Six weeks into the new Child Care Subsidy changes and many families are still struggling to navigate the system. While many families are better off and this is an achievement to celebrate, there are a considerable number of families that are either worse off under the new system or do not understand how to use it. The Education Department estimates that 280,000 families will be worse off. It is to these families that extra attention and care must be given, not just in providing alternatives to the mainstream child care options but in coming alongside to help and support.
The New System
There is much to celebrate for many families. Those earning $66,958 or less receive a subsidy of 85% of their child fees (with a rate cap of $11.77 per hour). The annual cap has been removed for families earning $186,958 or less a year.
The families that are worse off under the system are so due to the new factors that determine eligibility and subsidy amount.
- Combined family income
- Fortnightly family activity level (work, train, study or volunteer)
- Fees charged by the child care service
The families that are set to struggle under this new system are those that don’t meet the activity test which is a necessity for the new subsidy – where one or both parents are not working.
Vulnerability In The New System
Families where one parent is not working or unable to work will have fewer hours of subsidised care under the new system as the rate of hours received is now based on the parent with the fewest number of working or active hours.
Another concern is for casual workers and shift workers. Workers are able to estimate their future hours for a three month period but this understandably is causing casual workers to be concerned about accessing the amount of hours that they may need at short notice, and the cost of child care if they are not awarded the subsidy in time.
In order to meet the activity requirement, both parents or guardians must be either working, looking for work, volunteering, studying, training or self-employed yet this does leave vulnerable subsections of our community exposed; New immigrants with language and cultural barriers, families with a sickly parent who is unable to commit to work and others.
Liam McNicholas from Northside Community Service in Canberra has weighed in saying, “One of the big concerns we always had with this package is that the people who would be the most affected by it were the ones who could least afford to be affected by it, the ones who are already vulnerable, who are already experiencing disadvantage,”
“And those families we know from research are the families and children who most benefit from early education.”
While the Government argues the new approach to accessing the childcare subsidy will encourage families and parents to enter and re-enter the workforce, Labor believes that early childhood education is a necessity for all children and that the new structure hurts the most vulnerable.
Under the old system, families that did not meet eligibility requirements and earned $66,000 or less were able to access 24 hours of subsidised care per week. Those families will now only be entitled to access 12, 50% less.
Childcare Centre Fee Hikes
Another element that families will need to navigate under the new system is the vulnerability to childcare fee hikes. The new system dictates that the subsidy will be set at a reasonable amount, for long day care this being $11.77 an hour. If a centre decides to charge more than this, parents or guardians will have to pay the extra cost.
While the Government stated that it will be naming and shaming providers that seek to ‘exploit’ the new system, there is little parents can do in rebuttal but pay the increasing cost gap.