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What the proposed childcare changes mean for you

With around three million families with children under 17 in Australia, it’s no surprise that childcare has become a hot topic this election.

Affordable and available childcare is absolutely critical for most families with young children, whether they are two-parent families needing more than one income just to get by, single-parents who are their family’s only breadwinner, or mothers simply wanting to get back to their jobs and careers.

So there are a lot of potential votes to be lost this election if one of the main political parties gets their childcare policy wrong.

Both the Coalition Government and the Labor Opposition are trying to woo working parents with promises of changes to the existing system, which are mostly focused on helping parents with the cost of childcare.

The Government announced its changes back in May when it delivered the federal budget.

It promised to simplify the childcare support system by combining two types of payments into one, and then meeting up to 85 per cent of childcare fees with no overall cap for families earning less than $65,000 a year. There will however be a cap on the hourly rate, meaning the 85 per cent rebate will be paid only on fees up to $11.55 an hour.

Families earning more than $170,000 would receive 50 per cent of their fees, but only up to a total of $10,000 for each child each year. Very high income families would get even less.

The other big change promised by the Government is the introduction of a work test, which requires the recipient of the child care fee assistance to be doing at least eight hours of work, training or study a fortnight.

The catch is the Government claims it can’t afford to start this new scheme until mid-2018, because the Opposition won’t support other cuts to family payments that would “pay” for the childcare support increase.

Labor has seized on this delay, promising voters last week that its improvements to the childcare system will start in January next year – a full 18 months earlier.

The Opposition’s childcare assistance package includes keeping the two-payment system, increasing the childcare benefit for low and middle-income families by 15 per cent, or around $30 a week for each child, and increasing the cap from $7500 to $10,000.

These payments will be available for all working families, whether they have low incomes or not.

Both childcare packages will cost the taxpayer around about the same amount overall, but Labor has not yet explained whether it will make cuts to other government spending to pay for the childcare handouts.

The Government says its new childcare scheme is fully paid for, but by cuts to family tax benefits, which Labor has sworn to oppose.

Both parties will also scrap the baby bonus.

The child care sector has welcomed the two parties’ funding proposals, noting the Government plans to simplify the system as well as increase support, while Labor has left the system as it is, preferring to increase child care payments and introduce the increase earlier.

What child care providers are not saying is whether they will increase fees once working parents have more government money at their disposal.

The Government claims its cap on subsidies for hourly rates will help keep fees down. Labor thinks publishing fees on a website will have a similar effect.

Only time will tell whether the Coalition, Labor or the childcare providers can be trusted to keep their word.

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