The Senate sat late into Thursday night to pass federal government’s childcare package, which they claim will benefit one million families.
Under the $1.6 billion package, a family earning less than $65,000 a year will pay just 15 per cent of their childcare fees with taxpayers footing the remainder of the bill.
The means-and-activity tested subsidy, which requires both parents to work, study, volunteer, or search for work for at least eight hours a fortnight, tapers down to 20 per cent for those earning $340,000.
All subsidies cut off for families earning more than $350,000.
Here’s what you need to know about the changes to childcare fee subsidies:
- Scrap the existing system of payments including the Child Care Rebate (covers 50 per cent of fees up to annual cap of $7500) and the means-tested Child Care Benefit.
- Replace them with a single, means- and activity-tested subsidy.
- Activity test means both parents must work, study or volunteer at least eight hours a fortnight.
- Payment covers 85 per cent of fees for families on $65,710 or less.
- Covers 50 per cent of fees for families on $170,710-$250,000.
- Tapers down to 20 per cent between $250,000-$340,000
- Families earning more than $350,000 receive no subsidy
- Fee subsidies based on a set hourly rate ($11.55 centre-based day care, $10.70 family day care, $10.10 outside school hours care).
- No annual cap on subsidies for families on $185,710 and under.
- $10,000 annual cap on subsidies for families earning more than $185,710.
- A bonus subsidy for disadvantaged families, such as those with children at risk of abuse or neglect; those experiencing temporary financial hardship; grandparent carers on welfare.
- Starts on July 2, 2018.
- 1.2 million children were in child care in 2016.
- Government figures say almost 816,000 families will be better off.
- 128,000 families will get reduced subsidies, including 52,100 earning less than $65,710 a year (mainly due to activity test).
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