

Before you can open your child an account, you’ll need to have a birth certificate or passport for your baby.

As the parent or guardian, you’ll also be listed as a joint holder on the account. This means you’ll need to have proof of your identification and address (a driver’s licence, passport, birth certificate or Medicare Card).

Many banks and credit unions offer baby banks accounts. Usually, you can apply online; otherwise you can head into a local branch or office with your documents.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

How can I check my bank account balance online?

Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.