Under new childcare changes, average families can save $1,300

The government’s childcare reforms kick in on July 2, but hundreds of thousands of families still need to switch to the new system.

Kids at Day care

Source: Creative Commons Attribution 2.0 Generic license.

A family accessing the average 28.5 hours of childcare per week could save about $1,300 per year under a new subsidies system that begins in July, according to Turnbull government modelling.

812,000 families have already switched over to the new system ahead of the July 2 deadline - but 350,000 are yet to do so, risking missing out on payments.


"While many families are set to be hundreds if not thousands of dollars a year better off, transitioning to the new system isn't automatic, and families need to make the switch to the new system through myGov,” Education Minister Simon Birmingham said.
Amanda Rishworth is Shadow Minister for Early Childhood Education and Development, shared her concern about the upcoming changes. She was speaking with Sky News and said, "With only one month to go it is dawning on families and dawning on Centres that 1 in 4 families around the country is going to be worse off."


She said there are some questions need to be addressed before the new child care changes.

What is the new system?


The government is cancelling existing payments like the Child Care Benefit and the Child Care Rebate, merging them into a single means-tested subsidy.

The old payments will stop as soon as they are replaced with the new subsidy, although the government has indicated there will be some back-payments for those who miss the deadline.

Families on the lowest incomes will receive the highest level of subsidy, with 85 per cent of their childcare costs covered, while families in the most top income bracket will have just 20 per cent subsidised.


The government will also assess how many hours a fortnight couples spend working, studying, interning, searching for a job or volunteering.
The new childcare subsidy includes an activity test
Source: SBS NEWS -Australian Government
The more hours you do, the more hours of childcare the government will pay for – but the rate is calculated on whichever partner does less.

If one parent does less than eight hours of “activity”, the family is ineligible.

But families that earn a combined income of less than $67,000 will still get access to a baseline allowance of 24 hours of paid care.


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2 min read
Published 11 June 2018 1:50pm
Updated 12 August 2022 3:43pm
By James Elton-Pym, Harita Mehta
Source: SBS News


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