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Major changes to child care support revealed

Helena BurkeNCA NewsWire
Families with two or more children in care will see a boost of 30 per cent on top of their original Child Care Subsidy rate from March 7 2022.
Camera IconFamilies with two or more children in care will see a boost of 30 per cent on top of their original Child Care Subsidy rate from March 7 2022. Credit: Supplied

Australia’s childcare fees are set to become more affordable with the removal of the cap on financial assistance for working families.

Families earning more than $190,015 have an annual subsidy cap of $10,655 per child each financial year.

But from Friday, the federal government will remove this cap, with thousands of parents expected to return to work or pick up more hours as a result of cheaper childcare.

Families bringing in a combined income between $190,00 and $254,000 can now expect 50 per cent of their childcare fees to be covered by the Child Care Subsidy.

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The removal of the annual cap will be applied retrospectively, meaning families who reached the cap before December 10 will have out-of-pocket costs for the 2021-22 financial year reimbursed.

Generic images of children playing at C and K's Newmarket Childcare Centre.
Camera IconFamilies earning combined income between $190,00 and $254,000 can now expect 50 per cent of their childcare fees to be covered by the Child Care Subsidy. Credit: Supplied

The scrapping of the cap comes ahead of an overall increase to the childcare subsidy, set to begin on March 7 2022, which will apply to families with multiple children.

Families with two or more children in care will see a boost of 30 per cent on top of their original subsidy rate.

Minister for Women’s Economic Security Jane Hume said the motivation to make childcare more affordable was driven by the importance of women’s workforce participation to Australia’s economic recovery from Covid-19.

“From today, the $10,655 cap will no longer apply, making it easier for parents from more than 18,000 families to return to work or pick up more hours,” Ms Hume said.

“This change will particularly support women, who represent the majority of primary carers, by reducing child care costs and giving parents more flexibility if they choose to return to work or want to work more hours.”

According to the Australian Bureau of Statistics, in 2018-19, 85 per cent of women who wanted a job or to work more hours but were not, reported “caring for children” as the primary reason preventing them.

This compared with just 15 per cent of men.

“Additional investment in the Child Care Subsidy will help remove disincentives to work,” Ms Hume said.

“These combined policy changes mean that a family earning $110,000 a year with two kids in care, four days a week, will be better off by around $100 each week.”

Originally published as Major changes to child care support revealed

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