Yahoo Finance Thousands of Aussie families to get cheaper child care today
The average family earning $120,000 per year will save $1,700 per year.
Around 1.2 million Aussie families will be getting cheaper child care today, when changes to the Child Care Subsidy (CCS) kick in.
The changes mean most families will get a greater percentage of their childcare fees covered, and more families will 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.
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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.
Here’s what is changing today.
What are the childcare changes?
From July 10, the family income limit to get the subsidy will increase from $356,756 to $530,000. This means more higher-income families will be eligible for the subsidy.
Families earning up to $80,000 per year will get an increased subsidy, rising from 85 per cent to 90 per cent.
Families earning more than $80,000 will get a subsidy that tapers down from 90 per cent, depending on their income. The subsidy will decrease 1 per cent for each $5,000 earned over $80,000, down to 0 per cent for those earning $530,000 or more.
For instance, a family earning $120,000 per year would be entitled to a new subsidy rate of 82 per cent. A family earning $200,000 per year would be entitled to 66 per cent.
If you currently receive the CCS, you can see your new rate using your online account through myGov or Express Plus Centrelink app. You don’t need to do anything to get the increased rate.
Who can get a higher subsidy?
Families with more than one child aged five or under in care will also be able to get a higher subsidy rate for their second and younger children, if they earn $362,408 or less.
Families earning $138,188 or less, will get a subsidy of 95 per cent. The subsidy percentage then tapers down depending on your income.
Childcare costs soar
Childcare fees grew faster than inflation and wage growth over the past four years, according to an interim report released last week by the Australian Competition and Consumer Commission (ACCC).
Fees rose by 20 per cent for centre-based day care and outside-school-hours care, and 32 per cent for in-home care.
The ACCC found government subsidies offset more than half of childcare fees, on average. But families’ out-of-pocket expenses have still increased by between 7 and 15.8 per cent.
The ACCC said it would be monitoring the early effect of the government’s changes to the CCS and would release its final report by the end of the year.
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