Australia’s exorbitant childcare fees are set to become more affordable after a major overhaul.
Australia’s childcare fees are set to become more affordable with the removal of financial aid limits for working families.
There is an annual subsidy cap of $10,655 per child in each fiscal year for households earning more than $190,015.
But starting Friday, the federal government will remove the limit, as thousands of parents are expected to return to work or take more hours as a result of affordable childcare.
Families with a combined income of between $190,00 and $254,000 can now expect that 50 percent of their childcare fees will be covered by a child care subsidy.
The removal of the annual limit will be implemented retrospectively, which means households reaching the limit before December 10 will be reimbursed their out-of-pocket expenses for the financial year 2021-22.
The elimination of the cap comes ahead of an overall increase in childcare subsidies, which will apply to families with multiple children, starting March 7, 2022.
For families with two or more children in the care, there will be an increase of 30 percent over and above the basic subsidy rate.
Women’s Economic Security Minister Jane Hume said the move to make childcare more affordable was inspired by the importance of Women’s workforce participation in Australia’s economic recovery from COVID-19.
“Starting today, the $10,655 limit will no longer apply, making it easier for parents of more than 18,000 families to return to work or take more hours,” said Ms. Hume.
“This change will particularly support women, who represent primary caregivers, by reducing childcare costs and giving parents more flexibility if they want to go back to work or work longer hours. Huh.”
According to the Australian Bureau of Statistics, in 2018-19, 85 percent of women who wanted a job or wanted to work longer hours, but cited “child care” as the primary reason.
This compares with only 15 percent of men.
“Additional investment in child care subsidies will help remove incentives to work,” said Ms. Hume.
“These combined policy changes mean that a family earning $110,000 a year with two children in care, four days a week, each week would be better off by about $100.”