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From 2 July, the current Child Care Benefit and Child Care Rebate will be scrapped and replaced by the new Child Care Subsidy.
The Minister for Education and Training, Simon Birmingham, tells SBS that the new system will be simpler for parents: "We understand that the child care system can be difficult for people to navigate, especially, perhaps, people from language backgrounds different than English, which is why we're undertaking the simplification with a single new childcare subsidy.”
How will it work?
The Child Care Subsidy will be paid directly to child care services.
To get the maximum amount of subsidy, both parents need to be working several days a week or be doing other activities that qualify, like studying, volunteering, looking for work or being on parental leave.
“It's about making sure that overall, we're targeting childcare subsidies to people who really need it to be able to engage in the types of activities that we want people to be active in our society doing," says Senator Birmingham.
How will you fare?
It looks like most parents will be better off once the new Child Care Subsidy comes into place.
From July, there will be no cap on the amount of Child Care Subsidy for families earning less than $185,710 per year. Currently, many families have their Child Care Rebate capped at around $7500 a year per child.
Senator Birmingham says the government wants to make sure that being able to afford childcare is not something that prevents parents from working.
Early Childhood Australia CEO Samantha Page says that families where both parents have stable jobs will benefit the most from the new child care scheme. But families where one of the parents is not working full-time could see the money they receive for child care go down.
"If one or both parents are in casual work or contract work or in fluctuating economies where they might have work for a couple of weeks, then nothing for a couple of weeks, those parents will potentially be negatively affected by the activity test. It's very important they understand how that will impact on them," she says.
To have an idea of what the changes mean for your family, the Department of Education has created an online estimator.
How to prepare?
The online estimator allows you to find out if you’re being penalised for not having enough hours of activity. You can always make changes in the next few months.
"What they can do is perhaps enrol in some study or sign up as a volunteer or ask for their income to be averaged, particularly for people who are in casual work, they can ask for their income to be averaged over a three-month period so that they can continue to receive a subsidy so that their children can continue to attend early learning," explains Page.
Senator Birmingham says that families who are currently enrolled in the child care system will receive more information in the coming weeks.
You can also find more information online here. Brochures in seven languages (Arabic, Dari, English, Korean, Simplified Chinese, Traditional Chinese and Vietnamese) have been distributed to community organisations, migrant resource centres and child care service providers. They will be available online shortly.
To find out more, visit education.gov.au/ChildCarePackage.
Estimate your Child Care Subsidy with the online estimator