Yes, you can receive both. Child Care Subsidy and Family Tax Benefit are separate payments with separate eligibility rules, and neither reduces the other. Most families with young children in approved care who qualify for one will qualify for both.
That is the short answer, and it is where most explanations stop. The more useful question is what the two payments share, because the answer is the thing that generates almost every unpleasant surprise families get from Services Australia.
What they do not share
Worth clearing up first, because these are the assumptions that send people looking:
- Neither payment counts as income for the other. CCS is not included in the income estimate used for FTB, and FTB is not included in the estimate used for CCS.
- Neither is taxable. Both are non-taxable payments from Services Australia and neither goes into your tax return as assessable income.
- They are not means-tested against each other. Receiving one does not reduce the other by a dollar.
- They have separate income tests. They are tested on the same input, but the tests themselves are different, with different thresholds and different shapes. Being cut out of one does not mean you are cut out of the other.
- They pay differently. CCS goes to your approved child care provider and reduces your fees, and you pay the gap. FTB is paid to you, either fortnightly or as a lump sum after the year ends.
What they do share, and this is the important part
Your family income estimate. Both payments are worked out from the same figure — the estimate of your family's adjusted taxable income that you give Services Australia. One number, feeding two payments.
Adjusted taxable income, not salary. This trips up more people than anything else. Adjusted taxable income is broader than your taxable income. For family assistance it adds back things like reportable fringe benefits, reportable employer super contributions, net investment losses and tax-free pensions. So a parent salary sacrificing into super, or packaging a car through work, can have an adjusted taxable income well above their taxable income — and be assessed on the higher figure for both payments.
Balancing after the financial year. Both payments are reconciled against your actual adjusted taxable income once the year is over. Services Australia compares what they paid against what you were entitled to and either pays a top-up or raises a debt.
Put those three together and you get the thing worth taking away from this article: an underestimate of your family income does not create one problem, it creates two. The same wrong figure sits behind both payments, so a family that underestimated by a meaningful margin can be balanced into a CCS debt and an FTB debt in the same letter. Families are routinely blindsided by this because they think of the payments as unrelated.
The protections are not the same either
Both payments hold something back to soften balancing, but they work differently and it is worth knowing which is which.
For CCS, 5% of your subsidy is withheld each fortnight by default. It is not lost. If you underestimated, the withheld amount is used to reduce the debt. If you overestimated, it is paid to you along with any top-up. You can change the withholding percentage twice a financial year through your Centrelink online account, and raising it is a reasonable move if your income is uncertain or trending upward.
For FTB, the mechanics are different — Part A and Part B have their own income tests and their own supplements that are only paid after balancing, and the reconciliation can move in either direction. Rather than restate FTB's thresholds here, where they would sit in prose and quietly go stale, put your figures through the Family Tax Benefit Calculator which applies the current rates directly.
Both payments need your actual income before they can be balanced, and that normally means lodging your tax return — and your partner's, if you have one. Not lodging does not postpone the problem indefinitely. It stops your balancing from happening, which can hold up supplements and top-ups you are owed.
What to actually do
Get the estimate right, once. It is the same figure for both payments, so effort spent here pays twice. Start from what you expect to earn for the full financial year, then add back the items that make it adjusted taxable income. If you are working from a salary, the Salary Tax Calculator will give you the starting figure, and if you salary sacrifice, remember that the packaged amount does not disappear from the family assistance test.
Update it when anything changes. A return to work, a partner's new job, a pay rise, a second child starting care, a change in hours. Every one of those changes your estimate, and Services Australia pays on the figure they hold rather than the figure that is true.
Check whether the change moves your hours too. If a parent returns to work, that is not only an income change. It can also lift the family above the participation threshold and change your subsidised hours from 72 a fortnight to 100 — see the CCS activity test explained. Income and hours move independently, and a return to work can push the percentage down while pushing the hours up.
Model both payments before you commit to a decision. A second parent going back to work three days a week changes take-home pay, CCS percentage, subsidised hours and FTB at the same time, and the four do not move in the same direction. Estimate the child care side with the CCS Calculator and the family assistance side with the Family Tax Benefit Calculator before deciding whether the extra day is worth it.
If you want to see the child care half worked through end to end, how much Child Care Subsidy will I get runs four families through the income test, the hourly rate cap and the hours entitlement with the estimated gap fee for each.
This is general information about how the two payments interact, not a decision about your family. Services Australia assesses eligibility and works out entitlements for both payments.