The changing child care rebate - some questions

someguycalledpaul on 26/06/2018 - 19:42

Hi all,

We're recently new to the parenthood game, our little one has just passed nine months of age and will be starting child care in Late August.

My query is just in relation to the child care rebate. We've read through the DHS website (https://www.humanservices.gov.au/individuals/services/centre…) but some things are not clear to us:

Effectively the subsidy is calculated based on four variables:
* your family’s income
* the hourly rate cap based on the type of approved child care you use,
* your child’s age, and
* the hours of activity you and your partner do

Question 1: Calculation of the 'Hourly' rebate
  • Currently we understand that child care facilities charge per day with '~$110-150' the going rate currently.
  • The new subsidy appears to be calculated on 'hours of activity' we do.

Are we moving to a model where we will be charged by the hour from childcare centres? (Rather than the daily flat rate we are currently quoted?).

How are the fortnightly 'hours of activity' determined? Our employee contracts may say you need to work a minimum of 7.5 hours a day, but the reality of how much you work might be very different (not to mention travel time)

Question 2: Calculating house hold income:
  • I've read The subsidy is linked to household income. At one point they discuss income 'estimate' then reference comparing this to your 'adjusted taxable income'

Simplistically, this is your taxable income post deductions/netlosses etc - is this correct? Also, I assume this would exclude employee super contributions but would include amounts salary sacrificed into super?

We are just trying to prepare ourselves for the cost of childcare and it would be great if we could estimate what we are up for ahead of time.

Financial

Comments

  • JimmyF on 26/06/2018 - 20:10
    -6

    We are just trying to prepare ourselves for the cost of childcare

    If you're worried about the cheap as chips gov pays most of it childcare, then you have a world of pain ahead having kids.

    • someguycalledpaul on 26/06/2018 - 20:42
      +1

      Thanks for your post JimmyF. Just trying to get informed.. no need to jump to conclusions!

      • JimmyF on 26/06/2018 - 22:18
        -7

        Just trying to get informed

        and I was informing you, you have bigger outlays coming your way!

        So who is jumping to conclusions?

        • idonotknowwhy on 04/07/2018 - 12:12

          So who is jumping to conclusions?

          u

        • JimmyF on 04/07/2018 - 13:26

          @idonotknowwhy: such value add you have added weeks after this thread was posted. How did he world live without your input to this topic!

  • bonezAU on 26/06/2018 - 20:18
    +1

    The best thing you can do is find a child care centre and ask them to give you a quote based on your specific details.

    Our centre used to only offer 11.5 hour days, which you were charged even if your child was only there for 7 hours, now they offer a 9, 10 and 11.5 hour session choice but with fixed session times, eg. if you want to drop your kid off at 6:30am when they open the door, you have to go for the 11.5 hour session. If you want to drop them off at 7:30am, you can go for the 10 hour, 8:30am for the 9 hour.

    They put their prices up as well from the 2nd July when this new package comes in, I knew they'd do it… The new childcare package will work out a lot better (cheaper) for us than the old system.

    • someguycalledpaul on 26/06/2018 - 20:43

      Thanks Bonez,

      We are still on the waiting list for childcare places - who knew it would be so hard to get into them!

    • burningrage on 26/06/2018 - 21:15
      +1

      I heard differently from child care operators and parents who all but one said they will all be worse off. Mine will be worse off.

      So good if you're better off. The operator jacked up the price to be soooo close to the cap limit which is obviously a greenlight for them to jack up to this price (ie: They used the govt cap rate as a price signal).

      So if you're used to be on $9 per hour, they jacked it to $11.77 because that MUST be the reasonable rate to charge. Happened to us.

  • PR0r on 26/06/2018 - 20:46
    +1

    Q1: My understanding is that the hours are purely to do with your centrelink payments. You'll still be charged the same rate per day regardless of what block of hours you pick, and just like before if your child is there for only 1 hour, or 6, it's the same day fee.
    Once you use up your allocated hours, you'll be paying full rates. And if you get 0 hours, it's full rates all the time(as before).

  • burningrage on 26/06/2018 - 21:10
    +4

    Question 1.

    If your centre opens from 6am to 6pm, then your daily rate of $120.00 would be $10.00 per hour which is under the cap. If your centre opens from 7am to 5pm and your daily rate is $120, then your hourly rate would be $12.00 per hour which is above the cap of $11.77 per hour. Your 23cents per hour will NOT be subsidized (ie: If your rebate is 50%, then 23cents per hour of your hourly rate is NOT rebateable. Out of pocket)

    This is why G8 Education now introduces 9, 10, and daily rates because it is hourly based subsidy. However, if you're on daily rate, your centre should (and anyone can correct) convert into your full opening hour as the basis of rates.

    Activity has nothing to do with the rates but instead gives out the entitlement subsidized hours and it will count the partner that does LEAST hour of work. Ie: Partner A 76hrs per fortnight and Partner B 10hrs per fortnight means 36hours max of subsidized hours out of max of 100 hours per fortnight.

    Question 2.

    Combined family income = ATI because if you go to Centrelink now and do a quote, they will use exactly the same questions as asking ATI (ie: Bring back investment loss, etc) but your RFB WILL NOW be included at FULL rate instead of 50% as it was last year.. I never quite agree with ATI but this is the country we live.

    • sagrules on 27/06/2018 - 08:17
      +1

      Thanks for the explanation, much more clear then what I was told by Centrelink. What is RFB?

      • burningrage on 30/06/2018 - 23:34

        Reportable Fringe Benefit.

        Prior to 2017, Reportable Fringe Benefit amount was reported at appx 51% of the total benefit value, which reflected the fact that FBT was charged at 48.5% or something around that rate.

        Post 2017, Reportable Fringe Benefit amount is now calculated at full 100% of the total benefit value effectively assuming if you have a salary packaging of say $5,100 worth of benefit. Your Group Certificate will now show your RFB as $10,000 as opposed to $5,100 as was the case.

        What this means is that it effectively makes you as if you are richer in paper but not in actual fact. ATO assumes that because you received $5,100 worth of benefit then you MUST be earning $10,000 (49% tax) but many people who salary packaged may not necessarily at that 49% tax bracket.

        So depending on your other income, suddenly your ATI is much higher thereby denying or lowering some of your benefits eg: Child Care Subsidy and particularly, Private Health Insurance Rebate where suddenly your subsidy drops from top tier (25%) to 3rd tier (12% or something).

        So unless you work for PBI, BEST NOT TO SAL SACRIFICE or consult your accountant. If you work for charity, you only get Rebateable status. People will be tempted to do salary sacrifice but because they are not PBI, they will be whacked 100% RFB and could lose their centrelink, PHI rebate, Child Care subsidy, etc.

        It's a trap!

        https://theaimn.com/sneaky-fringe-benefits-changes-cruel-blo…

  • Wibbleman on 26/06/2018 - 22:01
    +1

    Use the payment finder to estimate
    https://www.centrelink.gov.au/custsite_pfe/pymtfinderest/pay…

  • idonotknowwhy on 04/07/2018 - 12:17

    I feel like we need a wiki page for this. The centrelink pages are written by lawyers and sometimes go offline or require you to submit personal information (granted, I'd just enter some profanity) just to get an estimate.

    • someguycalledpaul on 07/07/2018 - 18:04

      happy to develop one - can you let me know where I get started?

  • trex on 26/07/2018 - 19:27

    We’ve been unexpectedly hit by the new CCS with vacation care. Centre opens from 6.15am to 6pm ie 11.75hours a day. With the 100hours per fortnight cap we can only get CCS for 8.5 days for every 10 days of vacation care. I’m now dreading the end of year school holidays.

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