Results from our survey of 934 Australian parents show many struggle to pay for childcare and most believe the Government should contribute more towards costs.
34% of parents often struggle to pay childcare bills on time and 25% said have fallen more than two weeks behind with payments, the survey found.
Although many parents struggle to pay our childcare bills, 76% still believe childcare workers should be paid more. Childcare workers in Australia fall under the Children’s Services Award. Minimum wage is $17.68 per hour (at time of writing) and workers can earn up to $25 per hour.
83% of parents also believe the Government should contribute more towards their expense. On average, we found out-of-pocket costs for parents total $300 a fortnight.
And it seems the Government agrees that it should do more. In the May 2015 Federal Budget announcement, the Government agreed to increase the amount of the Child Care Subsidy benefits it gives to parents who want to return to the workforce.
How the new government subsidy will help parents
The Federal Government wants to encourage parents to return to paid work and designed the subsidy to make childcare more affordable. The new subsidy is not massive – families with household incomes of less than $165,000 will be better off by about $30 a week, depending on how many hours parents work. But it’s an improvement on the current child care benefits scheme, which is more complicated.
The key benefits are as follows:
- A new means-tested Child Care Subsidy will begin on July 1, 2017 to replace the current programs (Child Care Benefit, Child Care Rebate, and Jobs Education and Training Child Care Fee Assistance).
- Families earning up to $65,000 will receive 85% of the childcare cost per child, or a designated benchmark price, whichever is lower. Families with incomes of $170,000 or higher will receive 50% of childcare costs.
- Hourly benchmark prices will be quite low: $11.55 (long day care), $10.70 (family day care), $10.10 (out-of-school-hours care) and $7.00 (in-home care nanny pilot program).
- There will be no cap on subsidies for families with an income below $185,000.
- To receive the subsidy, parents must satisfy the new activity test by working, studying or training for 8 hours per fortnight. Parents on low incomes less than $65,000 who do not meet the activity test will still be eligible for up to 24 hours of subsidy per fortnight.
- The ‘no jab, no play’ policy remains: children who are not immunised correctly will not receive childcare subsidies, to protect our nation’s children.
- The subsidy is paid directly to childcare providers to prevent parents using the money in other ways.
- The subsidy will cost $3.5 billion over 4 years and will be funded by cuts to other Family Tax Benefit payments.
Not all rosy: The cost of the new subsidy
Despite its many benefits, the boost to childcare comes at the steep cost of budget cuts in other vital areas.
First, the Government has pledged to cut the Family Tax Benefit for single-income families when their children turn six-years-old. Labor has spoken out against the cuts, with Shadow Treasurer Chris Bowen saying, “Children don’t get cheaper when they turn six. It just makes no sense.”
Early Childhood Australia CEO, Ms Samantha Page, said: “We are concerned about the families who, for one reason or another, have not been able to have both parents participating in the workforce.” She stated the question of whether a parent stayed home instead of returning to work was not always a free choice.
Secondly, new parents will receive fewer benefits, as the Government plans to reduce the taxpayer-funded paid parental leave scheme (six-months of minimum wage plus superannuation). Under the change, parents who don’t receive maternity leave payments from their employers will still be able to claim the government’s parental leave benefits. Employed parents will have to rely on whatever maternity leave scheme their employer uses, meaning they may not be able to afford staying at home with their babies for as long.
It’s a big backflip from the Prime Minister’s revolutionary PPL policy, which went a long way towards getting him into office. However, Treasurer Joe Hockey said this change prevents “double-dipping” and will save nearly $1 billion over the next 4 years.
Labor Families spokeswoman Jenny Macklin slammed the parental leave cut. “This really shows this Government does not understand the pressures families are under,” she said.
Getting creative to beat the cost of childcare
Many parents are now turning to more creative – and more traditional – options when it comes time to return to work. Essential Baby has these top tips from Aussie parents:
- Mums who become friends in post-natal groups or classes say they help each other return to work part-time by a different mum taking care of a group of kids each day of the week.
- Grandparents who are retired or semi-retired. Many parents related to feeling guilty about “using” grandparents as babysitters a couple of days a week, until the grandies reassured them that they actually love spending time with their grandkids.
- Family day care can be cheaper than a childcare centre. There are fewer kids being looked after at once, and you only pay for the hours your child spends there.
- The Babysitters Club – well, sort of. FindaBabysitter.com.au lets mums and dads find a nanny or a babysitter for a couple of days a week.
- Nannies and au pairs. In 2015, au pairs only charged $200 a week on average for 35-40 hours of work. (However, there is no childcare subsidy for hiring an au pair.)