The childcare rebate

How parents are saving $450 a week on childcare

AIMEE Mulqueen's commute has increased dramatically from about 10 minutes to almost an hour but she says it's worth it to save about $350 a week in childcare.

The Brisbane mother returned to full-time work this month after giving birth to her second child five months ago. She believes this would have been impossible if she had remained in her inner city home.

Ms Mulqueen said her family first started considering a move to the bayside suburb of Wynnum for lifestyle reasons but then realised it was going to provide huge cost savings for childcare as well.

She said childcare would have cost her $120 per child, per day if she had remained in her home in Norman Park, a couple of kilometres from Brisbane's CBD.

"It just wasn't economical to pay that for two children," Ms Mulqueen told news.com.au.

"I would have been paying about $1200 a week for childcare, which is just crazy.

"My whole wage would have been going to childcare."

Ms Mulqueen said many other families she knew were facing the same dilemma and were looking at other options including nannies.

"My cousin has an au pair that she uses for three days and this saves her about $100 a week on childcare," she said.

"A lot of people are going down that track because conventional childcare is too expensive."

Ms Mulqueen has also welcomed the government's changes to the childcare system, which will see her rebate go from a limit of $7500 a year to $10,000 a year, starting from July 2.

"All of our network of family and friends agree the new system will benefit them in a positive way," she said.

"I think that this is definitely a positive start for people with a young family and working women wanting to return to the workforce," she said.

"Hopefully we will have a bit more of a career because of these changes."

Minister for Education and Training Simon Birmingham said nearly one million families would benefit from the childcare overhaul.

"It is estimated that the package will encourage more than 230,000 families to increase their workforce participation," he said.

"Our plan supports families that need it the most by better targeting subsidies to people earning the least and to families working the most."

While subsidies will be better targeted, the availability of childcare may still be an issue for some parents.

Economist Bob Breunig, director of the Tax and Transfer Policy Institute at ANU's Crawford School of Public Policy, said it was a bit of a mystery why there was a shortage of childcare in some areas but not others.

"There is certainly demand for certain centres not being met," he told news.com.au. "It's not clear why providers don't step in to meet demand. I think the cost of regulation might be too high."

He said the government's new childcare policy would see about 85 per cent of families get cheaper childcare.

"The package helps people at the middle (income levels) and the upper middle more than it helps people at the bottom, and it makes those at the top less well off," he said.

"On average, overall people will have more money to spend on childcare and our model predicts people will work more."

WHAT IS CHANGING?

Most people will get more money to put towards their childcare but this varies depending on household income.

Families on a combined income of less than $65,000 will have 85 per cent of their childcare bills paid.

This will taper down to 50 per cent once you are earning $170,710.

There will be no subsidies for those earning more than $350,000.

Taper rates for current Child Care Fee Assistance (shown by red line) and the new Child Care Subsidy (green line). Picture: Office of the Minister for Education and Training
Taper rates for current Child Care Fee Assistance (shown by red line) and the new Child Care Subsidy (green line). Picture: Office of the Minister for Education and Training

All parents will have to work, study or volunteer for at least eight hours a fortnight to get the maximum benefit.

If you are not working but earn less than $65,710 a year, you will get 12 hours of subsidised care.

The Federal Government has also developed an online calculator to estimate how the changes impact individual families.

Email: charis.chang@news.com.au | Twitter: @charischang2



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