Every parent knows that the cost of child care can be extremely expensive.  But, are you missing out on up to $7500 in childcare assistance?  Thousands of eligible Australian families are not claiming financial assistance to help them fund the high costs of child care.  This could make a big financial difference to your family so it’s important you find out if you’re eligible.

Child Care Benefit vs Child Care Rebate

Perhaps one of the main reasons for many eligible families not claiming childcare assistance is confusion about the differences between the Child Care Benefit and the Child Care Rebate. The main difference between these is that the Child Care Rebate is not means tested, whereas the Child Care Benefit is.  This can mean that families who do not qualify to receive the Child Care Benefit because they exceed the maximum income test threshold, may still be eligible to receive the Child Care Rebate.

Here are the main features of the Child Care Benefit and Child Care Rebate to help you understand the differences:

 

Child Care Benefit

What is it?

The Child Care Benefit helps to supplement the cost of child care by providing a payment to families with children in approved child care.  Types of child care covered include long day care, family day care, occasional care, outside school hours care, vacation care and registered care.

Who is eligible?

In addition to other eligibility requirements, (e.g. minimum hours worked by the primary caregiver and the type of child care), the Child Care Benefit IS income tested.  The income limit per family varies depending upon the number of children in child care.  As an example, for a family with 2 children in child care, the maximum income limit as of September 2011 is $143,095.  The Child Care Benefit is not asset tested.

How much is it?

The amount of Child Care Benefit you could receive depends on the number of children in child care and your yearly family income.  The maximum benefit is payable to families with annual incomes of less than $39,785 or families on income support.  As an example, the current rate as of September 2011 for a non school-age child in approved care for up to 50 hours per week is $3.78 per hour ($189 per week).

 

Child Care Rebate

What is it?

The Child Care Rebate is a government rebate designed to offset some of the cost of child care.

Who is eligible?

The standard eligibility requirements of the Child Care Benefit also apply to the Child Care Rebate (e.g. minimum hours worked by the primary caregiver and the type of child care), however there is NO income test for the Child Care Rebate.

How much is it?

The Child Care Rebate covers 50% of out-of-pocket child care expenses for approved child care up to the maximum amount of $7500 per year, per child.  The rebate can be paid either to you, or directly to the child care provider.

 

Other Types of Child Care Assistance

It is also worthwhile noting that if you are the primary caregiver of a grandchild you may be entitled to receive the Grandparent Child Care Benefit.  This benefit is similar to the Child Care Benefit and covers the full cost of child care for up to 50 hours per week per child.

 

Get More Information about Child Care Financial Assistance

For more information about the Child Care Benefit and the Child Care Rebate, or to check if you’re eligible, visit www.familyassist.gov.au

Our financial planners in Sydney can help you be certain that you’re not missing any benefits or income you may be entitled to.  Call a Sydney financial adviser today on 1300 886 018 to arrange a complimentary financial planning meeting.

 

Download our FREE Ebook – Financial Planning for Baby

Raising children can be an expensive business.  To help you map out your finances when raising a family, download our free financial planning Ebook Financial Planning for Baby.  In it you’ll find lots of helpful financial tips from our expert financial planners.

 

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