Childcare review: Families consider impact of proposed changes put forward by productivity commission

Finding child care that is not only affordable but also available can feel like winning the lottery for new parents.

New mothers wanting to return to work are often constrained by a childcare system that is expensive, often inflexible and frequently inaccessible.

A productivity commission report released last week recommended a range of measures to help parents pay for child care, including a single means-tested payment paid directly to the provider, and for the first time, subsidies for nannies.

So, will it work? Who will be the winners and losers?

Emily Trimble has been a firefighter since 2007 and is also married to a firefighter.

With three children under five and her maternity leave coming to an end, they are looking at childcare options and are struggling to find something they can afford.

“I think we worked out [it would take] two-thirds of my wage, but that wouldn’t even cover all the care we need,” Ms Trimble told 7.30.

“First of all there’s no night care, we can’t drop them off on the way to night shift and secondly there’s no weekend care.”

Ms Trimble and her husband will be paying close attention to the government’s response to the productivity commission report, with a wider families package expected to be announced in the coming months.

“McKenzie’s six months old, [it’s] another five or six years before we would be earning money off my wage rather than handing [it] straight over to the childcare giver,” she said.

“It’s hard to get ahead when you’re going backwards to begin with.”

Low-income earners to benefit from single, means-tested plan

The first recommendation of the commission was to combine the current system of three main childcare payments, including the non-means-tested childcare rebate, into one single means-tested payment.

The amount would be calculated per child, on a sliding scale with families on a combined income of $60,000 receiving 85 per cent of average childcare fees.

Families on $250,000 or more would receive 20 per cent.

Chief executive of the Grattan Institute, John Daley, said this consolidation was largely welcomed as reducing middle class welfare.

“Essentially families with a combined family income of less than $140,000 will in general be better off,” he said.

“Families with a combined income of more than $140,000 will in general be less well off.”

Charu Gupta is one of the likely winners under the recommended means-tested model.

Ms Gupta and her husband have a combined income of $110,000.

They both work full-time and have a son in child care.

“It’s about one-fourth of my income just going to child care,” Ms Gupta said.

“It’s the second largest expenditure that we have after our home instalment.”

She said any financial relief would be welcome.

“There is always something coming up, you know, unexpected and all of a sudden you can get a bit more space there, if you can use it for something else, definitely it’s going to be helpful,” Ms Gupta said.

Another recommendation stipulated in the report suggested accredited nannies be eligible for a government subsidy to help improve flexibility.

Vice-president of the Australian Nanny Association, Annemarie Sansom, supported the move.

She said it reflected the increasing need for out-of-hours child care in low to middle income families.

In the last 20 years, the nanny industry has changed from catering for corporate executives who could afford to have a nanny to new parents who are trying to meet their financial needs with their work commitments and paying their mortgages.

“People who are shift workers, commuting and also not able to put their child into a child care centre and get home in time to pick them up [use nannies],” Ms Sansom said.

Extra government funding needed to offset new regulation costs

Childcare fees are set to rise next year when new government regulations requiring more childcare staff come into effect.

The productivity commission was asked to find solutions with the current funding allocation for child care.

But the childcare sector has warned that without extra government payments, child care affordability and availability will still be problematic.

Secretary of the Australian Childcare Alliance, Paul Mondo, said ultimately more money was needed to increase the accessibility of childcare.

“Unless we find a way to inject significant extra funds into the sector to find a way for government funding to catch up to the regulatory changes, the issue of affordability will continue to be an issue for an indefinite period,” he said.

Families Minister Scott Morrison will examine the Productivity Commission’s report as part of a wider families package to be announced in the coming months.

Source Article from https://au.prime7.yahoo.com/region/news/a/-/local/26434059/childcare-review-families-consider-impact-of-proposed-changes-put-forward-by-productivity-commission/
Childcare review: Families consider impact of proposed changes put forward by productivity commission
https://au.prime7.yahoo.com/region/news/a/-/local/26434059/childcare-review-families-consider-impact-of-proposed-changes-put-forward-by-productivity-commission/
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