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Jason Bryce - Business & Finance Specialist

What does the new childcare package mean for single parents?

Answers to the big questions every single mum is asking

By Jason Bryce | 05 July 2018

The new Child Care Subsidy package and what it means for single parents - stock photo source:

...affected single mums might have been wondering

if high child care costs made working worthwhile at all...

By now you know that the Child Care Benefit and Child Care Rebate have been scrapped and replaced with one single Child Care Subsidy. This is the centrepiece of the Turnbull government's new childcare package which came into effect on the 2 July.

The annual caps have been abolished for most families and the level of assistance has been increased. The changes are costing the government an extra $2.5 billion over the next four years.

But what does the new child care package and new Childcare subsidy mean for single parents?

go to the Single Mum Facebook Support Group - stock photo source:

The new package is mostly good news. The minister responsible for the child care system is the minister for education, Simon Birmingham. He says the new childcare subsidy system is simpler than the old system of child care rebate and childcare benefit.

"The child care system can be difficult to navigate, which is why we're undertaking the simplification."

Samantha Page, the chief executive of Early Childhood Australia said the new subsidy is a better deal for low and middle income families

"Most families will be better off under this new childcare package."

Samantha said the higher subsidy level for most families (85 per cent) and the removal of the annual cap (It was $7,500 per year per child) for families with incomes under $186,958 is good news. Previously many working families ran into the cap in the second half of the financial year and had to pay the full cost of the care themselves until the new financial year kicked in. That was a big burden for a lot of families and really affected single mums who might have been wondering if high child care costs made working worthwhile at all.

Simon Birmingham says the new system is designed to ensure that childcare costs don't prevent parents from working.

Child Care Subsidy for single parents - stock photo source:

There is also extra assistance

a subsidy level of 100 per cent if the fee is within 120 per cent of the hourly cap – for grandparent carers or if you can show that you are experiencing temporary financial hardship, or your children are at risk of 'serious abuse or neglect.'

The bad news is that if you are not working or in education you may not be eligible for very much subsidised child care at all

- just the base level of entitlement for all children, which is 12 hours of care per week. Beyond that, you need to meet the "Activity Test."

'Activity' includes paid work, being on annual leave or parental leave, unpaid work in a family business, education, volunteering and looking for work.

Eight to 16 hours of 'activity' per week gives you an entitlement to 36 hours of subsidised child care per week. Sixteen to 48 hours of 'activity' gives you 72 hours of care.

You might be exempt from the activity test if your child has a disability or you are on carer's benefit.

The Child Care Subsidy is paid directly to child care services, not to you the parent. You pay the difference between the subsidy and the child care fees that the provider charges.

Child Care Subsidy for single parents - stock photo source:

How much Child Care Subsidy am I eligible for?

If your household income is under $66,958, your child care subsidy is 85 per cent of the cost of the care. So if your child care centre charges $100 per day, you will be charged $15.

The subsidy reduces from 85 per cent to 50 per cent for household incomes above $66,958 and below $171,958.

For families using a child care centre, the maximum hourly rate cap is $11.77. If that is the fee your child care centre charges, the government will pay 85 per cent of that, or $10.00 per hour. You pay the rest - $1.77 per hour.

If the child care centre charges more than $11.77, the government will still just pay $10 per hour, leaving you to pay the rest.

Family Day Care Child Care Subsidy rates

For Family Day Care the maximum hourly rate cap is $10.90 and for Out of School Hours care the maximum hourly rate cap is $10.29.

In-home Nanny Child Care Subsidy rates

There is a higher hourly cap for families with in home care – like a nanny – of about $25 per hour. But not very many single mums have a nanny.

Samantha Page says that people with stable jobs will reap the most benefits from the new system.

But if you work some weeks and not every week you may find yourself not meeting the activity test sometimes and paying a lot more for child care beyond the 12 hour base level. And child care providers don't really generally like parents who sometimes bring the kids into care and sometimes not.

Jason Bryce

Business & Finance Journalist

Have your say on this story - what do you think? Make a comment below!

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go to Jason Bryce's Biography

Jason is a business and finance journalist with 20 years experience, and is also a member of the Expert Opinion Panel. He has a regular weekly column in the Sunday Mail (Brisbane) and writes regularly for the Business Daily section of the Herald Sun in Melbourne and many other newspapers and magazines.

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Disclaimer: The views of authors on our website are not necessarily representative of those views of our website. Articles contain only general information, correct at the date of publication. For advice regarding your own personal circumstances, always seek individual advice from a qualified professional. This article may not be reprinted, reproduced, or retransmitted in whole or in part without the express written consent of Please read the complete Disclaimer here

What does it mean to be a single mum?Of course, the


are the most important thing in a single mum's life. Kids are the focus and always have been. But along with the children, there are other matters that can confuse a single mum's life.


plays a big part of a single mother's life, mainly because this is where a large percentage of single mums get their finances from. Centrelink are the source from where the

single mother pension

, or as it is otherwise known, the single parent payment comes from. The single mother pension is a subsistence amount, but just the same, it is money to live on, and so it is important, no matter if it is called single parent payment, single mother pension or whatever Centrelink welfare classes it at the time

Often, single mums come out of a


or defacto relationship only to find that their troubles have just begun, and find that their first step leads them towards Family Law - it's time to engage a lawyer.
There are more than just Centrelink finance problems to worry about, as mentioned before, but also

child custody

issues. Child custody is something that hits right at the heart of

single mums

. If a single mother's ex husband or ex partner has been a domestic violence perpetrator, the mum may be greatly worried about child custody. They worry that their kids won't be safe with their spouse, who has already proven to be abusive because they caused

domestic violence

, which resulted in a divorce or separation.

Even so,

Family Court

will often still order a form of child custody named

Shared Parenting

. Shared Parenting is a form of child custody division of time or parental responsibility between the parents. Mother's often look for a good divorce lawyer to try to avoid share parenting with an abusive ex-spouse after divorce, however in many cases Shared Parenting is still the outcome after the divorce, no matter how good the divorce lawyers have been. They will often settle for visitation at a contact centre or access centre where fathers or mothers are supervised during child custody access.

Please remember the bigger font words,because we will use it often in our website.