3.5.1 CCS - Combined Annual ATI

Summary

Combined annual ATI (1.1.A.20) is 1 of the 3 factors that will determine a claimant's level of CCS (the others being the family's activity test result and the applicable hourly rate cap (1.1.H.20).

This section includes:

• determining an individual's CCS percentage,
• providing an annual income estimate,
• deriving an annual income estimate,
• change in annual income estimate,
• annual subsidy cap.

An individual's actual CCS entitlement (1.1.E.30) for a financial year will be worked out at reconciliation (1.1.R.10), usually after the individual (1.1.I.90) has completed their tax return and they (and their partner's (1.1.P.30) if they have one) actual ATI is known. As an individual's actual ATI is not known during the year, determinations of CCS entitlement are calculated according to the individual's estimate of what their combined ATI will be for the financial year.

Any difference between the amount of CCS an individual was paid during the year based on their estimated ATI and their actual CCS entitlement based on their actual ATI will be corrected at reconciliation (i.e. debt raised if they were overpaid, and a lump sum payment made if they were paid less than they were actually entitled to).

Determining an individual's CCS percentage

The CCS percentage is used to determine an individual's CCS entitlement for a child's attendance at sessions of care (1.1.S.40) at an approved child care service (1.1.A.90).

This table shows the percentage of child care fees the government will contribute based on an individual's combined annual ATI:

Combined annual ATI* Applicable CCS percentage of the actual fee charged or the relevant hourly rate cap (whichever is lower)
Equal to or below \$66,958 85%
Above \$66,958 and below \$171,958

Decreasing to 50%

Subsidy decreases by 1% for each \$3,000 of family income

Equal to or above \$171,958 and below \$251,248 50%
Equal to or above \$251,248 and below \$341,248

Decreasing to 20%

Subsidy decreases by 1% for each \$3,000 of family income

Equal to or above \$341,248 and below \$351,248 20%
Equal to or above \$351,248 0%

*The lower income threshold (\$66,958) will be indexed by CPI at the commencement of each financial year and the other thresholds will be increased accordingly. The figures in this table relate to the 2018-19 income year (for CCS purposes 2 July 2018 to 30 June 2019).

Families with incomes of \$351,248 or more have an applicable CCS percentage of 0% - that is, they are not entitled to CCS.

Providing an annual income estimate

All individuals are required to provide a 'reasonable' ATI estimate at claim for CCS, irrespective of whether they receive an income support payment (1.1.I.50). Where an individual is a member of a couple (1.1.M.50), the individual will need to provide an estimate of both their and their partner's ATI for that year.

Individuals will also be required to provide a reasonable ATI estimate for each new financial year.

Policy reference: FA Guide 4.9.1 Overview of New Financial Year Assessments, 4.9.3 Outcomes of New Financial Year Assessments

Change in annual income estimate

When a family experiences a change in circumstances that affects their eligibility and/or entitlement they are required to notify Centrelink of this new information as soon as possible. This means individuals are required to give a new income estimate when a change in circumstances (such as starting a new job) means the current ATI estimate is no longer accurate.

When an individual provides a new ATI estimate, it will be applied from the beginning of the next CCS fortnight (1.1.C.10). If an individual's income changes (e.g. they start a new higher paying job), they should update their ATI estimate as soon as possible to ensure future payments are based on current information (and reduce the risk of debt at reconciliation).

Annual subsidy cap

An annual subsidy cap of \$10,190 per child applies if the family's combined actual ATI for the income year exceeds \$186,958. There is no subsidy cap if the actual ATI is \$186,958 or less.

The annual subsidy cap only applies to CCS payments. ACCS payments are not subject to the annual subsidy cap.

Act reference: FAAct Schedule 2 clause 3 Applicable percentage

Policy reference: FA Guide 3.5 CCS Entitlement, 3.5.2 CCS - Activity Test, 3.5.3 CCS - Hourly Rate Caps

Last reviewed: 2 July 2018