How Aussies can save $1000 a month on childcare

Clever hacks around how many hours youngsters attend childcare could save families more than $1000 a month, according to one insider.

A childcare insider has revealed hacks to help parents save more than $1000 a month on childcare, as families feel the pressure of providers ramping up fees.

Benjamin Balk, founder of the childcare centre comparison app Kindicare, said by understanding the subsidy algorithm parents can save up to $1114 a month.

“The best hack to beat the system and maximise your subsidy is to get your hours of care under 100 hours a fortnight,” Mr Balk said.

“Most people don’t realise that there is both an hourly cap rate on the fee per hour that can be subsidised which is $13.73, for children under school age, or that there is a maximum number of 100 hours subsidised care per fortnight under the child care subsidy rules if one or both parents are working more than 48 hours a fortnight.”

The move could save Australian families hundreds of dollars a week

Mr Balk said if families don’t need care for 12 hours a day, they should find a provider who has flexible sessions such as 10 hours, so if their children are enrolled full time they are only consuming 50 hours a week (100 hours a fortnight) of care keeping them under the 100 hour per fortnight limit.

Another hack is to cram all your working hours into four days, so even if the child is enrolled in 12 hour full day long day care, they’re only using 48 hours of care per week (96 hours per fortnight) which again means every hour of care used is eligible for the child care subsidy.

“In the scenarios provided, this would save a family between $1,024 and $1,114 a month,” Mr Balk said.

Another hack for older children is to take advantage of state funded preschool and kindergarten programs for children age three and up.

He said most states and territories provide a number of hours per year in free preschool.

“These services are funded from state subsidies, not the federal childcare subsidy, which means parents could for example enrol their children in three days of long day care and two days of free preschool,” Mr Balk said.

He said this option could save a family with a three year old $708 per month.

Goodstart Early Learning Aspley centre director Michelle Buchanan said if families are concerned about costs, staff are on hand to help.

“It is a complex system,” Ms Buchanan said.

One expert recommended families get their hours of care under 100 hours a fortnight.

“Taking the time to talk through the family’s needs and subsidy eligibility and explain Goodstart’s flexible sessions, multi-day discounts and public holidays not being charged for is really important for us so that we can maximise their care options.”

Meanwhile, Jay Weatherill, from early education campaign group Thrive by Five, has called for the activity test – used to calculate how many subsidised hours families can claim – to be scrapped because it disadvantages single parents and couples where just one works.

He said the test introduced as a measure to incentivise workforce participation is “doing quite the opposite”.

Mr Balk agreed the activity test is bad news for those struggling the most/.

He said families earning more than $80,000 where just one person works, get zero subsidised hours, and if the income is below $80,000 they get just two days a fortnight.

He said the activity test also makes it difficult for single parents to re-enter the workforce or study.

Originally published as How Aussies can save $1000 a month on childcare