Just seven days left to switch to new child care system

Joint Media Release
  • Minister for Education and Training
  • Minister for Human Services
  • Minister Assisting the Prime Minister for Digital Transformation

Parents and carers have just one more week to sign up to the Turnbull Government’s new child care system, which will deliver more support for more families.

Minister for Education and Training Simon Birmingham said relief for families with the costs of child care was just around the corner starting 2 July.

“On average, eligible families will be $1,333 a year better off per child under the Turnbull Government’s reforms but families need to make the switch to the new system or they risk disrupting their payments,” Minister Birmingham said.

“We’re investing an extra $2.5 billion and overhauling the system by retargeting subsidies to families working the most and to families earning the least, abolishing the annual rebate cap for most families and introducing an hourly rate cap to put downward pressure on fee increases.

“Parents and carers need to log on to myGov or visit www.education.gov.au/childcare and update their details if they haven’t done so already.

“The clock is ticking, Australia.”

Minister for Human Services, Michael Keenan, said switching over was a simple process.

“We’ve seen almost 940 000 families already switch over to the new system or about 80.8 per cent, which is fantastic, but there are still some families that need to complete their online assessment,” Minister Keenan said.

“I know how busy many families can be and they might be leaving the switchover to the last minute, but there’s hundreds if not thousands of dollars on offer for families and nearly one million families are set to benefit.

“We’ve been using advertising, forums with families and child care services, direct letters and emails and text messages to ensure people understand they need to switch before 2 July or risk disrupting their payments.

“However, we expect there will be some families who won’t switch to the new system because their circumstances may have changed and they no longer need child care.”

Minister Birmingham said the Australian Government didn’t want to see low and middle income families miss out. If they don’t make the switch they may have to pay full fees.

“We want to see as many families as possible benefit from these important reforms,” Minister Birmingham said.

Key elements of the Turnbull Government’s reforms

  • We’re increasing Australia’s investment in early childhood education and care by $2.5 billion over the next four years so that almost one million Australian families benefit - Low and middle income families will be the greatest beneficiaries from the package.

  • An activity test will ensure that taxpayer’s support for child care is targeted to those who depend on it in order to work, or work additional hours. It is estimated our reforms will encourage more than 230,000 families to increase their involvement in workforce participation. The activity test includes a minimum of four hours of working, looking for work, training/studying and volunteering

  • Fundamentally fair – this package provides the highest rate of subsidy to those on the lowest income levels and more hours of subsidy to those who work the most. We’re increasing the base subsidy from around 72 per cent to 85 per cent for the more than 370,000 families earning around $66,958 or less a year.

  • Low and middle income families, earning up to around $186,958, will no longer be limited by an annual cap on the amount of child care they can access – that’s more than 85 per cent of families using child care. Families earning more than around $186,958 will also benefit from an increased annual rebate cap of $10,190. 

  • Introducing hourly rate caps recommended by the Productivity Commission to help put downward pressure on fee increases by setting a limit on what hourly fee the Government will subsidise based on an efficient price of what it costs to deliver child care

  • Our $1.2 billion Child Care Safety Net recognises vulnerable children and families need extra support. The safety net includes special funding for regional and Indigenous-focused centres to break down barriers to early learning and child care and 12 hours or around two sessions a week of guaranteed access to care/learning for families earning less than around $66,958 even if they don’t meet the activity test.

Examples of how families are set to benefit:

  • A family on $50,000 - both parent/s working, with two children aged under 6 in long day care two days a week at $100 a day will be around $2,000 better off a year

  • A family on $80,000 - both parent/s working, with two children aged under 6 in long day care three days a week at $100 a day will be over $3,000 better off a year

  • A family on $150,000 – both parent/s working, with two children aged 6 and under in long day care three days a week at $100 a day will be more than $1000 better off a year

For more information

Media Contact: media@education.gov.au
Non-media queries: 1300 566 046