Turnbull Government Introduces New Child Care Subsidies Bill
Thursday 7 January 2016 @ 11.25 a.m. | Legal Research
Late last year, the Turnbull Government introduced the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 into the House of Representatives. The Bill introduces aspects of the Government’s “Jobs for Families Child Care Package”, with the changes proposed to be introduced in July 2017. The Bill would see currently existing childcare subsidies streamlined into a single means-tested payment, the “Child Care Subsidy” (CCS).
Introducing the Bill into Parliament, Mr Luke Hartsuyker, the Minister for Vocational Education and Skills said:
“Our objective is to help parents who want to work, or who want to work more, while still focusing on early childhood education.
Having two parents in paid employment has become a necessity for most families because of the changes in our society and economy over many years. More affordable access to quality child care puts the opportunity of work within reach for more families.
It is important to understand that support for child care is not a welfare payment. It is a payment that makes the cost of child care more affordable for families who need or choose to be in work.”
The Government’s new package follows a 2015 Productivity Commission report into Childcare and Early Childhood Learning and a follow up regulation impact statement consultation process.
Key Details
The two new subsidies are outlined in the Explanatory Memorandum as follows:
“The Bill proposes to introduce the Child Care Subsidy (CCS), a single, means-tested subsidy that will be better targeted to provide more assistance to low to middle-income families and to replace current child care payments. The CCS will be supplemented by the Additional Child Care Subsidy (ACCS), in recognition that extra support is needed for some disadvantaged and vulnerable children and the significant benefits that quality child care and early learning can have on children’s early development. The ACCS will provide support for children at risk of abuse or neglect, families experiencing temporary financial hardship, grandparent carers on income support, parents seeking to return to work, low-income families and low income families utilising child care in high cost services.”
Under the streamlined subsidies, families earning $65,710 or less can receive subsidies of 85 per cent of the actual child care fee paid, families earning between $65,710 and $170,710 will receive a scaled amount of between 85 per cent and 50 per cent, and families earning between $170,710 and $250,000 will receive 50 per cent. Families earning between $250,000 and $340,000 will receive a scaled amount between 50 and 20 per cent. There will also be an annual cap of $10,000 per child for families earning above $185,710.
However, it is the ACCS that has caused the most controversy, as it will introduce an “activity test” for families who wish to claim more than 24 hours per fortnight of childcare. The “activity test” will include work, study, training and volunteering, with eight hours of activity allowing 36 hours of subsidized childcare, 16 hours with 72 hours of care and more than 48 hours with the maximum of 100 hours of care per fortnight. There are exemptions for grandparents on income support who are primary carers.
The Opposition has told the ABC News they will be pushing for a Senate inquiry into the new package, with early childhood spokeswoman Kate Ellis saying:
"Labor will today be ensuring that this package goes to a full Senate committee for examination as to the impacts on Australian families… This is a Government who is spending some $3 billion to make child care more expensive for tens of thousands of Australian families.
Labor won't be a doormat on these changes, early education is too important for children's development and too important for families.”
Parliament is scheduled to resume on February 2.
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Sources:
Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 (Cth) - available from TimeBase's LawOne service
Childcare payment overhaul a missed opportunity, industry says (Julie Doyle, ABC News, 02/12/2015)
