As of July this year, the Federal Government’s changes to the Child Care Subsidy rates will be in effect. These rates are expected to provide cost-of-living relief to approximately 1.2 million Australian families when it comes to early childhood education and care fees, including those at our Tarneit kindergarten and early learning centre. So are you one of the 1.2 million Australians who need to know what is happening with the Child Care Subsidy and childcare centres near you?
What Will the Reforms Change?
Over recent years, child care costs have increased by 49%. Similarly, the cost-of-living crisis is currently affecting many Australians. Therefore, the Federal government will enact reforms to the Child Care Subsidy (CSS) rates in an effort to provide relief to approximately 96% of Australian families with a child in care. Ultimately, from July 2023, most families using childcare will receive more CSS.
This includes raising the maximum CSS rate from the current 85% to 90% for those families with a combined income of $80,000 or less. From there, the CSS rate will taper down one percentage point per additional $5,000 in combined income. Therefore, you can still receive some form of relief if you have a child in care and are earning under $530,000.
Additionally, it is important to note that the existing rate of 95% for families with more than one child aged 5 and under in care will stay. This includes families earning below $362,408 with more than one child aged 5 or under in care. However, this higher rate for second and younger children will stop once the family earns $362,408 or more. They will then receive the standard CSS rate for all children.
Similarly, there will be an additional subsidy for families with First Nations children. Coming from a $33.7 million investment, this will see the applicable subsidised hours rising to 36 hours per fortnight. This is expected to make a difference to approximately 6,600 families, and encourage many more to use available care options.
But What Will These Changes Look Like for You?
The exact impact of these reforms on your family’s budget will depend upon your financial situation and the number of children in care. However, as an example, if you were to earn a combined income of $120,000 and have a child in care 3 days a week, you could expect to save $1,700 a year. This saving could then be put towards other expenses. Alternatively, it may allow you to place your child into care for additional days. You or your partner could then participate more in the workforce, increasing your earning power.
Why Are These Reforms Happening Now?
These reforms are part of a $4.7 billion investment package from the Federal government as part of their Cost-of-Living Relief Budget. The legislation behind these reforms passed late last year, so we are now seeing them go into action.
The driving ideas behind these changes to the CSS rates and the overall investment into the Early Childhood Education and Care (ECEC) sector are twofold.
Bringing Women Back Into the Workforce
This rate reform acknowledges that obtaining child care is a barrier to returning or entering the workforce for many parents, especially women. In fact, approximately 72,600 Australian parents in 2021 reported they were not in the workforce because of the costs of child care. Therefore, it is hoped that with more affordable child care, women can increase the hours they work. Estimates predict women being able to work an additional combined 1.4 million hours per week in 2023–2024. This is the equivalent to an extra 37,000 full-time workers.
Improved Quality of Affordable ECEC
Quality early childhood education and care is extremely important. It has been found that those children who receive some ECEC are less developmentally vulnerable than those that do not receive any. Therefore, alongside helping to make ECEC more affordable, the government is funding both the Australian Competition and Consumer Commission (ACCC) and Productivity Commission to investigate child care related matters. For instance, the ACCC is tasked with understanding what drives the costs of ECEC. At the same time, the Productivity Commission will look at the existing ECEC system and provide recommendations to achieve accessible, equitable and affordable high-quality ECEC.
What Else Can You Expect As the Government Focuses on ECEC?
Alongside these rate changes, this relief package has two other key focuses. The first being greater transparency in the ECEC sector. This would include large providers needing to report both their profit and revenue, as well as commercial leasing information. For parents, this means a government-website that lists all approved providers with their real-time fee data and quality ratings. You could also see the average year-on-year fee increases. The aim of making this information freely available is to help you and other parents make an informed decision that best suits your budget and family situation.
The other key focus is to investigate and reduce fraud and non-compliance. This will ultimately be achieved through a collaborative government approach to identifying, prosecuting and stopping fraudulent and criminal activities. As a parent, this means that the rate subsidy will be more accessible for you, as it is only being used by those who need it and meet the specified requirements.
Prioritise Your Child’s Care & Future
It’s important to take advantage of these rate reforms and contribute to the long-term goals from the Federal Government. This highlights to policymakers that the reforms are needed and will be eagerly used, ideally prompting additional incentives and changes.
With your CSS rate relief, now is the time to enrol your child at Lili’s Early Learning Centre. Get in touch today to learn more about your child’s early childhood education and care opportunities at our Sayers Rd, Tarneit kindergarten, childcare early learning centre.
