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

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

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 find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

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 you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. 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 identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

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.

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

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 can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.