Reconciliation of Child Care Benefit (CCB) for approved care 007-11020000

This example shows the calculation for 1 week of care.

A similar calculation would occur for each week of child care where a customer had a current CCB fee reduction in force. A total result for the relevant financial year would be calculated.

Note: amounts used are for example only and may not reflect current rates.

Jennie lodged an estimated income in order to receive CCB as a fee reduction for 2013-14. Based on the estimate, Jennie's CCB percentage was 50%.

In the week ending 13 April 2014, child Mike was in care for 50 hours at Little Treasures Child Care Centre. Mike is a non-school child. Little Treasures charges $300 per week for full time care of 50 hours per week.

The standard hourly rate for long day care for 2013-14 is $3.99. The part time % is 100% as Mike was in full time care for the week. The schooling % is 100% for a non-school child.

The fee reduction for that week is worked out using the following calculation:

• Fee reduction = Hours x Standard Hourly Rate x CCB% x Part time% x School%
• 50 hours x $3.99 x 50% x 100% x 100%
• $99.75

Little Treasures Child Care Centre passes onto Jennie the out-of-pocket gap amount of $200.25 for the week, which is full time fee ($300) less the CCB entitlement ($99.75).

After reconciliation it is found Jennie's actual taxable income was higher than estimated. Jennie's CCB% based on the actual taxable income is 40%.

Jennie's recalculated CCB entitlement for that same week is:

• CCB Ent = Hours x Standard Hourly Rate x CCB% x Part time% x School%
• 50 hours x $3.99 x 40% x 100% x 100%
• $79.80

The outcome for this week of the reconciliation is a negative adjustment of $19.95.

22 May 2014: First day a child attends an approved child care service.

12 September 2014: Customer lodges a claim for CCB.

11 August 2014: As the customer has lodged a new claim, the child care service provider can backdate up to 28 days (CCB is always granted from the Monday of the week). The service provider applies reduced fees for the customer from 11 August 2014.

Question: Which weeks are flagged as lump sum weeks?

Answer: From 7 July - 10 August 2014 as a CCB% did not exist and reduced fees were not applied. (The CCB year commences from the first Monday of the financial year.)

Question: Which weeks are flagged for instalment period reconciliation?

Answer: From 11 August 2014 - 5 July 2015 as reduced fees were applied from 11 August 2014 due to the backdating provisions.