What Changes To Childcare Subsidies Mean For Your Family

Almost half a million Australian families are at risk of missing out on new childcare subsidies unless they make some changes online.

What you need to know
  • The Turnbull government is introducing a new Childcare Subsidy that will replace two current childcare payments
  • About 700,000 familes have signed up to the new system that will be rolled out on July 2
  • In order to receive the new funding, families are required to update their Centrelink account details via the myGov website

Almost half a million Australian families are at risk of missing out on new childcare subsidies unless they make some changes online.

Education Minister Simon Birmingham visited a childcare centre in Canberra on Wednesday reminding families they have a month left to update their Centrelink account details before existing subsidies are rolled into a single means and activity-tested payment on July 2.

"We know that many many families are time-poor, but this is about giving them the support they need and deserve to pay their childcare bills," he said, alongside Minister for Human Services Michael Keenan.

Source: AAP

"And it's worth the ten minutes or so it might take to update your details, because ultimately you'll be hundreds or possibly thousands of dollars a year better off.

“More support for families is just weeks away but the switch over to the new system isn’t automatic.

“If you don’t make the switch by July 2, you could miss out.”

What do the changes mean for your family?

The Turnbull government is investing an extra $2.5 billion over the next four years to roll out a new Child Care Subsidy that will replace two current childcare payments from July 2.

“Our reforms include an extra $2.5 billion investment that will mean more subsidies for families working the most and for families working the least, scrapping the annual rebate cap for most families as well as an hourly fee cap to keep downward pressure on fee increases,” Birmingham said.

He said  230,000 families would increase their workforce participation.

Under the new system, both parents must be working, studying, volunteering or searching for a work at least eight hours a fortnight to be eligible for the subsidies.

“More support for families is just weeks away but the switch over to the new system isn’t automatic.'

Families with annual incomes under $186,958 will no longer face a cap on the amount of fee rebate the government will pay each year.

The annual cap will lift from $7500 to just over $10,000 for those on higher incomes.

According to calculations from the government, a family on $50,000 with two working parents and two children aged under six in childcare two days a week at $100 a day will save about $2000 each year.

A similar family on $80,000 with their children in long day care three days a week will be over $3000 better off over each year.

Under the changes, Labor claims one in four families will be worse off, with the majority of those missing out falling under the lowest two-income brackets.

What do I need to do?

In order to receive the new funding, families are required to update their Centrelink account details via the myGov website.

Required information includes an estimated income for 2018/19 and approximate working hours for both parents.

While 700,000 families have hopped online, about another 462,000 still need to make the switch to ensure there is no disruption to their payments.

"I'm very pleased and grateful that 700,000 families have already made the switch, and that's still with a month to go," Birmingham said.

"Our message is, to the remaining families, to make the switch as well."

SOURCE: Getty Images

The education minister said although transition arrangements were in place to ensure families who failed to meet the July 2 deadline didn’t miss out, he urged them to "get the job done" beforehand.

Labor’s early childhood education spokeswoman Amanda Rishworth said not enough had been done to alert families.

“It is (the government’s) responsibility. There is a lot more they could have done,” Ms Rishworth said.

“They could have worked with centres who are at the coalface. They have done that. Instead, they’ve done a slick advertising campaign on TV and nothing else.”

With AAP.