New analysis has revealed the suburbs and regions that are the biggest winners from the Turnbull Government’s child care changes that begin tomorrow, 2 July.
Minister for Education and Training Simon Birmingham said while data showed the average working family would gain an extra $1,300 each year per child, the new analysis highlighted families in some areas could be as much as $2,792 better off annually for each child.
Minister Birmingham said the biggest winners would be families on lower incomes as well as families working the most.
“This is about delivering more support for more families,” Minister Birmingham said.
“Nearly one million families are set to benefit from our changes and analysis shows they will mean families are hundreds, if not thousands of dollars a year better off.
“There’s still time left for those families who have left the switchover to the last minute. Don’t wait, get it done now. All you need to do is update your details through myGov or visit www.education.gov.au/childcare.
“Although we want everyone eligible to switchover before Monday to ensure no disruption to their payments, we have also put in place a safety net that will allow back payments to be made within the first three months of operation."
Minister Birmingham said the Government understood how tough families had been doing it with the costs of child care.
“Our plan for a stronger economy means we can deliver relief for families and guarantee the essential services like child care support,” Minister Birmingham said.
“We know how tough some families have been doing it with cost of living pressures, including strain on household budgets because of the cost of child care.
“The Turnbull Government’s tax relief for working Australians and our improved child care subsidy are about putting more money back in the pockets of families and making it worthwhile to work that extra day or those extra few hours.
“One of the key goals of these changes is to make re-joining the workforce or being able to pick up more work that bit easier by offering a child care system that is more affordable and flexible for more families.
“This is the most significant improvement to child care support in around 40 years. It means $2.5 billion extra investment as well as reforms retargeting subsidies to people working the most and to families earning the least, abolishing the $7,500 annual rebate cap for most families and introducing an hourly fee cap to put downward pressure on fee increases.”
Key elements of the Turnbull Government’s reforms
We’re increasing Australia’s investment in early childhood education and care by $2.5 billion over the next four years so that almost one million Australian families benefit - Low and middle income families will be the greatest beneficiaries from the package.
An activity test will ensure that taxpayer’s support for child care is targeted to those who depend on it in order to work, or work additional hours. It is estimated our reforms will encourage more than 230,000 families to increase their involvement in workforce participation. The activity test includes a minimum of four hours of working, looking for work, training/studying and volunteering
Fundamentally fair – this package provides the highest rate of subsidy to those on the lowest income levels and more hours of subsidy to those who work the most. We’re increasing the base subsidy from around 72 per cent to 85 per cent for the more than 370,000 families earning around $66,958 or less a year.
Low and middle income families, earning up to around $186,958, will no longer be limited by an annual cap on the amount of child care they can access – that’s more than 85 per cent of families using child care. Families earning more than around $186,958 will also benefit from an increased annual rebate cap of $10,190.
Introducing hourly rate caps recommended by the Productivity Commission to help put downward pressure on fee increases by setting a limit on what hourly fee the Government will subsidise based on an efficient price of what it costs to deliver child care
Our $1.2 billion Child Care Safety Net recognises vulnerable children and families need extra support. The safety net includes special funding for regional and Indigenous-focused centres to break down barriers to early learning and child care and 12 hours or around two sessions a week of guaranteed access to care/learning for families earning less than around $66,958 even if they don’t meet the activity test.