Over 6,300 families in Fairfax will be better off from the Federal Government’s child care overhaul.
Ted O’Brien MP said the new child care package will provide the greatest hours of support to the families who work the longest hours, and the greatest subsidy and financial support to the families who earn the least.
“We know the cost pressures that families face so we’ve taken action to overhaul a broken system,” said Mr O’Brien.
“Families using child care in Fairfax should be reassured that relief is around the corner.”
Minister for Education and Training Simon Birmingham said the child care changes are focused on helping the families that need it most, Minister Birmingham said.
“Almost one million families will benefit from our additional $2.5 billion investment and comprehensive changes to the subsidy system, our new hourly rate cap to put downward pressure on fee increases and the end of the $7,613 annual rebate cap,” Minister Birmingham said.
“With 1.15 million Australian families set to access child care next year it’s important families have the opportunity to plan for the changes.
“I urge families to visit our child care estimator, plug in their details and see exactly how they’re set to benefit.”
The Federal Government’s child care package includes:
- Increasing Australia’s investment in early childhood education and care by $2.5 billion so that almost one million Australian families benefit
- Introducing a better targeted activity test to ensure taxpayer subsidised child care places are targeted to those who depend on it in order to work, or work more hours.
- Delivering the highest rate of subsidy to those on the lowest income levels and more hours of subsidy to those who work the most. We’re increasing the base subsidy from around 72 per cent to 85 per cent for the more than 370,000 families earning around $65,000 or less a year.
- Low and middle income families, earning up to around $185,000, will no longer be limited by an annual $7,613 cap on the amount of subsidised child care they can access – that’s more than 85 per cent of families using child care and means families won’t run out of subsidy mid-year as happens now. Families earning more than around $185,000 will also benefit from an increased cap of $10,000.
- A $1.2 billion Child Care Safety Net will support vulnerable children and families who need extra support
More information on the Federal Government’s new child care reforms can be found at: www.education.gov.au/childcare
Nearly one million families will benefit as a result of the Federal Government’s child care reforms
Families are the backbone of our society and we understand that, every day, parents are making choices in the best interest of their family.
Through our new child care package, we have a plan to give parents more choice and opportunity to work, as well as provide children with a high quality early education.
For some, access to child care can mean the difference between working and not working. More affordable access to child care puts the opportunity of work within reach for more families.
The Federal Government believes in giving people the opportunity to get ahead. This child care package is focussed on helping the families that need it most.
We are injecting an additional $2.5 billion in funding support for genuine child care reform that will benefit almost one million families.
We’ll provide the greatest subsidy and financial support to the families who earn the least.
The Package will deliver the highest rate of subsidy to those families who most need it.
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- We’re increasing the subsidy from around 72% to 85% for the more than 370,000 families earning less than around $65,000 a year.
- The subsidy tapers down to 20 per cent for higher income families, and stops for families earning around $350,000 or more.
- A family on $60,000 a year [whose child care centre charges $100 per day] will pay around $15 a day per child for care.
We will remove the annual rebate cap for most families, which will free them up to work as many days as they choose without a looming limit on their child care subsidies.
Families on incomes of less than around $185,000 a year will not have an annual limit on the amount of child care subsidies they receive – that’s 85 per cent of families with children in child care.
Rather than having to limit the number of days per week in child care to fit within the constraints of the current annual rebate cap, these families can work as many days as they like without a financial disincentive part way through the year.
This will ensure parents aren’t limited by an annual cap on the amount of child care they can access and free them up to boost their income without facing sky-rocketing child care costs.
Families on incomes between $185,000 and $350,000 will benefit from an increased cap of $10,000 each year under the new package.
The package targets support to families who most depend upon child care in order to work, or work more.
We want families to choose their child care around their work, rather than limit their work hours to suit their child care.
It is estimated that the package will encourage more than 230,000 families to increase their workforce participation.
Family eligibility for the Child Care Subsidy will be determined by a three-step activity test that more closely aligns hours of subsidised care with the combined amount of work, training, study and volunteering.
An hourly rate cap will provide Australians a reference point from which to hold providers accountable and from which they can expect prices shouldn’t dramatically exceed.
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- While the Federal Government has taken action to slow child care fee growth, Australian families are still feeling the pinch following 10 years of fee growth averaging 6.7% per year and fee spikes as high as 14% per year.
- New hourly fee caps are clearly a necessary measure to arrest incessant child care fee increases.
- The current Child Care Rebate payment covers 50% of out of pocket costs, regardless of how high the fees are set.
- As the Productivity Commission found in its Report of their Inquiry into Childcare and Early Childhood Learning “…the average annual increase in long day care fees accelerated …” (page 391) after the rate of the Child Care Rebate increased from 30% to 50% in July 2008 under the previous government.
The Government’s new child care package strikes the right balance between targeted child care support for hard working families who depend upon it, a generous safety net to protect those most vulnerable in our community and ongoing support for high quality early learning, which is further boosted through our $428 million extension in Federal support for 15 hours of preschool a week for children in the year before school during 2018.
This package will result in tangible, real differences for families. For example:
• A family on $50,000 – both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be more than $3000 better off a year
• A family on $80,000 – both parent/s working full time, with two children aged under 6 in long day care five days a week at $100 a day will be more than $8000 better off a year
• A family on $94,000 – both parent/s working, with two children aged under 6 in long day care two days a week at $100 a day will be more than $1,500 better off a year
• A family on $150,000 – both parent/s working, with two children aged 6 and under in long day care three days a week at $100 a day will be more than $1000 better off a year.
Use the online estimator to find out how the new package impacts you: https://www.education.gov.au/sites/education/files/sch/est/index.html