EXCERPTS
Do I have to do something about this?
Possibly. If you've got children in care, you may be eligible for the new subsidy, but it's not an automatic transition.
Families are required to update their details through the Australian Government's MyGov website or education.gov.au/childcare.
As the new subsidy is means-tested, families need to provide an estimate of income and details of hours of work.
Education Minister Simon Birmingham said as of this morning there were 50,000 families who still hadn't updated their details to receive the rebate.
So who's better off under the changes?
There's been a lot of political argument about whether families will be better or worse off.
The Education Department estimates close to 1 million families will be better off while about 280,000 will be worse off.
Low-income and middle-income families where both parents work or with a single working parent will be better off.
This is because of two key changes. The subsidy rate and the annual cap.
Under the changes, the lowest-income families will be paid the most: 85 per cent of their childcare costs.
From there the subsidy gradually tapers down as earnings increase. The lowest subsidy available is 20 per cent for the highest-earning families, before it cuts out at $351,258.
The annual cap or limit on Government support will be abolished for most families.
Under the existing system, families using child care five days a week hit the annual cap only halfway through the year, meaning their child care fees doubled overnight for the remainder of the financial year.
This caused financial strain for hundreds of thousands of families. And as child care costs increased, each year the cap of $7,500 ran out earlier and earlier.
This cap will be removed entirely for families earning less than $186,000 a year and lifted from around $7,600 to $10,000 for families earning between $186,000 and $351,000.