What you need to know about the Child Care Subsidy activity test
The Child Care Subsidy is means tested based on the combined family income, the fortnightly activity of families – such as work, study or volunteering – and the type of service a child attends*.
As part of the Child Care Subsidy, the number of hours of subsidised care you are entitled to is based on your level of recognised activity. Understanding the different types of activity that will be recognised is key to maximising your child care subsidy.
What classifies as recognised activity?
The good news is there’s a broad range of recognised activities that you can undertake to maximise your child care subsidy.
- Paid work: includes paid leave, paid or unpaid parental and maternity leave if this is a condition of employment, or being self-employed.
- Study and training: includes being enrolled in an approved course of education or study, or being enrolled in training courses for the purpose of improving the individual's work skills or employment prospects.
- Unpaid work: includes unpaid work in the family business which is owned by a member of the individual’s immediate family, actively setting up a business, or unpaid work experience or internships.
- Actively looking for work: includes looking for job vacancies, preparing résumés and job applications, contacting potential employers, or preparing for and attending job interviews.
- Setting up a business: includes obtaining finance, advice and support, attending and organising meetings and networking, developing business and marketing plans.
- Volunteering: includes voluntary work to improve work skills or employment prospects, voluntary work for a charitable, welfare or community organisation, voluntary work for a school, preschool or a centre based day care service (if the work directly supports the learning and development of the children at the school, preschool or service e.g. reading to children). Note: Being on the Parents and Citizens Committee, working in the school canteen, or coaching children’s soccer team are considered parental duties and would not be considered as a recognised volunteer activity.
The more activity you undertake – the more hours of subsidised care you may be able can claim
Generally, the more hours of activity you do, the more hours of subsided child care you can access – up to 100 hours per fortnight per child.
This is great news for parents looking to increase their work hours, start a new training course or be more involved in the community.
Hours of subsidised care will be determined by the parent with the lowest hours of activity (e.g. if one parent is working 76 hours per fortnight and the other is working 40 hours per fortnight – it will be the lower activity that will determine how many hours of subsided care the family is entitled to). If it’s a sole parent family – the individual must meet the activity test.
Here’s a breakdown of the hours of subsidised care families can receive based on their amount of activity:
- Families in recognised activity 8 – 16 hours per fortnight are eligible to receive 36 hours per fortnight of subsidised care
- Families in recognised activity 16 – 48 hours per fortnight are eligible to receive 72 hours per fortnight of subsidised care
- Families in recognised activity more than 48 hours per fortnight are eligible to receive 100 hours per fortnight of subsidised care
Don’t underestimate how much activity you do!
We know many families are juggling multiple activities at once, but often underestimate how much they do. It is important that if you are undertaking a number of different activities, you include all of them as they all contribute to your subsidy entitlement.
If families are doing multiple activities, these can also be combined to meet the activity test. For example, if you work and study, both activities will be included.
Time taken to travel between the child care service and your place of work, training, study, or other recognised activity will also be included.
The hours of activity a family undertakes does not need to coincide with their child care hours. For example, if a family works over the weekend, they can still use those hours to calculate how many hours of child care subsidy they are entitled to during the week.
What if your activities don’t meet the activity test?
Other activities that do not fall into the recognised activity categories will be assessed by the Government on a case-by-case basis. Families will need to contact Centrelink directly to find out if the activity is supported under the Child Care Subsidy.
If your family earns $66,958^ or less a year, and you do not meet the activity test, you will be able to access up to 24 hours of subsided care per child per fortnight.
If you’re on paid or unpaid maternity or parental leave and this is a condition of your employment, don’t worry – this also classifies as recognised activity. The hours of activity will be the same as what they were immediately prior to you commencing parental leave.
So, if you were working full time then you are still considered to be a full-time employee while you are on parental leave.
If families don’t meet the activity test and have a preschool aged child attending preschool in a centre based day care service, they will be exempt. Families will be entitled to 36 hours of subsidised care per fortnight if the child attends a kindergarten or preschool program at a centre-based day care in the year before they start school (that is two years before grade one of school).
How do I prove how many hours I work, study or volunteer?
Families are responsible for updating their activity via their myGov account or Centrelink and no evidence is required at the time you self-declare. If you don’t already have one, register now for a myGov account as this is how the government will communicate with you.
People who run small businesses or work irregular hours are able to estimate their activity over a three month period. A good way to do this is to look back at your previous three months and use the hours you worked in that period as an estimate.
Your estimate should be for the highest number of hours you might require, even if you don't require those hours every day. This gives you the flexibility to pick up additional hours of work and know that care will be available.
If your irregular hours change that's okay as you can update them whenever you need to. You will do this via your myGov account.
Want to get a subsidy estimate?
You can try our simple subsidy estimator to get an idea of how much child care subidy you could expect to receive – click here to use the estimator.
^This amount is correct for 2018/19 and may be subject to adjustment through indexation in subsequent years.
*There are also eligibility requirements to receive Child Care Subsidy for a child (such as immunisation and residency requirements).
Source: Information sourced from the Department of Education and Training https://www.education.gov.au/ChildCarePackage