Child Care Tax Rebate

By Jason Fittler

If you have young children who are in child care then like myself you will have received a lot of paper work from centre link recently about what you will receive as far as the child care tax rebate.

Many higher income earners are under the impression that if they no longer qualify for the Child Care benefit then they will not be entitled to the Child Care Tax Rebate. This is not the case see facts below.

1. The child care tax rebate is as of the 01/07/2008, 50% of your child day care fees up to a limit of $7500 per child.
2. You are entitled to this tax rebate if you qualify for the child care benefits scheme.
3. You qualify for the child care benefits scheme if;
  • your child is immunized
  • you meet residency requirements 
  • your child goes to an approved child care centre
  • you meet the income test
The income test is the problem for high income earners, if you earn over $126,793 per house hold and have one child you don’t qualify for any payment under the child care benefits scheme.

On learning this most people would assume that you therefore do not qualify for the child care tax rebate.

Wrong.

If you meet the first three criteria but your income is too high then you are able to apply as if you do qualify for the child care benefit scheme but the payment you receive under the scheme is nil.

Now that you qualify for the child care benefits scheme with a nil payment you are entitled to claim the child care tax benefit which is 50% of your child’s day care fees up to a limit of $7500 per child.

Looks like Jane will have to keep working for now.