If you get Working for Families payments and you share the care of your child with someone else, we may need to adjust your payments.
The rules for shared care are the same for Best Start and the family tax credit but quite different for the minimum family tax credit and the in-work tax credit.
Principal caregiver - shared care arrangements
You can still be the principal caregiver even if you share the care of your child with someone else.
To qualify as the principal caregiver in shared care arrangements:
- you need a shared care arrangement which is intended to be in place for 4 months or more
- your child must be in your care for at least 122 days during the year (5 days a fortnight) based on hours ─ unlike with child support, which is based on nights.
That means if you care for your child for 122 days or more during the year, or a third of the time in a 4 month period, you could be eligible for Working for Families. But your payments may be reduced to reflect the days you’re not the principal caregiver.
If you care for your child for under 122 days, you will not qualify for any payments for that child.
If your child care arrangements end up different from what’s in your formal arrangement (or court order) we’ll look at what actually happened when we work out your Working for Families entitlement. In cases of disagreement, we may need to ask for evidence.
We need to know about your shared care arrangement
Shared care arrangements may reduce your Working for Families entitlement.
Tell us about your shared care arrangement when you apply for Working for Families.
Apply for Working for Families
We also need to know if your shared care arrangement changes during the year.
Update your shared care arrangements
Tell us about any changes straight away to avoid a possible overpayment which you’ll need to repay to us.
Best Start and shared care
Your Best Start entitlement will be reduced if you share the care of your child with someone else.
If you care for your child for under 5 days a fortnight, you will not qualify for any Best Start payments.
If you care for your child for 5 days a fortnight or more, your Best Start payments will reduce to reflect the days you’re not the principal caregiver. We use a formula to work out the reduction in your payments.
Formula
If you have a shared care arrangement, your reduced Best Start entitlement is
The Best Start formula is exactly the same as the family tax credit formula.
Check out the blue boxes at the bottom of the page for examples of how we apply the shared care rules.
Family tax credit and shared care
Your family tax credit entitlement will be reduced if you share the care of your child with someone else.
If you care for your child for under 5 days a fortnight, you won’t qualify for any family tax credit payments.
If you care for your child for 5 days a fortnight or more, your Family tax credit payments will reduce to reflect the days you’re not the principal caregiver. We use a formula to work out the reduction in your payments.
Formula
If you have a shared care arrangement, your reduced family tax credit entitlement is
The family tax credit formula is exactly the same as the Best Start formula.
Check out the blue boxes at the bottom of the page for examples of how we apply the shared care rules.
Minimum family tax credit and shared care
Your minimum family tax credit entitlement may change if you share the care of your child with someone else.
If you care for your child for:
- under 7 days a fortnight, you will not be entitled to any payments
- 7 days a fortnight, you’ll get half of your full entitlement
- 8 days or more a fortnight, you’ll get your full entitlement.
Check out the blue boxes at the bottom of the page for examples of how we apply the shared care rules.
In-work tax credit and shared care
Your in-work tax credit entitlement depends on whether you qualify as the principal caregiver.
If you care for your child for under 5 days a fortnight, you won’t qualify for any payments.
But if you care for your child for 5 days or more a fortnight, you’ll get your full entitlement.
This means in some cases, both parents will get the full in-work tax credit, with no reduction in entitlement.
Here are some examples of how we apply the shared care rules.
Rosie has 2 children, Millie (8) and Isla (2), who are in her care for 1 week (7 days) every fortnight.
She works 25 hours a week for a salary, and her family income for the year is $35,000 before tax.
The examples below show how Rosie’s shared care arrangement affects each type of her Working for Families payments.
Rosie can get Best Start payments for Isla because her family income is under $79,000 a year.
Her full entitlement for the year is $3,838.
But her payments will be reduced because of the shared care arrangement.
We use the formula to work out Rosie’s payments:
That’s $36 a week. Here’s how we worked it out:
$1,919 divided by 52 = $36
Rosie can get the full family tax credit because her family income is under $42,700 a year.
We work out the entitlement for each child separately. Her full entitlement for the year is $7,524 for Millie and $6,130 for Isla.
But her payments will be reduced because of the shared care arrangement.
We use the formula to work out Rosie’s payments. First, for Millie:
Now for Isla:
So Rosie’s total entitlement for both children is $6,827 ($3,762 plus $3,065).
That’s $131 a week. Here’s how we worked it out:
$6,827 divided by 52 is $131
Rosie can get the minimum family tax credit because she works over 20 hours a week for a salary and her family income (after tax) is under $35,316 a year:
Rosie’s salary before tax: $35,000
Less tax payable: $5,033
Salary after tax: $29,967
A family income of $29,967 (after tax) gives Rosie a full-year entitlement of $5,349.
Here’s how we worked out.
We deduct Rosie’s family income after tax from the income limit of $35,316.
But her payments will be reduced because of the shared care arrangement.
Rosie cares for her children for 7 days a fortnight, so she’ll get half of her full entitlement, or $2,674:
That’s $51 a week. Here’s how we worked it out:
Rosie qualifies for the in-work tax credit because she’s earning income from paid work.
With 2 children and family income under $42,700, she can get $5,070a year.
And because she cares for Millie and Isla for 5 days or more in the fortnight, her shared care arrangement does not affect her entitlement.
That means she gets $97 a week. Here’s how we worked it out:
What did you like about this page?
Please tell us how we could improve this page?
Thanks for sharing your opinion! Your feedback has been received.
Sorry there was an issue submitting your feedback, please try again later.