Salary Sacrificing Payments to Child Care Centres

Advice Received from the Department of Family and Community Services

All staff should be aware that salary sacrificing payments to child care centres may affect their Childcare Benefit (CCB) in accordance with the Family Assistance Act 1999. 

Salary sacrificing and Childcare Benefit eligibility

Where a staff member salary sacrifices all or part of their child care costs, the salary sacrificed portion of the childcare costs will not be eligible for Childcare Benefit.

Explanation:  It is considered that the contract for the provision of the childcare is between the staff member’s employer and the childcare service.  The staff member is therefore not liable for the cost of care, and cannot claim for Childcare Benefit.

If salary sacrificing does not cover the full childcare costs, Childcare Benefit may be payable against the parent's actual liability (that part of the fees not paid for through salary sacrificing).

FAActs 1.7.2001, as at 19.11.2001; sec 2.6.1 CCB Eligibility Criteria for Individuals 

Staff members are reminded that they should seek independent financial advice BEFORE entering into any salary sacrificing arrangement.

If you require further information, please contact your accountant, financial planner, OR the Department of Family and Community Services, Family Assistance Office on 6274 5248.