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| The Child Care Package
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| What's it all about?
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There's been a lot of talk in the media recently about the Turnbull Government's proposed Jobs for families Child Care Package.
Education Minister Simon Birmingham says the package was put together in response to the Productivity Commission Inquiry into Child Care Early Childhood Learning and the government's objective is to better help parents who want or need to work, or who want to work more, while still supporting early childhood education.
So what does this actually mean for working parents? Well, according to the government the package will deliver a simpler, more affordable, more flexible and more accessible child care system through two main offerings:
A new Child Care Subsidy
A new payment which will commence in July 2017 and will replace the current Child Care Benefit and Child Care Rebate with a single, means-tested payment.
Child Care Safety NetThe
Targeted assistance for disadvantaged communities and vulnerable and at-risk children and their families to ensure they can access high quality child care while their parents are working.
These are in addition to the Nanny Pilot Program which kicked off in January this year.
The Child Care Subsidy
If the child care package is passed by the Senate the new subsidy will take place in July 2017 and will:
- replace the Child Care Benefit (CCB) and Child Care Rebate (CCR) with a single, means tested subsidy
- be paid directly to service providers and passed on to families
- be simpler than the current multi-payment system
- be better targeted and provide more assistance to low and middle income families.
Under the new subsidy system families earning $65,710 or less will receive a maximum subsidy of 85 per cent of the actual fee charged (up to 85 per cent of an hourly fee cap) and this amount decreases to 20 per cent for families with an income of $340,000 or more.
The subsidy is being introduced in conjunction with maximum hourly fee caps for child care as below:
Centre Based Long Day Care - $11.55 per hour
Family Day Care - $10.70 per hour
Outside School Hours Care - $10.10 per hour
Activity Test
The Minister has made it clear that the government's child care package will give priority to people who are working, training, studying or volunteering and with this in mind a new three-step activity test has been proposed.
If and when the activity test comes into effect access to the child care subsidy will be dependent on parents and carers participating in a certain number of hours of ‘activity' per fortnight:
- 8-16 hours of activity will qualify a family for up to 36 hours of subsidy per fortnight
- 16-48 hours of activity will qualify a family for up to 72 hours of subsidy per fortnight
- 48 hours or more of activity will qualify a family for up to 100 hours of subsidy per fortnight
This controversial measure has led to criticism that children who most need early childhood education and care won't be able to access it. However the government says that a broad range of activities will meet the activity test requirements, including paid work, being self employed, doing unpaid work in a family business, looking for work, volunteering or studying and there will be exemptions to the activity test for parents who legitimately cannot meet the activity requirements.
In addition to this the new Child Care Safety Net will mean families on incomes of $65,710 or less a year who will be able to access 24 hours of subsidised care per fortnight without having to meet the activity test. See more about the Child Care Safety Net below.
Child Care Safety Net
The government says the new Child Care Safety Net, due to kick in from July 2016 will help vulnerable children and families access early childhood services while making it easier for parents to enter and return to work. The Child Care Safety Net has three arms:
1. The Additional Child Care Subsidy (from July 2017)
A top up payment for families who are disadvantaged, including targeted assistance for:
- Children at risk of serious abuse or neglect
- Families experiencing temporary financial hardship
- Grandparents on income support who are the primary carer of their grandchildren
- Parents who are transitioning to work and are on income support
- Low income families who do not meet the activity test.
2. The Community Child Care Fund (from July 2017)
A competitive grants programme to assist child care services:
- Reduce the barriers in accessing child care, in particular for disadvantaged or vulnerable families and communities
- Provide sustainability support for child care services experiencing viability issues
- Provide capital support to increase the supply of child care places in areas of high unmet demand.
3. The Inclusion Support Programme (from July 2016)
To help child care services improve their capacity and capability to provide inclusive practices and address barriers to participation for children with additional needs, particularly children with disability.
What next?
The new child care package has been met with concern in some quarters with detractors concerned that more families will be worse off under the changes. Modelling conducted by Australia National University for Early Childhood Australia shows that up to 330,000 families will be disadvantaged by the changes.
In addition, research conducted by Deloitte Access Economics for the Secretariat National Aboriginal and Islander Child Care claims key components of the package would significantly reduce access to early years services for Aboriginal and Torres strait islander children.
The Child Care Package was introduced to Parliament in December and in order to pass it the government needed to secure the support of six of the eight Senate crossbenchers. The process had been stalled by the fact that the passage of the child care package was dependent on savings measures which were also in the Senate.
Update
The Child Care Package has been classified as "not proceeding" meaning that the legislation would need to be reintroduced to Parliament after the election.
The government seems committed to the Child Care Package, however with an election likely on July 2nd there may be some modifications announced in the Budget.
We will keep you updated on changes as they come to hand.
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