Childcare rebate vital to working parents

Parents rely on government assistance to afford childcare
Parents rely on government assistance to afford childcare Photo: Getty Images

Childcare has become so expensive most Australian families could not afford it if they didn’t receive the Federal Government’s Childcare Rebate, a national survey has found.

According to The Parenthood poll, three in four working parents would either quit their job or reduce the number of hours they work if the Childcare Rebate was cut or means tested. On the flipside, half the working parents surveyed said they would increase their work hours if the rebate was increased.

The financial viability of working and paying for childcare is particularly tight in big cities where the cost of childcare is highest.

“Comments we received from parents made it clear that in the inner suburbs of Sydney in places like Leichhardt and Bondi Junction, parents are paying astronomical child care fees – up to $170 a day,’’ Executive Director of The Parenthood Fiona Sugden said.

“It was in these places that most parents reported they were reaching the $7500 cap for fee reimbursement each year and therefore paying huge chunks of their incomes in child care fees – particularly when they had more than one child.  We had many parents report from these areas that it was actually costing them money to go to work.”

The Childcare Rebate is not means tested and covers 50 percent of a family’s out-of-pocket childcare costs when parents are either employed, studying, or actively looking for work. It is capped at $7,500 per child per year.

The Parenthood has presented findings from their survey of more than 1000 parents across the country to the Productivity Commission  into childcare.

“Our submission makes it clear a reduction or cut to the rebate would spell disaster for workplace productivity in Australia,’’ Ms Sugden said.

“Another key recommendation from us to the inquiry is to retain the National Quality Framework for early learning. We make this recommendation after the majority of parents surveyed identified ‘quality of care’ and ‘highly qualified educators’ as the two most important issues for them when choosing childcare.”


The Parenthood survey also showed 80 percent of survey respondents would support the introduction of a funded public childcare system, similar to the public school system.

“Children learn an incredible amount in their first five years, yet Australia only provides public education from the age of four or five. Results show parents are keen to see this education gap addressed,” Ms Sugden said.

The Federal  Government has asked the Productivity Commission to investigate future options for childcare, with a focus on supporting workforce participation and addressing children's learning and development needs.

Peak body Early Childhood Australia has told the commission the funding system should be streamlined by combining the current means-tested Childcare Benefit with the non-means tested Childcare Rebate

The ECA proposal would see one streamlined subsidy that would cover up to 90 per cent of childcare fees for low income earners, tapering down to 50 per cent for families earning over $150 000 per year.

The Commission is due to release a draft report in July and provide its final recommendations to the federal government in October.