Child Care Rebate (previously Child Care Tax Rebate [CCTR])

The New Child Care Package from 2 July 2018 includes a new Child Care Subsidy, which replaces the Child Care Benefit and Child Care Rebate.

The Child Care Subsidy will be paid directly to services.

On 1 July 2009 the Child Care Tax Rebate was re-named the Child Care Rebate, because the rebate is no longer a tax offset. 

Eligibility

You may be eligible to claim the rebate if you:

> are eligible for the Child Care Benefit (CCB) – even if the rate is reduced to zero because your family income is above the threshold.

> and your partner meets the CCB work/training/study test (or be otherwise eligible for up to 50 hours of CCB per week), and

> use ‘approved’ child care (does not include ‘registered’ care).

Means Testing

The rebate itself is not means tested.  However entitlement to receive the Child Care Benefit will be reduced for those on higher incomes. 

NB: High income earners who otherwise qualify for CCB may therefore be entitled to the Child Care Rebate.

‘N/A’ - For child care costs incurred during the 2006/2007 financial year and onwards the Child Care Rebate is a payment delivered through the Family Assistance Office.

Note1: From 1 July 2011 families can opt to have the child care rebate paid fortnightly or paid directly to a childcare centre to reduce fees.  The current system of receiving a lump sum every 3 months will still be available.

From 1 July 2008, the rebate increased to 50% of eligible out-of-pocket child care costs net of any child care benefit received, up to $7,500 (indexed) per child per year to be paid quarterly instead of annually in arrears. The first payments were made in October 2008.  

The Family Assistance Office will collate attendance information from child care centres and will automatically calculate the child care benefit (if any) and child care rebate payable.  They will then pay this rebate directly into the carer’s bank account. 

While payments can be made quarterly, if you claim Child Care Benefits as reduced fees, your actual entitlement to Child Care Benefit and the Child Care Rebate will not be calculated until the end of the financial year.  Therefore, if your circumstances change during the year, you may end up being over or under paid.  It is therefore important to alert Centrelink to changes in your work and income levels.

Delayed payment - you may not receive your rebate for the last quarter until your tax return for that year has been assessed by the ATO.  

Up to 30/06/08, the rebate was 30% of your out-of-pocket expenses up to a maximum per child as set out in the table below.  Out of pocket expenses are total child care fees for approved care, less actual CCB entitlement.

For “out of pocket” expenses incurred between 1 July 2004 and 30 June 2006 the 30% Child Care Tax Rebate was claimed in the following year’s tax return as an offset and was not refundable if it was not used to reduce tax.  A taxpayer’s unused rebate could be transferred to their spouse, but only after the taxpayer’s tax assessment had been issued.

For expenses incurred from 1 July 2006 onwards, the Child Care Tax Rebate became a refundable rebate and is paid directly by the Family Assistance Office (FAO).  It is not claimed in your Tax Return for the year ended 30 June 2008 and onwards

In relation to expenses incurred between July 2006 and June 2007 FAO payments commenced from September 2007, following the lodgement of the relevant 2006/2007 tax returns and once the child care service(s) had reported how much out of pocket expenses were incurred.

Families with out-of-pocket expenses in both 2005/06 and 2006/07 received two offsets in 2007/08.  One offset was paid through the tax system and the other was received as a direct payment from the Family Assistance Office.