• Tony Bosworth

Nearly 6000 Macquarie electorate families to be better off in 2022 through Budget child-care changes

The Federal Budget happens on May 11, so government politicians are drip-feeding details - this one today from Senator for Western Sydney, Marise Payne, who says around 5850 families in the Macquarie electorate - that's Hawkesbury and the Blue Mountains - will reap the benefits from an additional $1.7bn in child-care funding as part of the 2021-22 Budget.

The changes will come into effect from July 1 next year - 2022.

“These changes are going to give greater choice to Hawkesbury parents who want to work an extra day or two a week,” Senator Payne said.

The changes to be announced in the Budget will cut the cost of child-care and lower the disincentive to take on an additional day or two of work for many families, says Sen Payne.

The Senator quotes a single parent in the Hawkesbury on $65,500 with two children in four days of long day care who chooses to work a fifth day will be $71 a week better off.

Under the current arrangements the maximum child-care subsidy a family can receive is 85 per cent and the level is tapered so that those families that earn the least receive the most.

At the moment, these subsidies apply at the same rate per child, no matter how many children a family may have in child care. For families with more than one child in care this means that their child-care costs double when they have a second child.

Additionally, families with combined incomes above $189,390 face a child-care subsidy cap of $10,560 per child per year.

As a result, these families start paying full fees towards the end of the year, which Sen Payne says “reduces their incentive to participate in the workforce”.

As part of the 2021-22 Budget, and starting on 1 July 2022, the Government will:

  • Increase the child-care subsidies available to families with more than one child aged five and under in child-care. Around 5850 families in Macquarie are in this position.

  • Remove the $10,560 cap on the Child Care Subsidy

For those families with more than one child in child-care, the level of subsidy received will increase by 30 per cent to a maximum subsidy of 95 per cent of fees paid for their second and subsequent children.

Half of Australian families will receive – from 2022 - a 95 per cent subsidy for their second and subsequent children.

A family in the Hawkesbury earning $110,000 a year will see the subsidy for their second child increase from 72 to 95 per cent, and would be $95 per week better off for four days of care.

A family with three children on $80,000 would have the subsidy increase from 82 to 95 per cent for their second and third child and be $108 per week better off for four days of care.

Minister for Education and Youth, Alan Tudge, said the measures would further ease the cost of child care and encourage workforce participation, particularly for larger families.

“Our child care system provides the most support to those who need it most,” Minister Tudge said.

“These measures will help remove the barriers for parents, particularly mothers, to return to the workforce or to increase their hours, as their family grows.”

Senator Payne said it would mean there was greater choice for Australian women and men as they balanced their family and work responsibilities.

“This is a targeted investment that makes child-care more affordable, increases workforce participation and boosts the economy.

“For women in particular, it opens the door for those choosing to work or to work more, which is critical to their own economic security and a prosperous Australian economy.

“Increasing the Child Care Subsidy is an important measure that will help reduce the disincentives for women to participate in the workforce to the full extent they choose.”

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