How much NSW families will save under childcare subsidy changes

The state’s childcare subsidy will soon change to make services cheaper for families with more than one kid. Find out how much you will save.

More than 82,000 families in NSW will save an average $2,260 a year on childcare under changes to make services cheaper for families with more than one kid.

The childcare subsidy for a second child aged five or under and any other younger kids will be lifted to 95 per cent under changes announced by the federal government last year, which finally come into effect from Monday.

Changes to the child care subsidy for families with multiple children come into effect from March 7.

The higher subsidy followed the removal of the annual cap of $10,655 for families earning more than $190,015 from 10 December 2021, and combined the two measures will make 250,000 families across Australia on average $2,260 a year better off.

Acting Education and Youth Minister Stuart Robert said the changes would flow through to eligible families automatically and meant more money in parents’ pockets every week.

“For a family who are charged a typical fee and earn $120,000 a year with two children in child care for five days per week, the saving will be $144 per week compared to current settings,” he said.

Source: Australian government

Source: Australian government

Source: Australian government

A family on $40,000 to $120,000 a year with two children in care three days a week would save between $32.40 and $75.59 a week with the new subsidy rate.

Women’s Economic Security Minister Jane Hume said childcare funding had the potential to “remove barriers” and “provide opportunities” to those who needed it “most”.

“It’s all about empowerment, not dependence,” she said.

“Unlike Labor’s universal childcare for millionaires, the Morrison Government is targeting our childcare spend to make sure carers, overwhelmingly women, get the choices and chances they expect and deserve.”

Acting Education and Youth Minister Stuart Robert says the child care subsidy changes will help families who need it most. Picture: Russell Millard

Women’s Economic Security Minister Jane Hume says childcare subsidies will help women who want to return to the workforce do so without financial penalty. Picture: NCA NewsWire / David Geraghty

Labor has defended its universal childcare subsidy policy, arguing it will boost productivity. Picture: NCA NewsWire / Gary Ramage

Under Labor’s universal plan announced in 2020, all families would receive the 90 per cent childcare subsidy, regardless of income.

This would mean they would pay $3195 annually for two kids in childcare three days a week while taxpayers covered the remaining $28,755.

Labor’s early childhood education spokeswoman Amanda Rishworth has defended the universal scheme, accusing the government of “trying to cook up scare campaigns to distract from their incompetence, wastefulness and complacency”.

“Childcare reform is an economic powerhouse that has the potential to unleash huge returns to our GDP, by getting more parents working the hours they want and need,” she said.