Radical overhaul of childcare system gives families up to $21,000 a child every year
CHILDCARE benefits will now reward the parents who work hardest. The more you work, the more you get, with some families receiving $21,000 per child per year.
Fed Budget
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FAMILIES will receive up to $21,000 a year per child toward the cost of day care, under a radical overhaul of the childcare system designed to benefit those who are working hardest.
The federal budget confirmed an additional $3.5 billion would be provided to tackle the soaring costs of childcare by rolling multiple subsidies into one means-tested payment and imposing an activity test on rebates.
The change would mean the more parents work, the more childcare benefits they can access.
But expecting mums who can access paid parental leave through their employer will lose access to government maternity leave benefits in a crackdown on so-called ‘double dipping’ from July 1 next year.
Families who travel overseas for prolonged periods could also have their Family Tax Benefit A payments reduced, with the government saving $42 million over five years by only paying FTB Part A to families for six weeks in any 12 month period they are overseas.
The families package, a centrepiece of the 2015 budget, is aimed at encouraging 240,000 families to spend more time at work and will come into effect on 1 January 2017.
Treasurer Joe Hockey said the it was designed to help working parents “juggle the demands of modern life.”
“By investing this money we are responding to the demands of 165,000 parents who want to work more, but are prevented from doing so by the current costly and complex scheme.”
The former childcare benefit and childcare rebate will be rolled into a single means-tested and activity-tested subsidy, which will cover 85 per cent of the cost of care for families earning around $65,000 or less.
This means a couple with a family income of $60,000 or less, and with two young children in long day care for 50 hours a week, could receive up to $42,000 toward their yearly childcare bill.
The childcare subsidy will taper down to 50 per cent for families earning $170,000 and the previous $7,500 cap on the childcare rebate has been scrapped all together for families earning less than $185,000, with payments to families earning more than that now capped at $10,000.
A new hourly fee cap, of $11.55 for long day care services, will be implemented so taxpayers no longer subsidise premium childcare centres charging parents more than $160 a day.
The activity test will mean unless families earn less than $65,000 both parents must be working, studying or volunteering to access childcare subsidies, making middle income stay-at-home mums the big losers.
The government will spend another $869 million on a child care safety net to ensure children from disadvantaged backgrounds, including families on welfare and children at risk of neglect, can still be exposed to childcare.
A $250 million pilot program will extend childcare subsidies to shift workers who want to use nannies, and $843 million will be spent continuing universal access to preschool program which ensures all four year olds can access 15 hours of preschool a week.
The federal government is still banking on being paying for the significant investment in childcare through cuts to Family Tax Benefits flagged in last year’s budget, but has flagged it would be open to negotiating other possible savings with Labor and the crossbench.
Originally published as Radical overhaul of childcare system gives families up to $21,000 a child every year
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