Baby Hints & Tips

Maternity leave and the Child Care Subsidy Australia

Understanding maternity leave and the Child Care Subsidy (CSS) can seem overwhelming.

We commonly see questions about what parents are entitled to from the Child Care Package when they are on maternity leave. There is a lot of confusion re how the Child Care Subsidy works. 

We’ve done the research so you can access the following resources and advice to help you navigate this time. 

What is the Child Care Subsidy? 

Health Direct details the Child Care Subsidy as follows: “The Child Care Subsidy replaced the Child Care Benefit and Child Care Rebate in 2018. This subsidy is designed to be simpler, to make childcare affordable for more families, and to provide more help to low and middle-income families.

The Child Care Subsidy can only be paid for approved care: 

  • Centre-based day care, including long day care and occasional care
    family day care
  • Outside school hours care, including before, after and vacation care
    in home care
  • The Child Care Subsidy is not paid for registered care, which is care by grandparents or other relatives, or in a standalone preschool or kindergarten. 

Your childcare service can tell you which sort of care they provide. The Child Care Finder website can help you find approved care in your area.

How is the CSS worked out? 

The Child Care Subsidy is worked out according to your family’s income, the hourly rate cap on the type of approved child care you use, your child’s age, and the hours of activity you and your partner do. You can estimate how much Child Care Subsidy you may get on the Services Australia website.

How is the CSS paid to me? 

The Child Care Subsidy is paid directly to your childcare service. The service will then reduce your fees — you just pay the difference between the amount the service charges and the amount paid by the subsidy.

Is parental leave considered an activity eligible for the CSS?

Paid and unpaid parental leave is considered to be an entitlement of your work.  You are entitled to the Child Care Subsidy while on parental/maternity leave.

Per Childcare FAQs: “If you undertake paid work, and paid or unpaid parental leave is a condition of your employment, then this is considered to be part of your paid work. 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.

There is no time limit on the amount of time you can be on unpaid parental leave but there is an expectation that you will be returning to work at some point as a condition of your employment.”

How long can I continue to claim Child Care Subsidy while on parental leave?

You can claim as long as you have a job to return to.  And there is no limit to how long you can be on unpaid parental leave. However, you must be returning to a job at some point as per the conditions of your employment.

How many hours work do I claim for?

You can claim for the number of hours you were working immediately before starting parental leave. 

A good tip to maximise your hours

You can include reasonable travel time to and from your place of activity to your child care centre.

What else is an ‘approved activity’ for the Child Care Subsidy?

  • Paid work (including leave)
  • Study and training
  • Unpaid work in a family business
  • Looking for work “Actively looking for work is a recognised activity. If it’s the only activity you do, you meet the first step of the activity test. (36 hours of subsidised child care per child, per fortnight). 
  • Volunteering
  • Self-employment
  • Starting a new business and working on the start up 
  • Other activities on a case by case basis.

Looking for more information? 

*This article was first published Jun 13, 2018 and updated May 2020 for accuracy and currency of links. 

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