1.2.6 Child care subsidy (CCS) - description
Objectives of CCS
CCS aims to:
- assist families with the cost of child care
- facilitate individuals (1.1.I.90) to participate, or increase their participation, in the workforce
- facilitate children's attendance in child care to support their early learning and development.
Individuals' eligibility for CCS is determined in relation to each session of care (1.1.S.40) delivered by an approved child care service (1.1.A.90). An individual is eligible for CCS for a session of care provided by an approved child care service to a child if, at the time the session is provided:
- the child is an FTB or regular care child (1.1.R.21) of the individual or their partner (1.1.P.30)
- the child is 13 years of age or under and does not attend secondary school (unless the child is a member of a class prescribed by the Minister who can be eligible despite not meeting this criteria (184.108.40.206))
- the child meets immunisation requirements, and
- the individual, or their partner, meets the residency requirements.
An individual is eligible for CCS for a session of care if, in addition to meeting the 4 criteria above:
- the individual, or their partner, has a genuine liability to pay for the care under a CWA (1.1.C.52), and
- the session of care
- is provided in Australia (1.1.A.120)
- is not provided as part of the compulsory education program in the state or territory where the care is provided, and
- is not provided in circumstances outlined in CCSMinRules section 8.
In addition, there are circumstances where there is no eligibility for a session of care, as well as limitations on eligibility.
The amount of CCS an individual is entitled (1.1.E.30) to is dependent upon:
- the individual's and their partner's, if they have one, combined annual ATI (1.1.A.20)
- the activity level of the individual and their partner, if they have one
- the type of approved child care service used, and whether the child attends school (1.1.C.18), and
- whether the individual, or their partner, has 2 or more children aged 5 or under using child care.
Higher CCS for multiple children
Families with income below $362,408 and more than one child aged 5 or under in care can get a higher subsidy for one of more of their children, up to a maximum 95%.
To receive the higher subsidy, an individual must meet the eligibility requirements for CCS (2.6.1).
From 10 July 2023, the rates for each child are worked out using 2 separate income tests.
Services Australia will work out which children get the higher subsidy by:
- assessing all children in the family aged 5 or under
- identifying the standard rate child (1.1.S.104), and
- identifying the higher rate child/ren (1.1.H.15).
The ‘standard rate child’ is usually the eldest CCS eligible child aged 5 or under. From 10 July 2023, the standard rate child will get the standard CCS rates.
The ‘higher rate child’ is the second and any younger children aged 5 or under. The higher rate for second and younger children is calculated using the higher CCS rate (3.5.1).
For children born on the same day, Services Australia will automatically determine the standard rate child, unless an individual or their partner requests a different order.
Children entitled to both the higher CCS rate and ACCS (1.2.7) will be paid the ACCS rate.
Sessions of IHC do not attract the higher subsidy. However, children aged 5 or under in IHC are counted as part of the family for the purposes of determining the standard rate child.
How CCS is paid
CCS is paid to approved providers to pass on as a fee reduction to individuals. In limited circumstances CCS may be paid directly to individuals prior to reconciliation. Any subsidy owed to the individual after reconciliation (1.1.R.10) is paid directly to the individual as a lump sum.
Act reference: FAAct Schedule 2 Amount of CCS and ACCS, section 85BA Eligibility for CCS
FA(Admin)Act section 67EB Payments to providers of individuals' entitlements to CCS or ACCS by fee reduction, section 67EC Payment directly to individuals of entitlements to CCS or ACCS
CCSMinRules Part 2 Division 1 Eligibility for CCS and ACCS, section 16 Determining hourly rate cap that applies for a session of care
Policy reference: FA Guide 2.1.2 Australian residence & portability, 2.1.3 Immunisation & health check requirements, 2.6.1 CCS eligibility, 220.127.116.11 CCS - Australian residency exceptions, 18.104.22.168 CCS - immunisation approved exemptions, 22.214.171.124 CCS - eligibility for children aged 13 & under & attending secondary school or aged 14 or above, 2.6.3 CCS eligibility - attending secondary school, 2.6.5 CCS - requirements relating to CWA, 3.5 CCS entitlement, 3.5.1 CCS - combined annual ATI, 126.96.36.199 CCS - activity test - general, 3.5.3 CCS - hourly rate caps, 3.5.4 Calculating CCS entitlement, 188.8.131.52 CCS - initial payments, 6.4.1 Overview of reconciliation