Call for PM to move on affordability urgently
Australian families are facing a three-year wait for child care relief if the Turnbull Government cannot get its child care package through the Senate in the next few weeks.
Goodstart Early Learning said the legislation must be introduced urgently as more than 110,000 families are expected to exceed the childcare rebate cap this year, leaving many struggling to pay the full cost of childcare for months at a time.
New Government data shows that while childcare fees rose by an annual average of 5.4 per cent p.a. since 2013, families’ out of pocket rose by 8.3 per cent p.a. because Government subsidies have not kept up.
With average incomes rising by less than 2 per cent p.a. the result has been that for working families the cost of childcare has been eating into their after tax earnings.
Australia’s largest not-for-profit early learning provider is concerned struggling families are still waiting for help three years after they were first promised more support and without urgent action they could be waiting three more.
“The childcare reform package will make a significant difference to hundreds of thousands of Australian households,” Goodstart CEO, Julia Davison said.
“Today they can see for themselves by answering a few simple questions in a childcare subsidy estimator (see link below).
“The new childcare package is long overdue as childcare assistance has not been keeping up with the rising cost of care.
“Families need these reforms passed during the final parliamentary session for 2016. If not there’s a very high risk they will still be waiting for help at the next election as complex IT systems need to be developed to introduce the new single subsidy system.
“This is particularly the case where both parents work and use more than three days of childcare a week, as successive governments have frozen the childcare rebate cap at the 2008 level of $7500.
“This year more than 110,000 families are expected to exceed the cap, leaving many struggling to pay the full-cost of care for weeks and sometimes months.
“That acts as a huge disincentive for many working parents to work more than two or three days a week.
Families simply cannot afford to wait any longer for relief,” Ms Davison said.
New modelling by Goodstart Early Learning
A middle income family with a child full time in a typical childcare centre could be around $97 a week better off. In part because the cap on Child Care Rebate would be removed for all but the top 15 per cent of families earning more than $185,710 a year. The cap, currently $7500, has not been increased since 2008.
Some examples of what the modelling shows:
- A two income working family earning $100,000 a year with a child in full time care in a typical child care centre would be $76 a week better off. If they had a child in care three days a week, they would be $30 a week better off;
- A two income working family earning $150,000 a year with a child in full time care would be $97 a week better off. If they had a child in care three days a week, they would be $15 a week better off;
- A sole parent working family earning $60,000 with a child in full time care a year would be $51 a week. If they had a child in care three days a week, they would be $37 a week better off;
- A family earning $350,000 with a child in full time care would be $56 a week worse off;
- A single income working family earning $70,000 with a child in childcare two days a week would be $82 a week worse off because of the reduced base entitlement for low income families.
- A non-working family earning $40,000 with a child in childcare two days a week would be $12 a week worse off.
To estimate your rebate under the Jobs for Families bill, visit: https://www.goodstart.org.au/rebate-estimator