The cost of child care is often overstated in the mass media, and just as often understated by Ministers and the Government of the day when they are talking about what a great job they are doing as opposed to their predasessors. The true cost of childcare is a very individual calculation, hopefully this article will give you a little more insight into how childcare fees work and what it is likely to cost you, your real out of pocket childcare cost.
So lets take a look at 2 scenarios…
1 – The cost of Child Care for a family 2 Days a week.
This is the first time you are looking at childcare, perhaps you are heading back to work soon, after having spent the first year of life at home with your little treasure, you are going back to work 2 days a week to see how it goes and get yourself back to some grown up conversations.
the centre you have chosen charges $80 per day for your child to attend, lunch and all meals are provided, the only thing you have to do is put nappies in your child’s bag each day. This centre bills you weekly ,so each week they are charging you $160… but that is not what you will pay… you have contacted The Department of Human Services and you are eligible for childcare benefit, which in your case is an immediate 50% reduction in your childcare fees, bringing your “out of pocket childcare costs” to $80 for the week… However, you are also entitled to a 50% rebate on your “out of pocket childcare costs” which in this case is $40, and you have selected to have this rebate paid directly to the centre. This means that for your 2 days of care your total out of pocket cost is $40… not $160…
Centre Charges $160 for 2 days care. ($80 per day)
Less immediate childcare benefit of $80 (100% CCB reducing fees by 50% = $40 per day)
Less your Childcare Rebate of $40 (50% CCTR paid directly to centre)
Your out of pocket childcare cost – $40 for 2 days care or $20 per day.
2 – The cost of Child Care for a family 5 days a week.
Ok, lets say that as per scenario 1, this is the first time you are looking at childcare, perhaps you are heading back to work soon, after having spent the first year of life at home with your little treasure, but you are going b0ack to work 5 days a week because there are bills to pay and leave is running out and you want to get yourself back to some grown up conversations.
the centre you have chosen charges $80 per day for your child to attend, lunch and all meals are provided, the only thing you have to do is put nappies in your child’s bag each day. This centre bills you weekly ,so each week they are charging you $400… but that is not what you will pay… you have contacted The Department of Human Services and you are eligible for childcare benefit, which in your case is roughly an immediate 50% reduction in your childcare fees… so your out of pocket childcare cost is more likely to be $200 a week… However, you are also entitled to a 50% rebate on your “out of pocket childcare costs” but here is where it gets complicated, this rebate stops at $7,500 per annum, or about $144 a week for the year. In your case you would receive about $100 off your fees for the rebate, and you have selected to have this rebate paid directly to the centre. This means for your 5 days of care your total out of pocket cost is $100… not $400…
Centre Charges $400 for 5 days care. ($80 per day)
Less immediate childcare benefit of $200 (100% CCB reducing fees by 50%)
Less your Childcare Rebate of $100 (50% CCTR paid directly to centre capped at $7500)
Your out of pocket childcare cost – $100 for 5 days care or $20 a day
The above scenarios probably don’t help if you are a single parent or carer, but the rules do change quite a bit for these circumstances, your best bet is to have a look at this article and guide, it has all the information and contact details you will need.
After all of this, you are still best to talk to the centre you are looking to book in to about the fees and your out of pocket child care costs. A quality childcare centre should be able to give a personalised quote detailing exactly what your costs will be depending on the various options you choose.
For more specific help, please see The department of Human Services. They have a great article and easy to follow guide here, you will also find all the contact details on this site.
The above information is provided as general guidance only, talk to your Childcare Centre or the Department for detailed information specific to your situation.
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