3.5.1 CCB Entitlement - General Provisions

Summary

The following table shows:

• the type of care for which an individual can receive CCB, and
• where the method of calculating an individual's CCB entitlement (1.1.E.30) can be found in the A New Tax System (Family Assistance) Act 1999.

This section contains one topic that explains the general provisions involved in calculating an individual's CCB entitlement, and covers:

• calculating CCB entitlement for approved care,
• when an approved care applicant:
  • has a taxable income percentage (1.1.T.30) of 100%, or
  • must provide an estimate of their ATI,
• calculating CCB entitlement for registered care, and
• indexation of CCB rates.

Calculating CCB entitlement - approved care

The amount of CCB entitlement for approved care is dependent upon:

• the number of children in care,
• the type of care (1.1.T.70) used,
• the individual's weekly limit of hours,
• the number of hours of care and the amount for which the individual is liable to pay for a week,
• the individual's ATI (1.1.A.20), and
• whether the child is a school child.

The following formula is used to determine an individual's CCB entitlement:

• eligible child care hours (1.1.E.20) x appropriate standard hourly rate (1.1.S.100) x adjustment percentage (1.1.A.40).

Calculating the adjustment percentage is complex and it is advisable to do this first. The calculations involved are detailed in the referenced section.

Act reference: FAAct section 71 Weekly limit on CCB for care provided by an approved child care service, section 72 Weekly limit on rate of fee reductions while individual is conditionally eligible for care provided by an approved child care service, section 73 Rate of fee reductions or CCB-individual conditionally eligible or eligible under section 43, section 74 Rate of CCB-individual eligible under section 44, Schedule 2 CCB rate calculator

Policy reference: FA Guide 3.5.2 Calculating Approved Care CCB Entitlement

Approved care - taxable income percentage of 100%

For the purposes of calculating their CCB entitlement, an individual using an approved service (1.1.A.90) automatically has a taxable income percentage of 100% if:

• they are receiving income support (1.1.I.50), or
• they are in an employment income nil rate period (a person is taken to be receiving (1.1.R.05) their social security pension or benefit during such a period), or
• their estimate of their ATI in the current income year is less than $41,026 per year.

Act reference: FAAct Schedule 2 clause 7 Method of calculating taxable income %

Policy reference: SS Guide 3.1.12 Employment Income Nil Rate Period

Approved care - estimate of income

An individual must provide an estimate of their income for the full income year to the FAO before their entitlement is assessed if they:

• are not receiving income support, or
• want to claim more than a zero rate of CCB for approved care in the form of fee reductions, or
• want to claim zero rate of CCB throughout the year and any CCB entitlement after the end of the income year.

The individual is responsible for the accuracy of the estimate and can vary the estimate at any time. If the individual's income estimate increases during the income year, the individual may choose to receive an adjusted rate (1.1.A.45) of CCB, which will reduce or recover any potential overpayment.

An individual need not provide an income estimate if they want to claim:

• (from 7 July 2008) a zero rate of CCB only, and be able to receive CCR fortnightly payments directly to a nominated bank account or to one or more approved child care service(s) or quarterly payments directly to a nominated bank account,
• CCB entitlement as a lump sum payment after the end of the income year.

Calculating CCB entitlement - registered care

An individual using registered care is eligible for the registered care rate of CCB, regardless of their income. CCB entitlement for registered care is dependent on the number of hours of care used. The following formula is used to determine an individual's CCB entitlement for a week:

• eligible child care hours (maximum of 50) x registered care standard hourly rate (1.1.S.100) x schooling percentage (1.1.S.20).

Act reference: FAAct section 83 Rate of child care benefit for care provided by registered carer, section 84 Weekly limit on child care benefit for care provided by a registered carer

Indexation of CCB rates

All CCB rates are indexed in July each year using the CPI and for CCB purposes takes effect on the first Monday of the income year. A week for the purposes of CCB and CCR commences on a Monday.

Act reference: FAAct Schedule 4 clause 3 CPI Indexation Table, section 3(6) A week, for the purposes of CCB...

Policy reference: FA Guide 4.8.1.20 CCB Entitlement Variations - Individuals Using an Approved Service, 4.6.4.10 Adjusted Rate of CCB, 4.6.4.20 No CCB as Reduced Fees - Any CCB Entitlement at End of Year

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Last reviewed: 2 July 2012