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2023 Budget and Family Day Care

The annual federal budget was delivered yesterday evening, 9th May 2023. While there is limited reference to Family Day Care specifically, there are some changes to Child Care in general, as well as small business depreciation rules which are outlined below:

  1. Instant Asset Write-off reduces to a limit of $20,000 from 1 July 2023

Up until to 30 June 2023 you are entitled to a tax deduction for the full cost of any business asset regardless of it's cost (with the exception of Motor Vehicles which are capped at please note that motor vehicles do have a depreciation limit of $64,741 for the 2022/2023 tax year).

From 1 July 2023 a limit of $20,000 will apply to assets purchased for you business, with the balance of the cost being claimable in subsequent tax years.

TIP: In order to claim the full cost of an asset this tax year, you must have the item of plant or equipment in your possession, installed and ready and available for use BEFORE 30 June 2023.

IMPORTANT: Before making any significant purchase you should always speak to your tax advisor to ensure the asset you are purchasing is eligible for this concession, the amount you may be entitled claim as a deduction, and to ensure you maximise the tax benefit of any such purchase.

2. Changes to Child Care Subsidy and Income thresholds

The following is a summary of key changes provided by the Department of Education:

  • lift the maximum CCS rate to 90% for families earning $80,000 or less

  • increase CCS rates for around 96% of families with a child in care earning under $530,000

  • increase transparency in the sector by requiring large providers to report revenue and profits, and commercial leasing information

  • crack down on fraud and non-compliance

  • invest $33.7 million to increase subsidised ECEC to a minimum of 36 hours per fortnight for families with First Nations children.

3.Single parent payment to be extended until youngest child is 14

From 20 September 2023 single parents will no longer have to transfer to JobSeeker when their youngest child turns eight. This age has now increased to fourteen years old.

FDC Tax specialises in Family Day Care. Should you have any questions relating to this article, or are looking to take advantage of the services we provide, please feel free to contact us.


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