“For all parents trying to start, run or grow their small-medium business, there are several distinct commonalities that unite them all: an infallible work ethic, unwavering dedication and sometimes a sense that there simply isn’t enough time in the day to get things done,” writes the Minister for Education, Simon Birmingham
Combined with concerns regarding a consistent cash flow and peaks and troughs in billable work, arranging child care can often seem like a big task.
Parents who are small-medium business owners have unique needs and circumstances when it comes to navigating child care, and the current child care system is falling short when it comes to catering for this very important portion of workers.
But come 2 July 2018, the Turnbull Government is introducing a New Child Care Package that will offer better support to parents who work outside the normal 9-5.
A brief overview
Under the New Child Care Package, the current Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy.
There are three key factors that will determine how much Child Care Subsidy families may receive:
- Your combined family income – how much your family earns will determine the percentage of subsidy you are eligible for.
- Your activity level – parents must undertake a recognised activity (like working, studying or volunteering amongst other things) to be eligible for the subsidy, and
- The type of child care service your family uses – the new subsidy will be based on an hourly rate cap, which will vary depending on whether you use centre-based care, family day care or outside school hours care.
We understand how difficult the $7,613^ annual rebate cap can be for families who run out of subsidies before the end of the financial year, so we’re also doing away with it altogether for families earning less than $185,710^, and increasing the cap to $10,000^ for families earning more than that.
How to access your Child Care Subsidy (as a small-medium business owner):
As noted above, parents must be undertaking a recognised activity to qualify for the new Child Care Subsidy. The more hours of activity you do per fortnight, the more hours of subsidised care you can access per child. However, this can sometimes be difficult to predict, with small-medium business owners often adjusting their schedule to accommodate changes in workflow.
Fortunately, if you work irregular hours, you can estimate your activity over a three-month period. A good tip for calculating your hours of activity, if you don’t always work predictable hours, is to look at your previous three months of work to see how many hours you worked in total over that period. Even if you forecast your hours incorrectly, you can update your details at any point throughout the year to ensure that your level of subsidy is accurate.
The Child Care Subsidy in practice (for small-medium business owners)
There are also several measures in place as part of the New Child Care Package to help support small-medium business owners in more practical terms. The new activity test is quite broad so, for example, setting up a new business counts as a recognised activity, although this is time limited to six months in the planning phase. Once your business is up and running being self-employed or working in a family business owned by a member of your immediate family also count as activity.
Another great aspect of the New Child Care Package is that you don’t have to use your subsidised hours on the same day that you work. So, if like many small business owners you work all hours of the night and on the weekend, you can still count these hours as ‘activity’ to use for subsidised child care during the week when you need to juggle other necessities of life.
Also, to help ensure child care services provide flexible and cost-effective child care, we’re reducing regulatory requirements including the hours per day and days per week a service must open. That means services will have the flexibility to offer, for example, shorter sessions of care.
Families should head to www.education.gov.au/ChildCare to get an estimate of how much Child Care Subsidy you may be able to receive under the Turnbull Government’s changes to offer more support for more families. Keep checking in on that website to ensure you know what you need to do to transition to the new system.
^ These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.
Trending
Weekly business news and insights, delivered to your inbox.