The Australian Government's new child care investment

Helping families by making child care more affordable, accessible and flexible

  • Key elements of the Government’s new child care system include the new Child Care Subsidy and the $1.2 billion Child Care Safety Net. The Child Care Subsidy will replace the current Child Care Benefit and the Child Care Rebate with a single, means tested payment. The Child Care Subsidy will commence in July 2018 and provide more access to subsidised child care to the families who work the most hours, and higher levels of financial support to the families who earn the least.
  • The reforms mean that families earning around $65,000 (in 2017 terms) or less will receive the maximum subsidy rate of 85 per cent of the actual fee charged, or of the relevant hourly rate cap (whichever is lower). A family earning $60,000, whose child care centre charges $100 per day, will only pay around $15 per day for child care.
  • The Government will abolish the Child Care Rebate cap of $7,500 per child for families earning around $185,000 or less. Families earning more than around $185,000 will benefit from an increased annual cap of $10,000 per year per child.
  • The Child Care Subsidy hourly rate caps, which are the maximum hourly rate the Government will subsidise for each service type are designed to place downward pressure on child care fees and arrest incessant fee increases. 
  • The Child Care Safety Net will provide targeted assistance for disadvantaged communities and vulnerable children and their families to address barriers in accessing child care. Some elements of this program commenced in July 2016.
  • The Government recognises that children from disadvantaged backgrounds benefit most from quality early childhood education and care. This is why, for example, under the Child Care Safety Net, families earning around $65,000 or less (in 2017 terms) who do not meet the activity test will have access to 24 hours of subsidised early learning per fortnight. That is equivalent to two weekly six-hour sessions, and will be subsidised at the rate of 85 per cent. 
  • A new information technology system will provide a simple and easy user interface for families and child care services; simplify, streamline and automate administration of child care payments and programs; and ensure more effective compliance and minimise fraudulent misuse of taxpayer funds.
  • The Government is providing support to services in regional and remote areas, recognising that they require assistance to transition from grant funded programs to the new child care system.

Clare, Peter, Flynn and Grace

  • Peter and Clare have two children – Flynn (aged one) and Grace (aged four). Peter works full-time and Clare works part-time and together they have a family income of $80,000. Flynn and Grace both attend long day care three days per week ($100 per day per child) while Clare is at work.
  • Under the new child care system, Peter and Clare will be around $3,400 better off a year.

Carol, James and Abby

  • Carol is a single mum with two year old twins, James and Abby. Carol works three days per week and James and Abby attend long day care on these days ($100 per day per child). Carol earns $50,000 per year.
  • Under the new child care system, Carol will be around $3,100 better off a year.