Federal Budget 2020: Paid parental leave relief but childcare fees to rise

Thousands of new mums will face changes to the paid parental leave scheme at the same time as childcare centres are expected to hike their fees. SEE YOUR PARENTAL LEAVE PAYMENT

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Thousands of new mums will be paid parental leave despite losing their jobs during the pandemic, as childcare centres get set to jack up fees.

The federal government has changed the work test period for Paid Parental Leave (PPL), to help 9000 mothers who would otherwise miss out.

PPL pays new mothers up to 18 weeks of parental leave, at $753.90 a week before tax.

They must earn less than $150,000 a year, and have worked for at least 10 of the 13 months prior to the birth.

Women’s Minister Marise Payne said the work test period would be temporarily extended from 13 months to 20 months.

“(This will) ensure that parents whose employment has been impacted by COVID-19 are supported and that women can remain connected to the workforce,’’ she said.

Women’s Minister Marise Payne is providing relief to new mums who have lost their jobs. Picture: AAP Image/Lukas Coch

The Budget did not contain new initiatives for childcare, but taxpayer spending on subsidies are set to soar to $9 billion this year because more parents will pocket higher rebates as their income is cut during the pandemic.

The Federal Government will also ease the work activity test for all Australian families to 4 April 2021, so they can continue to receive the same level of subsidised childcare as before the pandemic, even if they’ve lost work.

Victorian childcare centres will gain an extra $314 million in Federal Government payments to help them stay afloat until the end of January, as lockdown restrictions ease.

Childcare centres are expected to raise their fees while taxpayers will cough up more to cover rebates being claimed by families.

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The Budget papers predict childcare centres will increase their fees this year, driving taxpayer subsidies higher.

Treasury forecasts that taxpayer funding of childcare is set to grow 13 per cent in real terms this year.

“The increase primarily reflects expected continued growth in the use of child care by families and also reflects expected increases in fees charged by childcare providers,’’ the Budget papers state.

Ms Payne said prior to the COVID-19 pandemic, “women’s workforce participation had reached a record high, and the gender pay gap was at a record low.”

The cost of childcare to taxpayers is expected to skyrocket as more families turn to government assistance in the wake of the COVID-19 pandemic.

“As we navigate our way out of a health and economic crisis, it is critical that women play a central role in our recovery,” she said.

Ms Payne said the Morrison Government would invest $50 million in the Women@Work Program to help restore and exceed the pre-COVID-19 record levels of women’s workforce participation.

While a further $35.9 million will be invested in the Boosting Female Founders Initiative to support up to 282 additional start-ups and 4,300 women entrepreneurs. This initiative will also create a new service to provide access to expert mentoring and advice for women entrepreneurs.

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Originally published as Federal Budget 2020: Paid parental leave relief but childcare fees to rise