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Australian Government Coat of Arms

Budget | 2015-16

Budget 2015-16
Australian Government Coat of Arms, Budget 2015-16

How will child care changes affect families

More affordable child care

Two parents, two children

Nick and Kirsty have two children, Andrew aged 1 and Katherine aged 2. Nick works full‑time and Kirsty works part‑time for 24 hours per week (and travels 20 minutes to get to work). Their combined family income this year is $108,927,  rising to $115,000  in 2017‑18.

Andrew and Katherine attend long day care three days a week, costing $85.50 per day for each child.

Nick and Kirsty currently receive $17,266 in Government child care assistance; $7,855  under the Child Care Benefit and $9,410  under the Child Care Rebate.

Under the new Child Care Subsidy, Nick and Kirsty would be entitled to 100 hours of subsidised care per fortnight, as their total work hours, including travel time, are both over 48 hours per fortnight. In 2017‑18, their long day care centre charges $98 per child per day.

Based on their family income, they would be entitled to 69 per cent of their costs, and would receive $67.20 per child, per day.

In total, under the new Child Care Subsidy, they would receive $20,966  in 2017‑18,  which is $3,700 more than they would receive this year under the current system.

More child care support for low income families

Sole parent, two children

Charlotte is a single mother with two children, Calvin aged 9 and Susie aged 7. She works part‑time and has an adjusted taxable income this year of $47,359, rising to $50,000 in 2017‑18.

Calvin and Susie attend out of school hours care for three hours a day, three times a week. This costs $7.65  an hour this year. After receiving the Child Care Benefit and Child Care Rebate, Charlotte’s out‑of‑pocket child care costs are $35.52 a week.

Under the Child Care Subsidy, Charlotte will receive a higher rate of assistance. Her out‑of‑pocket costs will be more than $12 a week less in 2017‑18  than they would in 2015‑16.

If Calvin and Susie attend after‑school care for 40 weeks, they would receive $5,263 in 2017‑18, which is $1,176 more than they would receive this year under the current system.

More flexible child care options

Interim Home Based Carer Pilot Programme (Nannies Trial)

Greg and Sue are shift workers on a combined family income this year of $120,000.  Greg is a cleaning supervisor working full‑time on a rotating roster and Sue is a part‑time nurse working with an agency. They both have to work nights sometimes and their days vary.

They have three children, all below school age, one year old twins and a three year old. They currently use a combination of formal care, including Greg’s mother and the help of family friends as they often need child care outside of normal child care hours. This has meant that Sue has often had to turn down additional shifts.

Under the new Nannies Trial, they will be able to have reliable care for their children in their own home when they need it. The Agency helped them find a carer and work out the contractual and insurance arrangements. They have an agreed number of hours per fortnight but the hours are flexible to ensure care can respond to the changing nature of their shifts.

Because they now have reliable care, Sue feels comfortable taking on an extra shift. In 2016‑17, Greg and Sue’s total income is $130,000.

Under the Nannies Trial in 2016‑17, the carer, Sally, works a flexible 70 hours per fortnight at $28.00 per hour.

The subsidy supports 70 hours per fortnight for each child and, based on their family income, they receive a percentage (63 per cent) of the fixed hourly rate of $7.00 per hour per child or a total of $13.24 per hour.

In total, they would receive $24,100  in assistance, or $927 a fortnight.

Supporting people who want to work

Transition to work

Natasha is not currently working and receives an income support payment, but is studying in order to better her chances of future employment. Her two year old daughter attends a local long day care centre which currently costs $78.50  per day. By 2017‑18 the cost is $90 per day.

Natasha’s annual income of less than $65,710  in 2017‑18  means she will be eligible for assistance under the Child Care Subsidy, and further ‘top‑up’ under the Additional Child Care Subsidy.

As this assistance is activity tested, Natasha would be able to access 50 hours of child care per week as she is studying for 49 or more hours per fortnight (compared to the maximum of 36 hours per week allowed for approved study activities under the current system). Natasha would be subsidised for up to 95 per cent of child care costs, leaving her only five per cent ($22.50 per week) out of pocket.