A draft report on childcare services has been released today. I believe any parent with a child in care should read it.
A key recommendation is to replace the current multiple childcare subsidies with just one which would be paid directly to the parents’ choice of provider, and be means and activity tested.
The recommendations for means testing a single childcare rebate would still see all eligible families receiving a minimum of 30% of their reasonable childcare fees reimbursed by taxpayers. More details about this at the bottom of this post.
Other key recommendations:
> Nannies being eligible for childcare subsidies subject to appropriate qualifications (au pairs would not be eligible).
> Removing restrictions on the number of child care places for occasional care and the hours that centres have to be open in order to receive Government subsidies.
> School principals being responsible for ensuring schools offer before and after school care, including care for preschoolers.
> A continuation of government support for access to preschool for all children in the year before starting school.
> Increasing funding and subsidies for children with disabilities and additional needs.
The Productivity Commission’s preliminary economic modelling found the measures would likely result in up to 47,000 more full-time people entering the work force, a rise in labour supply of 0.4%.
The commission says economy-wide impacts of this are likely to be relatively small with a GDP impact of, at most, an additional $5.5 billion, but the social significance should not be underestimated.
The cost to government of the preferred settings is estimated at $8 billion per year. This is slightly above the forward budget estimates, but the commission has also included analysis for assistance arrangements that are likely to be within the Government’s funding envelope.
Details about the proposed Early Care and Learning Subsidy (ECLS)
Under the Commission’s proposed child-based assistance scheme (ECLS), the rate of assistance received by families for a child attending a formal ECEC service would be determined by the ‘deemed’ cost of providing a reasonable standard of ECEC (including a profit margin), given the type of service provided (care, education or a combination thereof) and the age of the child. The ECLS would:
• be available for all centre-based ECEC services (including long day care, occasional care and OSHC) and all home-based care (including family day care and approved nannies) which satisfy the appropriate National Quality Standards
• apply to the hours of care charged for, up to 100 hours of service per fortnight
• vary with family income, including tax-free income and all other welfare payments received, such that those with a family income of $60 000 or less would have 90 per cent of the cost of ECEC subsidised by the Government, reducing gradually to 30 per cent for those with a family income of $300 000 or more
be available for children whose parents undertake at least 24 hours per fortnight of actively looking for work, undertaking work, study or training; or are in receipt of a disability support pension and unable to work; or in receipt of a carers payment and unable to work; or for children who have, as their primary carer, someone other than their parent(s)
• have the deemed cost legislatively indexed to the annual change in the relevant wage for ECEC services
• be paid directly to providers, and be passed on transparently as a discount in the fees charged.
View the draft report online: http://www.pc.gov.au/projects/inquiry/childcare/draft
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22-07-2014 08:44 #1
Removal of non-means tested CCR and other changes to CCB...
22-07-2014 10:56 #2
Thank you for linking this. I heard the news this morning and my heart dropped. Having two in care from end 2015, it would nearly not be worth me going back to work without CCR. But I'll read the report and see where we would end up if the changes were implemented.
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22-07-2014 11:11 #3Senior Member
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I don't like the idea of it being paid to the provider. A lot of my friends choose to get a lump sum at the end of the year because they work in jobs where they just can't estimate income.
22-07-2014 11:14 #4
I've done the maths for our circumstances and our OOP costs for childcare would go from 12.5k per year to 14.7k
it's bloody ridiculous
I'd drop to part time and the government would lose quite a bit of tax money from me. They would actually lose more tax money than what they currently subsidy for childcare.
So net operation = less money in the governments pocket.
But I'm one individual and I bet (well hope) that overall the government budget would be better under the new scheme.
22-07-2014 11:18 #5
Completely ridiculous. While I'm an outspoken supporter of low income families, taking away thousands in CCR is a slap in the face to working mothers. They think they are saving money.... but women are just going to cut their hours bc it's not going to be worth working them.
Encourage women to return to work and pay tax by making child care affordable. It isn't rocket science.
22-07-2014 11:24 #6
Feel free to correct me if I'm wrong, but wouldn't many people be far better off with the proposed plan?
I actually like that SAHPs aren't eligible for childcare assistance, it's not necessary and I would much rather that funding go to working parents/studying/disability care parents
I read a comment along the lines of "Have you ever taken a 2 year old grocery shopping? How am I supposed to do that without childcare?" Why the heck is the government paying for a sahm to do her groceries child free?! :what:
22-07-2014 11:27 #7
The way I read it, they will still pay CCB?
"The recommendations for means testing a single childcare rebate would still see all eligible families receiving a minimum of 30% of their reasonable childcare fees reimbursed by taxpayers. More details about this at the bottom of this post."
I'm not sure I support it if that's the case. Pre school/pre prep is very expensive, and imo is a need not a want. It will see low income families not sending their kids to pre school which can be argued may put kids behind.
ETA I know it won't be called CCB anymore but SAHM's still have some access?
Last edited by delirium; 22-07-2014 at 11:31.
22-07-2014 11:29 #8
I do agree with a few parts of that proposal
- simplifying things to make it 1 payment makes sense. It is currently very complicated with CCr, CCB, Jet and other schemes .. makes working out the cost of childcare difficult.
- means testing it makes sense. Those on lower incomes SHOULD get more help than those on higher incomes.
- I agree with those on higher incomes still getting 30%. If there is no rebate, then people on higher incomes simply will not go back to work ... so they wont pay tax and it will be LESS income for the government. So yes, even people on >$300,000 should still get the 30% rebate.
- I agree with schools being responsible for Out of School Care.
- I agree with Nannies being eligible for the CCR/benefit. This will free up places and childcare centers or FDC for those who want them. One of the issues facing parents now is the lack of places
Being paid direct to providers is difficult if the amount of the subsidy varies based on income ... you get variations on assessments which arent always good. That side of things still needs work
22-07-2014 11:32 #9
22-07-2014 11:33 #10
Well they proposed to ******line the current multiple subsidies (CCB and CCR) into one system.
Which is a great idea
Whether people are better off now or under the proposed system depends on many parameters - so one would need to check and do the maths.
The new proposed subsidize is not based on childcare price like the CCB and CCR are but on deemed cost.
Which is very dangerous.
How could there be a one cost for all of Australia? Of course it is a lot more expensive to run a childcare centre in inner Sydney than it is in country Victoria.
IMO it wouldn't make sense to leave the inner city people with higher out of pocket costs.
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