More affordable child care and boosting workforce participation.
Families in the New England will reap the benefits from an additional $1.7 billion
investment in child care as part of the 2021-22 Budget.
Member for New England, Barnaby Joyce said the changes, which deliberately target
low and middle income earners, will cut the cost of child care and lower the disincentive
to take on an additional day or two of work for many families.
For example, a single parent in Tamworth on $65,500 with two children in four days of
long day care who chooses to work a fifth day will be $71 a week better off.
Under the current arrangements the maximum child care subsidy a family can receive is
85 per cent and the level is tapered so that those families that earn the least receive the
These subsidies apply at the same rate per child, no matter how many children a family
may have in child care. As a result, for families with more than one child in care this
means that their child care costs double when they have a second child.
Additionally, families with combined incomes above $189,390 face a child care subsidy
cap of $10,560 per child per year.
As a result, these families start paying full fees towards the end of the year which
reduces their incentive to participate in the workforce.
As part of the 2021-22 Budget, and starting on 1 July 2022 the Government will:
• Increase the child care subsidies available to families with more than one child
aged five and under in child care. Around 950 families in the New England are
in this position.
• Remove the $10,560 cap on the Child Care Subsidy, benefitting around 18,000
For those families with more than one child in child care, the level of subsidy received
will increase by 30 percent to a maximum subsidy of 95 per cent of fees paid for their
second and subsequent children.
Half of Australian families will now receive a 95 per cent subsidy for their second and
For example, a family in Armidale earning $110,000 a year will have the subsidy for their
second child increase from 72 to 95 per cent, and would be $95 per week better off for
four days of care.
A family with three children on $80,000 would have the subsidy increase from 82 to 95
per cent for their second and third child and be $108 per week better off for four days of
Mr Joyce said the changes would have benefits for both the economy and families in his
“The is going to give greater choice to local parents who want to work an extra day or
two a week,” Mr Joyce said.
“This is a targeted investment that makes child care more affordable, increases
workforce participation and boosts the economy.”
Minister for Education and Youth Alan Tudge said the measures would further ease the
cost of child care and encourage workforce participation, particularly for larger families.
“Our child care system provides the most support to those who need it most,” Minister
“These measures will help remove the barriers for parents, particularly mothers, to return
to the workforce or to increase their hours, as their family grows.”
The measures build on the Morrison Government’s 2018 Child Care Package which has
kept out-of-pocket child care costs low for Australian families.
Minister Payne said it would mean there is greater choice for Australian women and men
as they balance their family and work responsibilities.
“For women in particular, it opens the door for those choosing to work or to work more,
which is critical to their own economic security and a prosperous Australian economy,”
“Increasing the Child Care Subsidy is an important measure that will help reduce the
disincentives for women to participate in the workforce to the full extent they choose.”