Yahoo Finance Aussie mum’s frustration over childcare subsidy: ‘It’s doing nothing'
Childcare facilities have been increasing prices since the new subsidy came into effect.
New mum Leah was excited when the new childcare subsidy was introduced, hoping it would take some pressure off the household budget. But her excitement didn’t last long.
“Our subsidy increase didn’t even offset the increase from the centres,” Leah told Yahoo Finance.
“The government is doing absolutely nothing. Some centres increased it by more than $10 or $15 a day.”
And Leah is not alone. Many childcare facilities upped prices once the new subsidy came into effect on July 10.
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What is the childcare subsidy?
Around 1.2 million Aussie families were set to get cheaper child care on July 10, when changes to the Child Care Subsidy (CCS) kicked in.
The changes meant most families would have a greater percentage of their childcare fees covered, and more families would qualify for the subsidy.
For the average family earning $120,000 with one child in care three days a week, the government said the changes would cut costs by about $1,700 a year.
Why are families not making the savings?
In the past week, many childcare providers have increased prices, some of which completely negated the potential savings from the subsidy.
“It’s been a pain. We were looking forward to making some savings but as soon as the subsidy increase came into effect we were told prices were going up,” Leah said.
Minister for Education Jason Clare said cheaper child care would help with cost-of-living pressures and make it easier for parents to return to paid work, or work more paid hours, if they chose to.
“Apart from their mortgage or rent, child care is the biggest bill that a lot of Australian families have to pay,” Clare said earlier this month.
A spokesperson from the Department of Education told Yahoo Finance that the Australian Competition and Consumer Commission (ACCC) is monitoring childcare costs.
"There are already hourly rate caps in place, putting downward pressure on fees, and the ACCC has been tasked with investigating the many factors that drive cost," they said.
Can childcare facilities raise prices?
Short answer, yes. There was nothing stopping childcare providers from increasing prices once the subsidy kicked in as most are privately owned.
Other Aussie parents were quick to bash the system online on a Reddit post complaining about the price increases.
“[Our childcare provider] raised it more than the extra subsidy. So, now I’m paying more out of pocket than before,” one person said.
“I cried when I realised I wasn't actually going to be better off,” another said.
“Thanks again [for the] privatisation of essential services. It's just like how private schools keep getting more and more taxpayer funds but also keep raising fees,” another parent complained.
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