3.5.4 Calculating CCS Entitlement

Calculation

CCS eligible individuals (1.1.I.90) will have their entitlement (1.1.E.30) calculated for sessions of care (1.1.S.40) provided by an approved child care service (1.1.A.90) to a child for each week by the following method.

Step 1

Centrelink works out the individual's activity test result for the CCS fortnight.

Example: Jane works 40 hours a fortnight, her activity test result is 72 hours.

Note: Some ACCS entitlements have a deemed activity test result of 100 hours.

Step 2

Centrelink determines if the annual subsidy cap applies for the individual (i.e. families earning above the lower income threshold plus $120,000 per year)

Example: In 2018-19, Jane and her partner (1.1.P.30) earn a combined ATI (1.1.A.20) of $175,000 a year, therefore the annual cap does not apply to their CCS calculation.

If Jane and her partner earned above that amount, the annual cap would apply, i.e. if they had already reached the cap, the entitlement amount would be nil.

Note: The annual cap does not apply to ACCS entitlements.

Step 3

Determine what sessions of care the individual is eligible to claim (1.1.C.27) CCS on.

Example: Jane has her child in child care 5 days a week, however 2 of those sessions are not eligible CCS sessions of care because the child ceased to meet the immunisation requirements (1.1.I.10) part way through the week. The CCS rate will only apply to the 3 CCS eligible sessions of care.

Step 4

Work out the hourly rate the individual is entitled to for the eligible sessions of care.

Example: Jane has her child in a CBDC, which charge Jane $10.00 an hour. The 2018-19 CBDC subsidy cap is $11.77. Based on Jane's combined annual ATI her CCS percentage is 50% of the lower of the hourly fee and the hourly rate cap for CBDC. The hourly rate Jane would be entitled to is $5 an hour (50% of the hourly fee).

Note: Some ACCS entitlements will pay up to 120% of the hourly rate cap.

Step 5

Apply the hourly rate to the remaining activity test hours for the CCS eligible sessions of care.

Example: Jane is entitled to 72 hours of CCS eligible sessions of care per fortnight. The first week of the fortnight Jane had 3 CCS eligible sessions of care, which were 10 hours each. The activity test amount the hourly rate would apply to is 30 hours for the first week. Therefore, $5 Ă— 30 hours = $150.

For the second week of the fortnight, Jane had 5 CCS eligible sessions of care for the week, however she only has 42 activity test hours remaining for the CCS fortnight, therefore her CCS hourly rate would only apply to the remaining 42 hours.

Step 6

The amount of CCS for the week for an individual is either the activity test amount or if the annual cap applies and is met during that week, the difference between the total amount of CCS received already and the annual cap.

Example: Jane has received a promotion at work, due to her promotion her combined annual ATI is $187,000. As she now earns more than the lower income threshold plus $120,000 (in 2018-19 $186,958*) the annual subsidy cap applies to her.

For the CCS fortnight in question, Jane has used $9,900 of the $10,190* annual cap. The first week in the CCS fortnight, she claims 30 hours of CCS at $5 an hour. The amount of CCS paid to her would be $150 bringing her remaining annual cap to $140. In the second week of the CCS fortnight, she claims 42 hours of CCS at $5 an hour. Her CCS amount would be $210, however she only has $140 left before her cap runs out, therefore for the second week in the CCS fortnight she receives $140.

*These amounts are correct for 2018-19 and may be subject to adjustment through indexation in subsequent years.

Note: This process is the same for IHC, however, the calculation only occurs for 1 of the children in care, not all. This is to give effect to the higher 'family rate' of CCS.

Withholding

Prior to any CCS payment being made, a withholding percentage is applied. Withheld amounts of CCS are used to offset potential debts (1.1.D.60) incurred in the future (i.e. at reconciliation (1.1.R.10)). The default withholding percentage for all individuals is 5% of their total entitlement.

Example: Jane's total CCS entitlement for the week is $100. Five per cent of $100 is $5. Therefore, the total payment amount of CCS that Jane's child care provider will receive on her behalf is $95.

The withholding percentage can be changed by Centrelink in order to manage any debt that the individual has, or may have.

Note: There is no withholding applied to ACCS payments.

Act reference: FAAct Schedule 2 clause 1 Amount of CCS

FA(Admin)Act section 67CD Determination of individual's entitlement to be paid CCS or ACCS, section 67EB(3) The withholding amount…

Policy reference: FA Guide 3.5.2.10 CCS - Activity Test - General, 4.6.1.30 CCS - Initial Payments, 6.4.1 Overview of Reconciliation

Last reviewed: 2 July 2018