Childcare subsidy to increase
As part of the 2021–22 Federal Budget, the government has announced that the childcare subsidy will be increased up to a maximum of 95% from 1 July 2022.

Under the current arrangements the maximum childcare subsidy payable is 85% of childcare fees.

For families with more than one child in childcare, the level of subsidy received will increase by 30% to a maximum subsidy of 95% of fees paid for their second and subsequent children.

From 1 July 2022, the $10,560 cap on childcare fee rebates will also be abolished.

Currently families with combined incomes above $189,390 are subject to a childcare subsidy cap of $10,560 per child per year.

The government estimates that, under these changes a family earning $110,000 a year will have the subsidy for their second child increase from 72% to 95%. They would also be $95 per week better off for 4 days of care.

A family with 3 children on $80,000 would have the subsidy increase from 82% to 95% for their second and third child and be $108 per week better off for 4 days of care.

Source: The Hon Josh Frydenberg MP (Treasurer), Making childcare more affordable and boosting workforce participation, [media release], Treasury website, 2 May 2021, accessed 3 May 2021.

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