Salary packaging of Child Care

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Under the Defence Flexible Remuneration Packaging Scheme, Defence members are able to package their child care fees at employer sponsored child care centres. This includes all Defence Child Care Centres and other eligible Commonwealth Employer Sponsored Child Care Centres.

Salary packaging can be arranged between Defence and the Member, where you agree to forego part of your future entitlement to salary or wages, in return for a benefit in the form of child care to the same monetary value of the salary you would receive.

The combined total of salary or wages and the benefit must not exceed the total of your normal salary. When you ask Defence to pay for your child care as part of your salary package, you are choosing to forego all entitlement to Child Care Benefit (CCB) and the Child Care Tax Rebate. To be eligible for CCB, you or your partner must be liable to pay for the child care. If you salary package the cost of child care fees, this means that Defence as the employer is liable for the cost of all child care fees that are paid under salary packaging arrangements, so Defence (not you) has the legal liability to pay the fees.

You must choose between either salary packaging OR receiving CCB and the Child Care Tax Rebate. Salary packaging is not beneficial for many families and it is very important that you understand the relative benefits of salary packaging against claiming CCB and the Child Care Tax Rebate.

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