Child care subsidies available to grandparents

Published on Wednesday, 11 March 2020
Last updated on Monday, 26 October 2020

Article hero image

For many families, grandparent care is a convenient, cost-effective, and an emotionally enriching child care option that allows parents to work and provides opportunities for young children and older relatives to bond.

Grandparent care can have its challenges, and when an older person is responsible for a sizeable proportion of their grandchild’s care, they may find themselves committing a lot of time, energy and money to ensure the child is well looked after. 

Fortunately, the government recognises this investment with several child care payments that can ease the financial burden when grandparents are looking after grandchildren on an ongoing basis. 

The government also employs Grandparent Advisers, who are on call to provide individualised information and advice. You can phone the Grandparent Advisers Line on 1800 245 965, and if you’re a grandparent carer, here are some child care payments that you may be eligible for. 

The Child Care Subsidy

Although we often think of this subsidy as helping parents pay for their child’s care, this payment can apply to non-parent carers too, including grandparents. 

If you care for a child at least two nights a fortnight (or 14 per cent of the time) and pay for their fees at an approved child care service, then the government might help you with these fees, provided you meet all the subsidy requirements (including residency and child immunisation rules). 

Approved child care services include centre-based care, family day care, outside school hours care or in-home care, and if you’re eligible, the subsidy amount is calculated according to your family’s income, the type of child care your grandchild uses, their age, and you and your partner’s activity level. 

You claim the Child Care Subsidy through myGov and it’s paid directly to the child care service to reduce fees. 

The Additional Child Care Subsidy Grandparent

The Additional Child Care Subsidy Grandparent helps some grandparents and great-grandparents pay for approved child care for their grandchild or great-grandchild. 

To receive the Grandparent Subsidy, you or your partner must: 

  • Be eligible for the Child Care Subsidy
  • Get an income support payment (e.g. the age pension)
  • Be the grandparent of the child
  • Have 65 per cent or more care of the child
  • Make day-to-day decisions about the child’s care, welfare and development

To receive this subsidy you have to meet all of the eligibility criteria, so if you provide the majority of care for your grandchild, but don’t receive income support, then you won’t be eligible for this payment (but may still be entitled to the Child Care Subsidy). 

If you are eligible, the Grandparent Subsidy lets you access 100 hours of subsidised care per fortnight for your grandchild or great-grandchild, and like the Child Care Subsidy, you claim this benefit via myGov

There are also certain situations where grandparents might be entitled to other Additional Child Care Subsidy payments, such as the Child Wellbeing payment, which helps with the cost of child care to support a child’s wellbeing.  

The Family Tax Benefit 

Grandparents may also get help with the cost of raising and caring for a grandchild via the Family Tax Benefit. 

This two-part payment consists of Family Tax Benefit Part A and Family Tax Benefit Part B (which may be paid to a grandparent carer, non-parent carer, single parent or member of a couple with one main income). 

There are different eligibility criteria for the Part A and Part B payments, but as a general guide, you must be caring for a dependent child at least 35 per cent of the time, meet the relevant income test and fulfil residency requirements. There are also child immunisation and Healthy Start for School requirements for Part A. 

You can read about payment rates here, but because every family has different income and circumstances, it’s a good idea to call the Grandparent Advisers Line, describe your situation and get their advice on what you can claim

How does the government define ‘grandparent’? 

The good news is that the government defines ‘grandparent’ in broad terms for the above payments, so you can be the biological or non-biological grandparent of the child. Grandparents through adoption, artificial conception, surrogacy and step-grandparent relationships are all recognised. 

What payments are available to other non-parent carers?

As well as supporting grandparent carers, the government also supports other non-parent carers, like legal guardians and family members who care for a child. 

You can read more about the assistance on offer here, and Centrelink’s Payment and Service Finder is a useful way for all Australians to check their eligibility for payments and estimate amounts. 

How has the new child care subsidy system affected grandparents?

Although there are payments available to grandparent carers, it’s worrying to see that the number of grandparents claiming child care benefits has dropped sharply since the overhaul of the child care subsidy system in July 2018. 

In number terms, The Guardian reports that there has been a 24 per cent (or thereabouts) drop in the number of grandparents receiving financial assistance, with 3,300 grandparents receiving the new Grandparent Subsidy in March 2019, compared with 4,340 getting the previous Grandparent Child Care Benefit in March 2018. 

There has also been a 37 per cent decline in the number of children the grandparent benefit is claimed for, from 7,570 in March 2018 to 4,760 in March 2019. 

The Department of Education says the figures aren’t comparable, because they relate to different payments and policy settings, but others are concerned that a ‘tightening of eligibility requirements’ has caused the drop in grandparent payments and led to vulnerable children exiting formal care arrangements or ending up in foster care. 

Labor’s early childhood education spokesperson, Amanda Rishworth says, ‘The [child care subsidy] system is overly complex and I think that may have caught out a huge number of grandparents, but I think it is also a change in definition about how much care you are required to take which would have made a whole lot of grandparents ineligible.’

Specifically, the new Grandparent Subsidy requires grandparents to provide at least 65 per cent of child care, whereas the old Grandparent Child Care Benefit required them to be the ‘sole or major provider of ongoing daily care’ (which allowed for 85 hours in the 168 hour week, or 50.6 per cent of the care). 

The government has responded by saying that other subsidies may be available to grandparents who don’t qualify for the Grandparent Subsidy (such as the Child Care Subsidy), and we hope that positive changes appear in this year’s figures.

How should your family approach grandparent care?

If you’re a grandparent carer (or your parents/in-laws look after your child on a regular basis), it’s definitely worth investigating the subsidies that may be available to your family. And even if you have an informal grandparent care arrangement that doesn’t attract government payments, it’s still important to think about finances and other practical matters. 

While some grandparents are happy to provide free child care or fund their grandchild’s daily activities, others will need to be paid for their services or given spending money. 

As well as being fairly remunerated, grandparents also need to be physically and emotionally up to the challenge of child care, so it’s recommended that you get the family together and speak openly about all your expectations and concerns from the outset. 

Good communication between parents and grandparents is essential to ensure everyone is comfortable with the proposed or current child care arrangements, and this article will help you successfully navigate the world of grandparent care. 

Related Articles

Article image

Successfully using grandparents for child care

Tips and tricks for using grandparents in your child care arrangements, including payment, checking in, rules and guidelines and more.

Article image

Additional Child Care Subsidy (ACCS) - Grandparents

The Additional Child Care Subsidy (Grandparents) supports grandparents with child care responsibilities.