3.5.4 Calculating CCS entitlement
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.
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.
This step (where Centrelink determines if the annual subsidy cap applies) no longer applies from the 2021-22 financial year. Move to 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.
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 charges Jane $10.00 an hour. The 2020-21 CBDC subsidy cap is $12.20. Based on Jane's combined annual ATI of $175,015 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 $5.00 an hour (50% of the hourly fee).
If the individual has more than one child aged 5 or under using child care, the following applies.
Families with more than one child aged 5 or under using child care may receive an additional 30 percentage points on top of their income tested CCS rate for second and subsequent children, up to a maximum rate of 95%.
Example: If Jane had 2 children, who are both aged 5 and under using child care, her income tested CCS rate for her eldest child would be 50%, meaning the hourly rate she would be entitled to is $5.00 an hour (50% of the hourly fee of $10.00). Her CCS rate for her second, younger child would be 30 percentage points higher than the CCS rate for the eldest child, i.e. 80%. This means the hourly rate she would be entitled to for the second child is $8.00 an hour (80% of the hourly fee of $10.00).
Note: Some ACCS entitlements will pay up to 120% of the hourly rate cap.
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, $5.00 × 30 hours = $150.00.
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.
The amount of CCS for an individual for the week, for the sessions of care identified in step 3, is the activity tested amount.
Note: A CCS annual cap, which placed a limit on the amount of subsidy a child could receive per year, applied prior to the 2021-22 financial year. The annual cap was removed from the 2021-22 financial year onwards.
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 $100.00. Five per cent of $100.00 is $5.00. Therefore, the total payment amount of CCS that Jane's child care provider will receive on her behalf is $95.00.
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 Amounts of CCS and ACCS
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 220.127.116.11 CCS - activity test - general, 18.104.22.168 CCS - initial payments, 6.4.1 Overview of reconciliation