Is working solely to pay for childcare worth it? Experts weigh in

Half of Aussie parents with young children have considered quitting their jobs due to skyrocketing childcare costs. Experts reveal whether they should stick it out.

Exorbitant childcare costs are forcing parents to quit their jobs, in a move that is likely to cause them greater financial disadvantage in years to come.

Experts say working parents are stuck in a no-win situation, having to choose between using childcare that can erode entire pay packets or leaving the workforce and missing out on superannuation contributions, as well as opportunities for higher pay.

As costs of living continue to push families to the brink, many are opting for the latter – new research shows more than half of Australian working parents are considering resigning from their role due to unaffordable childcare.

Many more say they would leave if they were mandated to spend more time at the office, the research from global HR platform Remote reveals.

“Families are having to make some really tough choices,’’ says Emma Walsh, chief executive officer of social impact advisory Parents At Work.

“Do they take the hit (to their finances) now (by returning to work even when they’re paying more for childcare than they’re earning) or later (through reduced pay and retirement savings)?

“The evidence would suggest it’s much better for parents to stay connected to the workplace in the long-term, particularly when it comes to their superannuation.

“But, for many, going back to work means they’re losing money (to pay for childcare) and they’re going backwards – and that can be very scary.’’

Jo-Ann was a full-time carer for son Giovany, now aged 9, until he started kindergarten.

Working just to pay for childcare

Account manager Jo-Ann expected to take no longer than 12 months out of the workforce when she gave birth to her son Giovany nine years ago.

With her role made redundant while on parenting leave, Jo-Ann started looking for a new part-time position. But there was nothing that paid enough to cover the cost of putting Giovany in childcare while she worked.

Opting to stay home a little longer, she resumed her job search six months later to find little had changed.

“My husband and I worked it out and it felt like I would really just be working to pay for the childcare,’’ says Jo-Ann, who did not want her surname published.

The couple resolved that Jo-Ann would stay a full-time carer to Giovany until he started kindergarten.

But by then, employers were reluctant to hire the Sydney mum, believing her skills were no longer up to date.

Jo-Ann eventually found work at Hero Packaging, who she says have been understanding of her family responsibilities.

But she worries about the financial impact of being out of work for so long.

“The time I had (at home) with my son was a privilege and I don’t regret it,’’ she says.

“But I am worried about my (low) super (balance). If the costs of living keep going up exponentially like this, retiring is going to be a problem.

“We might have to move out of Sydney (to live in a cheaper area).’’

Parents are advised to both remain in the workforce in a part-time capacity, rather than one leave paid employment altogether.

Two are better than one

More than two-thirds of working parents have been forced to reduce their spending to keep up with childcare costs, Remote’s research shows.

The financial strain is also having an impact on relationships, with many working parents pressured by their partner to quit.

While every family situation is different, Walsh says it may be financially prudent for both parents to remain in the workforce in a part-time capacity rather than one leave paid employment altogether.

This way, both parents still receive superannuation contributions and remain on the radar of employers when opportunities for promotion and increased pay arise, she says.

Walsh also urges working parents to choose family-friendly workplaces with flexible work arrangements to reduce the need for childcare.

If parents do opt to take time out to care for young children, she recommends they regularly stay in touch with their employer and have early discussions about how to facilitate a return to work later.

Support for working parents

Working parents should push for more flexible and remote work conditions, to allow them to stay in paid employment and minimise the need for childcare, says Remote head of APAC GTM Jane Lee.

She is also calling for the government to introduce a childcare benefits scheme similar to the way Medicare operates in the health system.

Her stance is at odds with the NSW government, which earlier this month ordered public servants back to the office.

“Forcing anyone to return to (the) work(place) has never been a positive thing,’’ says Lee, who is also a working parent.

“You shouldn’t be penalised because you have a child. Why should you need to quit, or even think about quitting, because of how expensive childcare options are?’’

The burden of childcare

• 54 per cent of working parents with children under the age of five have considered quitting their jobs due to unaffordable childcare

• 81 per cent of working parents would consider quitting if they had to work more days in the office

• 55 per cent of men and 39 per cent of women have encouraged their partner to quit their job due to lack of affordable childcare

• 69 per cent of working parents have been forced to reduce their spending to cope with childcare costs.

Source: Remote