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Australian child care rebate changes: How to make sense of your entitlements

The situation with Child Care Rebates and Benefits in Australia is confusing, to say the least – and recent changes announced by the Rudd Government make it even more difficult to understand.

So, we’ve done the research for you to show you exactly what child care related financial assistance is available to you as a parent.

Baby in daycare

Child Care Rebate

The federal government has recently made changes to the Child Care Rebate, a financial aid that assists parents or guardians who are working, studying or training to manage their out of pocket child care costs.

The Child Care Rebate is not income tested, and provides you with a rebate of 50% of your out-of-pocket child care costs, up to the annual cap. From July 1 2010, the annual cap is set at $7,500 per child per year, with the rebate paid quarterly in arrears.

This means that if you spend $15,000 annually on child care for one child, you will receive an annual rebate of $7,500, payable in quarterly refunds of $1,875.

Eligibility: To receive the Child Care Rebate you must claim Child Care Benefit; you must be an Australian resident (or appropriate Visa-holder); and you must use an approved child care provider.

Child Care Benefit

The Child Care Benefit is a different payment to the Child Care Rebate, as it is based on your income, and is therefore different for everyone.

As of March 1 2010, an annual household income limit of $131,560 applies for families with one child, $136,375 for two children, and $153,995 for three children, with an additional $29,077 for each child after the third.

You are limited to 24 hours care per child per week, unless you meet the work, training, study test, in which case you can get up to 50 hours care per child per week.

The current rate for a non school-age child in up to 50 hours of care per week is $3.60 per hour or $180 per week. Payment rates for school-age children are 85% of the non school-age rate. Most families using approved child care receive the Child Care Benefit as a fee reduction at the time they pay their fees, while others receive it as a lump sum at the end of the year.

Eligibility: You may qualify for Child Care Benefit if you use approved or registered child care, and your child is immunised (or on an immunisation catch up schedule, or is exempt from the immunisation requirements), and you are responsible for paying the child care fees for your child.

In addition to these rebates, you may be eligible for financial aid in the form of the Baby Bonus or the Family Tax Benefit.

If you would like further information on the Child Care Rebate or the Child Care Benefit click here, or to discuss your personal circumstances, call the Family Assistance Office on 13 61 50, or visit your nearest Family Assistance Office.

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