Federal Member for Parkes Mark Coulton said 5,350 families across the Parkes Electorate are set for child care cost relief and their children will benefit from more early learning opportunities as part of the Turnbull Government’s reforms to the system that passed Parliament late last week.
Mr Coulton said the new reforms would offer relief for families who are finding that fees and expenses put access to child care and early learning increasingly out of reach.
“These are the biggest reforms to child care and early learning in 40 years,” he said.
“We know the cost pressures that families face so we’ve taken action to overhaul a broken system to deliver more affordable, accessible and flexible services for families and children.
“Our changes will inject $1.6 billion of additional investment into the system – with around one million families across the country to be better off – including many of the 5,350 families in the Parkes Electorate that use child care and early learning services.
“We’re targeting support to people working the most and earning the least and it’s estimated our reforms will encourage more than 230,000 families to return to the workforce or increase their involvement in paid employment,” Mr Coulton said.
The reforms come into effect from 1 July 2018 and there are three key features:
• Better support for people working the most and earning the least – The changes simplify the current complicated rebate system by replacing payments with a single, means-tested Child Care Subsidy that boosts the current flat 50 per cent rebate rate to 85 per cent for hardworking families earning up to $65,710 and then tapers down to 20 per cent for families earning more than $250,000 and cuts out for families earning more than $350,000. Our reforms also introduce a three-step activity test with an entry point of four hours a week that gives families eligibility for 18 hours a week of subsidised child care. This will align hours of care with the combined amount of work, training, study, volunteering or other recognised activity being undertaken by parents.
• Relief from the rebate cap – We will abolish the $7,500 rebate cap to ensure families on incomes of $185,710 or less aren’t limited by a cap on the amount of child care they can access and the cap will be increased to $10,000 for families earning more than $185,710, overall offering relief to the approximately 100,000 families that hit the current $7,500 rebate cap.
• Downward pressure on incessant fee increases – Our reforms introduce an ‘hourly rate cap’ on the subsidies the Government will pay that will set a benchmark price so Australians have a reference point to hold providers accountable and from which they can expect prices shouldn’t dramatically exceed. We will also slash red tape so services can be more flexible in the hours they deliver instead of the current system where families who routinely need and use only four, six or eight hours of care, are charged for 10 or 12 hours.
Mr Coulton said the reforms were designed with regional and rural early childhood education and care services and their families in mind.
“Many services in regional and rural areas are part of the old ‘Budget Based Funded’ system that has capped funding and is closed to new services but under our reforms they will also have access to hundreds of millions of dollars in additional support and a funding guarantee,” Mr Coulton said.
“Our reforms also include measures to encourage workforce participation, stronger compliance powers to further stamp out rorting, more flexibility for the hours child care centres open and additional investment for services to support children from disadvantaged backgrounds or with additional needs such as disability.
“I look forward to discussing the reforms with families across Parkes Electorate and to seeing the benefits flow through to help household budgets, boost early learning opportunities and give families the opportunity to work or work more.”
Mr Coulton said in coming weeks the Government will begin communicating the changes to families and services, and a calculator will be available for families to determine how the reforms will benefit them.
For further information on the reforms, visit https://www.education.gov.au/jobsforfamilies
MEDIA CONTACT: Simon Chamberlain [0477 309 999]
Notes for editors:
Our reforms also include a ‘Child Care Safety Net’ that represents additional investment for services to support children from disadvantaged backgrounds or with additional needs such as disability.
The Child Care Safety Net will also ensure families who do not meet the activity test and are earning $65,710 or less have access to 24 hours of subsidised care per fortnight so they have opportunities to look for employment or more work if they are in a position to do so, and so that their children have access to early learning opportunities.
Other elements of our reforms will deliver stronger compliance powers that build on the $1 billion our actions and other legislation have stopped going out the door to people attempting to rort the child care system.
These detailed reforms are the result of consultation with experts, input from the Productivity Commission and three Senate inquiries and they are the most significant improvements to the system in 40 years.
Examples of benefits:
A family on $50,000 – both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be $3,295 better off a year
A family on $80,000 – both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be $3,424 better off a year.
A family on $94,000 – both parent/s working, with two children aged under 6 in long day care two days a week at $100 a day will be $1,771 better off a year
A family on $150,000 – both parent/s working, with two children aged 6 and under in long day care three days a week at $100 a day will be $1,626 better off a year .