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Childcare Is About To Become Cheaper What Will It Mean For Families
The Child Care Subsidy (CCS) is changing from 10 July 2023, meaning most Australian families who access childcare will receive more money and some previously ineligible families may be more likely to qualify for payments.
The 10 July changes to CCS (in a nutshell)
The maximum amount of CCS will increase from 85% to 90%
Families earning $80,000 or less will receive a CCS rate of 90%
Families earning more than $80,000 receive a CCS rate that tapers down by 1% for each $5000 of family income. This rate reaches 0% for families that earn $530,000 (up from $356,756)
Families with more than one child aged five or under, still in care, can receive a higher CCS rate for their second and subsequent children
Aboriginal and Torres Strait Islander children will also benefit. The CCS changes will give families access to at least 36 hours of subsidy per fortnight, for each child who attends childcare.
Family income | Current CCS – one kid | 10 July subsidy | New CSS – one kid | New CSS – two kids | Better off p/w – one kid | Better off p/w –two kids |
|---|---|---|---|---|---|---|
$80K | 85% | 90% | $60 p/w | $90 p/w | $30 | $60 |
$90K | 82% | 88% | $72 p/w | $108 p/w | $36 | $66 |
$100K | 79% | 86% | $84 p/w | $126 p/w | $42 | $72 |
$120K | 73% | 82% | $108 p/w | $138 p/w | $54 | $84 |
$150K | 64% | 76% | $186 p/w | $216 p/w | $72 | $102 |
What are the benefits to non-parent taxpayers?
Although many non-parent taxpayers may feel cheated by the idea of funding other parents, the subsidies do have a bigger goal that benefit all Australians.
By increasing female participation and productivity in the workforce, the gender earnings gap can be reduced.
Economic experts estimate that, if female workforce participation did match that of males, GDP could be lifted by as much as 8.7%, or $353 billion by 2050, so the boost to the Australian economy could be significant.
The bottom line
For families with both parents working, or single parent households relying on working income, spending as much as $200 per day per child (with Melbourne families paying some of the highest childcare fees in the nation) puts many families out-of-pocket each week. But paying $1000 or more a week to have children looked after is seen by many as a necessary expense – especially when measured against the potential long-term benefits of remaining relevant in the workplace, and boosting superannuation savings for retirement.
With some people receiving 90% of childcare fees subsidised under the changes, and an inquiry into making childcare even more affordable for working families, some in the sector believe universal free childcare may be the next move.
Go deeper: It’s long overdue but cheaper childcare could be coming
Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
