Childcare cost pressure eases

Families in Barker will reap the benefits from an additional $1.7b investment in childcare as part of the 2021-22 Federal Budget.

The changes, which deliberately target low and middle income earners, will cut the cost of child care and lower the disincentive to take on an additional day or two of work for many families.

For example, a single parent in Barker on $65,500 with two children in four days of long day care who chooses to work a fifth day will be $71 a week better off.

Under the current arrangements the maximum childcare subsidy a family can receive is 85% and the level is tapered so that those families that earn the least receive the most.

These subsidies apply at the same rate per child, no matter how many children a family may have in childcare. As a result, for families with more than one child in care this means their childcare costs double when they have a second child.

Additionally, families with combined incomes above $189,390 face a childcare subsidy cap of $10,560 per child per year. As a result, these families start paying full fees towards the end of the year which reduces their incentive to participate in the workforce.

As part of the 2021-22 Budget, and starting on July 1, 2022 the government will:

• Increase the childcare subsidies available to families with more than one child aged five and under in childcare. Around 4290 families in Barker are in this position.

• Remove the $10,560 cap on the Child Care Subsidy, benefitting around 18,000 families. For those families with more than one child in childcare, the level of subsidy received will increase by 30% to a maximum subsidy of 95% of fees paid for their second and subsequent children.

Half of Australian families will now receive a 95% subsidy for their second and subsequent children. Under these changes, a family in Barker earning $110,000 a year will have the subsidy for their second child increase from 72 to 95% and would be $95 per week better off for four days of care.

A family with three children on $80,000 would have the subsidy increase from 82% to 95% for their second and third child and be $108 per week better off for four days of care. Member for Barker Tony Pasin said the changes would have benefits for both the economy and families in Barker.

“These changes strengthen our economy and at the same time provide greater choice to parents who want to work an extra day or two a week,” he said. “This is a targeted and proportionate investment that simultaneously makes childcare more affordable, increases workforce participation and boosts the Australian economy.”

Mr Pasin said it would mean there was greater choice for Australian women and men as they balance their family and work responsibilities.

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