Significant changes for childcare system
Dec 5, 2015
Dec 5, 2015
Wednesday, 02nd Dec 2015, the Australian Government announced plans to overhaul childcare arrangements.
Under the proposed package of significant reforms, from July 2017, existing Child Care Benefit (CCB) and Child Care Rebate (CCR) subsidies will be abolished and would be streamlined into one means-tested payment to support families where both parents work.
The proposed bill states the new Child Care Subsidy is subject to a new three-step activity test which aligns hours of subsidised care with the amount of work, training, study or other recognised activity undertaken. Under the new regime, parents will have to be working, studying or volunteering/training for at least eight hours a fortnight to qualify for minimum level of Government-funded child care support. Parents who work more than 16 hours and then more than 48 hours will be provided more hours of Child Care Subsidy.
Parents will have to self-declare to the government their working hours based on the amount of approved activity that they do over a fortnight. Parents will be subject to random spot checks by the government to ensure that they are complying with this requirement. However, a wide variety of activities have been introduced under the work and study test.
Low-income-families making less than $65,710, will receive a Child Care Subsidy per child covering 85 per cent of child care fee or a benchmark price, whichever is lower. This will scale down to 50 per cent for average families earning $170,710 and above.
Lower income families who don’t meet the activity test will be assisted through the Child Care Safety Net.
A cap on the annual amount families can receive will increase from current $7,500 to $10,000 per child and the limit will only apply to families earning more than $185,000.
The hourly benchmark rates at the time of introduction of the proposed changes will be $11.55 for Long Day Care, $10.70 for Family Day Care, $10.10 for Out of School Hours Care and $7.00 for the In Home Care (Nannies) pilot commencing in January 2016.
The ability for new parents to receive government funded Paid Parental Leave (PLP), in addition to any employer-provided parental leave entitlements, will be removed, from 1 July 2016.