Childcare Reforms and What it Means For You

Childcare reforms maths

Just a little over a week ago, the Senate passed long awaited childcare reforms aimed at helping thousands of Australian families with childcare costs. Whilst these childcare reforms will benefit many, experts and industry leaders are disappointed the changes don’t go far enough and will leave many families worse off.

Childcare reforms and changes are often complex and political spin can make it difficult to work out exactly what it means for you. So here is a snapshot of these changes:

  1. The new reforms won’t come into effect until July 2018, so until then, the current structure will remain in place.
  2. The current Child Care Rebate (CCR) and Child Care Benefit (CCB) will be scrapped and replaced with a new subsidy.
  3. The new subsidy will be ‘activity tested’, meaning that BOTH parents have to work, study or volunteer for at least 8 hours per fortnight in order to receive the subsidy.
  4. If you don’t work enough hours to meet the ‘activity test’, AND if your family’s income is under $65,710p.a. then you will still receive 12 hours of childcare per week. This has been halved from the current 24 hours available. Experts are bitterly disappointed at this change as some families who rely on additional support, will be heavily impacted, meaning that ultimately their children’s education and early development may be at risk.
  5. If your family’s income is over $65,710p.a, but you don’t meet the activity test, then you will not receive the childcare subsidy at all.
  6. So how much will you get?
    • 85% of childcare fees for families earning under $65,710p.a.
    • Gradual reduction to 50% of childcare fees for families earning between $65,710 and $170,710p.a.
    • 50% of childcare fees for families earning between $170,710 to $250,000p.a.
    • Gradual reduction to 20% of childcare fees for families earning between $250,000 and $340,000p.a.
    • NO SUBSIDY for families earning over $350,000p.a.
  1. The subsidies are calculated on an hourly rate basis ($11.55 for centre-based care, $10.70 for family day care and $10.10 for outside school hours care), meaning that if you pay more than this hourly rate for your childcare, you will have to cover the gap, and the overall subsidy percentage may change.
  2. There is no annual cap on the amount of subsidies claimed for families earning up to $185,710p.a, however for those families who earn over this amount, they will only be able to claim a maximum of $10,000 per child per annum.
  3. A bonus subsidy will be available for disadvantaged families, such as those with children at risk of abuse or neglect; those experiencing temporary financial hardship; and grandparent carers on welfare.

The proposed changes still need to pass the lower house, so they are not set in stone just yet, although it doesn’t appear that there will be any opposition to them.

Whilst these childcare reforms will assist thousands of parents with their childcare costs, it has not addressed other important issues facing the childcare sector.

Minimum Wage

Minimum wage of early childhood educators is at incredibly low levels, meaning that it’s becoming increasingly difficult to attract and retain quality educators in the sector. Furthermore, the role of the educator has evolved with many centres offering quality early childhood education and development rather than a baby-sitting service. The fight for higher wages was brought up again earlier in March with over 1,000 educators walking off the job demanding higher pay.

Childcare Supply

Lack of available childcare in certain areas has and continues to be a huge challenge, causing significant stress and frustration for parents. Whether the lack of childcare is due to locality, inflexible work arrangements or simply not enough centres to support parent demand, many families are stuck without care for their children.


Much work needs to happen to ensure that families can, not only afford childcare, but are actually able to access it in their area.

Whilst change is required in this respect, can assist parents to search and compare centres with availabilities in their area or alternatively using a flexible care option by booking a casual spot at a centre of their choice.

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