Childcare benefit and rebate should be replaced by single payment: report

The childcare benefit and childcare rebate should be replaced by a single payment, a report commissioned by Early Childhood Australia has found.

There is currently a childcare rebate that is not means-tested, a childcare benefit that is means-tested, as well as other subsidies, and the report calls for sweeping changes.

Andrea Martin, who manages a childcare centre in Melbourne’s east, says anything would be better than the subsidy maze families now navigate.

“It is very confusing to parents,” she said.

“They really find it hard to understand that there’s two payments, and some parents never realise that there’s two payments.”

Deb Brennan of the Social Policy Research Centre at the University of New South Wales co-authored the report that recommends big changes.

“It is an extremely complicated system and very few people that I know in the field would be able to give a clear and accurate account of how childcare benefit works,” she said.

The report recommends replacing both the childcare benefit and the childcare rebate with one single early learning subsidy.

The Social Policy Research Centre says the single subsidy would also cover more childcare expenses, but Ms Brennan concedes it will cost Canberra more.

“We point out in our report that Australia is below the OECD (Organisation for Economic Co-operation and Development) average in what it’s investing in early childhood education and care, and I think that’s something we should be paying attention to,” she said.

Federal spending on the childcare benefit and rebate is more than $5 billion a year, and the Assistant Minister for Childcare, Sussan Ley, is clear that there will not be any more funding.

“Solving problems is not about adding more money, particularly not in the current budgetary climate,” she said.

“It’s about doing much better with the money that we have, and there’s a lot of it inside the sector at the moment.”

Ms Ley says she is sympathetic to concerns about the current system.

“Look there’s no doubt that the childcare benefit and rebate and the combination of how they apply to you in your family circumstances are confusing,” she said.

“We will always have an overriding message of simplification and removing red tape.”

The Productivity Commission is now considering submissions on childcare reform.

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Childcare benefit and rebate should be replaced by single payment: report
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