Budget 2016: Working parents lose out as subsidy put on ice

WORKING parents face paying more out-of-pocket child care fees after a much-spruiked “fairer’’ subsidy was put on ice, but there could be a silver lining in the form of an election pledge.

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WORKING parents face paying more out-of-pocket child care fees after the Turnbull Government put its much-spruiked “fairer’’ subsidy on ice for a year.

Blaming an obstructionist Senate, the Government’s Budget revealed its $3.2 billion reforms aimed at making childcare more affordable for one million families would be delayed.

With the child care rebate frozen at $7500 for each child since 2008, and daycare fees increasing, which is forcing more working parents to drop out of work, the measure now places greater pressure on Malcolm Turnbull to announce a child care election sweetener.

The Courier-Mail understands the Government will make an election pledge to help working parents, particularly women. Enabling parents to pay for the child care they need — instead of paying for a full day if only four hours is used — has been considered.

Restructuring Family Tax Benefits were to pay for the new subsidy, which was to be a single, means-tested payment. Lower income families would be better off and wealthier parents would have a lower subsidy.

“The Government remains committed to providing parents with more choice and opportunity to work through the Jobs for Families Child Care packaged announced at the 2015-16 Budget,’’ Budget papers said.

Queensland mother Natrice Grosvenor with 6-year-old Harrison and 4-year-old Flynn. Picture Tara Croser.

“This package will create a simpler, more affordable, accessible and flexible child care system and will see the Government invest more than $40 billion in child care support over the next four years.

“The new Child Care Subsidy, Community Child Care Fund and the Additional Child Care subsidy will now commence on July 1, 2018.

“To fund this child care package, the Government is restructuring Family Tax Benefit payments to provide more targeted assistance to families to encourage workforce participation.

“Given the uncertainty regarding the passage of the legislation enabling FTB changes, the new Child Care Subsidy (will start in 2018).”

Budget papers revealed the Government’s nanny trial, which started in January, will be extended by six months to June 2018 and the hourly fee cap will increase from $7 to $10.

Originally published as Budget 2016: Working parents lose out as subsidy put on ice