Joint media release
Minister for Education and Training, Senator the Hon. Simon Birmingham
Minister for Women, the Hon. Kelly O'Dwyer MP
Relief is in sight for the thousands of families that have been forking out the full fee for child care after their government subsidies ran out months before the end of the financial year.
Minister for Education and Training Simon Birmingham said new data revealed where the 63,180 families live that hit the dreaded $7613 annual rebate cap on their child care subsidy with a month to go until the new financial year.
Minister Birmingham said many families drop out of work to look after their children when their subsidy runs out making the current system a massive disincentive to work.
“Child care costs shouldn’t be a barrier to work like it has been for thousands of families with the dreaded annual rebate cap,” Minister Birmingham said.
“These families have been hardest hit by the failings in the old broken model of child care support.”
Minister Birmingham said the Turnbull Government’s new child care system would abolish the $7613 annual rebate cap for 85 per cent of families (those earning less than $186,958), and lift the cap to $10,190 a year per child for families earning more than that threshold.
“Our sweeping reforms will deliver more support to more families so they can afford to make choices about their child care,” Minister Birmingham said.
“We’re putting an end to the days when parents face the stress of reaching a funding cliff mid-year when they hit the rebate cap. No longer will people have to quite work or work fewer days because they run out of government support for their child care bills.
“It is expected around 230,000 families will increase their workforce participation thanks to our changes, and nearly one million families are set to benefit overall.
“Analysis shows families on average are set to be $1300 a year better off per child but they need to make the switch to the new system before it starts on 2 July. Just visit www.education.gov.au/childcare or update your details on myGov and you could be hundreds if not thousands of dollars a year better off.”
Minister for Women Kelly O’Dwyer said the Turnbull Government wanted more Australians in work and to keep more of their hard-earned money.
“That is why we’re delivering tax relief for all Australians and making it easier for lower to middle income families to access more affordable child care,” Minister O’Dwyer said.
“We know that access to affordable child care is a really important factor when mums or dads are returning to work, or when they are deciding to pick up an extra shift or an extra day of work. And these decisions have a big impact, both in the short and long term, on family finances and careers.
“With these child care reforms mums and dads and going to have greater capacity to take on work, keep more of their wages and stay engaged or return to the workforce.
“With over one million jobs created under this Government, more women than ever before are working. With a more affordable, accessible child care system, mums have even greater opportunity to undertake paid work and improve their own and their family’s finances.”