Thousands of families across Wentworth 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 this week.
Prime Minister Malcolm Turnbull, Member for Wentworth, 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.
“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 7,210 families in Wentworth that use child care and early learning services,” Mr Turnbull said.
These are the biggest reforms to child care and early learning in 40 years.
“We understand 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.
“We’re targeting support to the people who are working the most and earning the least. It is estimated our reforms will encourage more than 230,000 families to return to the workforce or increase their involvement in paid employment.
“Our approach stands in stark contrast to the Labor Party who don’t have a child care policy. They also tried to block our reforms every step of the way and stood against the additional investment in our reforms and the relief that will mean for families.”
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.
“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 Wentworth 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.”
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.
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.
For further information on the reforms, visit https://www.education.gov.au/jobsforfamilies