Childcare costs cut to help Aussie families save money, get mums back to work

Australian families with childcare will be hundreds of dollars better off under a federal government plan to kickstart the post Covid economy and help more women back in the workforce.

Cuts to the cost of childcare scheduled to kick in next July will be brought forward to March, saving about 250,000 families across Australia an average of $761 this financial year.

The move, designed to help get more women back in the workforce as the economy recovers from Covid-19, will mean half of the nation’s families with one child in care will see 95 per cent of their out-of-pocket expenses for any additional kids paid for by the government.

The changes, which will save about 250,000 families $2200 a year, were meant to kick in on July 11, next year but they will instead start getting the extra subsidy 18 weeks earlier on March 11.

The earlier date means a family earning $110,000 a year with two kids in care, four days a week, will save about $1800 in this financial year as their out-of-pocket expenses will drop by about $100 a week when the changes come in.

The government is also bringing forward by year its plan to dump the cap of $10,655 on childcare subsidies after which parents earning more than $189,390 have to pay 100 per cent of childcare fees. This will come into effect from December 7.

Mum Anissa and dad Alper Yuceozsoy, with their children Aylin, four, and Aleyna, 18 months, say the childcare cost cuts will help their family. Picture: Sam Ruttyn

Anyone who has already reached that cap before then will have their out-of-pocket expenses refunded by the government.

The government hopes the changes, which are designed to end disincentives for parents — especially mothers — to work extra days will encourage women back into the workforces at the economy recovers next year.

Education and Youth Minister Alan Tudge said the changes were good for families and it was significant the government had been able to deliver them sooner.

“This will help our economy roar back to life post-lockdowns,” Mr Tudge said,

The cost of the reforms has been budgeted at $1.7 billion.

Education and Youth Minister Alan Tudge said families will benefit from the cuts. Picture: NCA NewsWire/Gary Ramage

“Most people won’t hit the cap until next February or March but this will give them certainty getting the child care they need without worrying about out of pocket expenses,” Mr Tudge said.

Women’s Economic Security Minister, Senator Jane Hume, said this would support mothers looking to get back into the workforce or take on more hours.

“Treasury estimates the additional subsidy will mean the equivalent of 40,000 parents are able to work an extra day per week, boosting the economy by up to $1.5 billion per year,” she said.

“The Morrison government is committed to increasing economic opportunities for Australian women and this additional child care support will remove disincentives for primary carers, particularly mothers, to participate in the workforce.”

The changes have been welcomed by business leaders, with Business Council of Australia boss Jennifer Westacott saying they would go a long way towards fixing some of the financial cliffs and disincentives that stop women working to their full potential and hold back our economic growth.

Castle Cove mother of two Anissa Yuceozsoy welcomed the news for young daughters Aylin who goes to daycare, and Aleyna, who will start next year.

“This additional support is great news for Aussie families as daycare fees can become quite a burden, particularly when you have more than one child in your household attending,” she said.

“Young families really need the support to make it viable.

“It’s been a challenging two years for all, and even more so for working families so this is certainly wonderful news.”