Many Australian families are set to be thousands of dollars a year better off under the Turnbull Government’s new child care system, new data has revealed.
Minister for Education and Training Simon Birmingham said based on the income data and other details from families that have made the switch to the new system ahead of its start on 2 July, family budgets are set to be around $1,333 a year better off on average per child.
“These changes will deliver more support for more families,” Minister Birmingham said.
“Relief is on the way for families who have been struggling with the cost of child care, as long as they register for The Turnbull Government’s improved system.
“Based on the data of people that have made the switch to our new system ahead of the 2 July start date, a family with two children could be $2,666 a year better off on average.
“The Turnbull Government’s sweeping reforms to child care are set to put more money back in the pockets of working Australians.
“Child care fee relief for many families is just three weeks away, with more than 800,000 Australian families already making the switchover to the new system.
“While many families are set to be hundreds if not thousands of dollars a year better off, transitioning to the new system isn’t automatic and families need to make the switch to the new system through myGov. We’re urging families don’t delay, update your details today.
“By sticking to our plan for a stronger economy we’re able to guarantee the essential services Australians rely on including child care. It means reforming the child care system so that it’s working for families, rather than families having to work around the child care services they can afford.
“Altogether our changes are set to benefit nearly one million families and it is estimated around 230,000 families with increase their workforce participation.
“The Turnbull Government’s reforms represent a comprehensive overhaul to a child care and early learning system that Australians know is broken.
“Our reforms include $2.5 billion in extra investment as well as reforms retargeting subsidies to people working the most and to families earning the least, abolishing the $7,613 annual rebate cap for most families and introducing an hourly rate cap to help put downward pressure on fee increases.
“Our reforms to child care combined with our support for preschool are about ensuring more families get more support and that children get valuable early learning opportunities.
“The Turnbull Government’s significant reforms highlight that, despite their negativity, the Labor Party still refuses to outline any alternative to our improved model of supporting families with child care costs, even with just weeks to go until by-elections across the country.”
Families risk disrupting their child care subsidy payments unless they make the switch to the new system before 2 July by visiting www.education.gov.au/childcare or through myGov.
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.
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.
Examples of how families are set to benefit:
A family on $50,000 – both parent/s working, with two children aged under 6 in long day care two days a week at $100 a day will be around $2,000 better off a year
A family on $80,000 – both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be over $3,000 better off a year
A family on $150,000 – both parent/s working, with two children aged 6 and under in long day care three days a week at $100 a day will be more than $1000 better off a year