Federal government to accelerate increase in subsidy for four-month child care

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Changes to make childcare cheaper are being proposed for Australian families with two or more children below school age.

In August, Parliament adopted changes originally announced in the budget, aimed at reducing childcare costs for low and middle income earners and bringing more women into the workforce.

They were due to go into effect in July next year, however, the government is moving the start date forward to March, so families can access support earlier.

The plan will cost the government $ 1.7 billion over three years, but what does it all mean to you?

Here’s a look at what’s changing:

First, how do current payments work?

The Child Care Grant is the federal government’s primary program to help families meet child care costs.

It is means-tested and is paid directly to providers, who then pass this reduction in costs on to families.

Right now, if your combined family income is less than $ 69,390, you recover 85% of your child care expenses, with no cap.

The more you earn, the more this subsidy decreases.

If you pocket between about $ 189,390 and $ 353,680, the amount of money you can claim stops at $ 10,560 per child.

What is changing?

Under the changes, families with two or more children in care under the age of six will be able to receive an additional 30 percent on top of the current grant.

So, for example, if your first child is eligible for a 50 percent subsidy rate, your second will receive 80 percent.

It will be capped at 95%.

The annual cap is also being removed earlier than expected, ending in December.

It will be retrospective, which means that anyone who reached the cap before that date will have their personal expenses reimbursed by the government.

Two female children choose from a colorful texting box
If you only have one child in care, you will not get any extra money under the government program.(

ABC North Queensland: Nathalie Fernbach

)

Who is entitled to the extra money? How much money will they get back?

To be eligible, you must have two or more children aged five and under in care at the same time and have a family income of less than $ 353,680 per year.

About 250,000 Australian families qualify and, on average, they will earn more than $ 2,200 per year.

That means a family earning $ 110,000 a year with two children in care four days a week will earn about $ 100 a week, and Education Minister Alan Tudge said the changes would encourage more parents to work.

“The removal of the cap and the increase in subsidies means that more parents, especially mothers, can return to work or take more hours if they wish.”

When will you see the benefits and why is it sooner than you expected?

The increased grant goes into effect on March 7, 2022, four months ahead of schedule for the first time – and in time for the next federal election, which is due to take place by May 21.

However, Tudge insisted, the government has always maintained that it will try to push the changes forward if it can.

“These are benefits that will help families meet the cost of living and [the] economical, so we want to do them as quickly as possible. “

Who is missing?

If you only have one child in care, you are not going to get any extra money.

And if you have two currently in care, the additional subsidy will end as soon as your older child enters primary school.

The hands of an unidentified child playing with building bricks.
Labor say government policy would deprive 750,000 Australian families of any additional support.(

Pixabay

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Mr Tudge said the policy was designed to target families most in need of help.

“In some cases you work more or less those extra days without any financial benefit – once you pay off your child care expenses and, perhaps, a loss of your family tax benefits – so it will make a difference. . “

Early Childhood Labor Party spokeswoman Amanda Rishworth said the policy would deprive 750,000 Australian families of any additional support.

“Today’s liberal twist is a failed policy. It’s failed because it only helps a few families, it doesn’t help a lot,” she said.

“The benefit only happens when you have more than one child in care at the same time, so it doesn’t even last that long. “

Remind me again, what is Labor’s policy?

With elections slated for May, Labor could find itself in power as the changes take effect.

As part of his plan, subsidies would be lifted generally and paid to families with much higher incomes, raising the threshold from $ 354,305 to $ 530,000.

Ms Rishworth said her party’s policies would benefit many more families.

“The choice between the Liberal failure policy, which relieves only 25 percent of families, or the Labor policy which relieves 97 percent of families.

“Until election day, we will highlight the difference.


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