Preschoolers win exemption under new childcare subsidy

Verushka Taylor with her son Albie and daughter Frida.
Verushka Taylor with her son Albie and daughter Frida.  Photo: Steven Siewert

Childcare is important to Albie Nesbitt, and not only because it's a chance to play chasing games with his mates. The long daycare centre's preschool program teaches the four-year-old skills he will need to cope with kindergarten.

Many parents, Albie's mother among them, had been worried that cuts and changes to childcare subsidies due to a focus on parents' work activity would force them to withdraw their children from preschool programs at a crucial time.

But the federal government has moved to reassure parents, saying all children doing preschool programs in long day care the year before they start school will be subsidised for 18 hours a week, regardless of whether their parents work or not.

"This exemption clearly outlines the Turnbull government’s commitment to ensuring Australian children get a strong start in the early years," Education Minister Simon Birmingham told Fairfax Media.

“In many cases preschool education is delivered in childcare centres so this $30 million exemption will help more than 30,000 families in Australia with their child’s early learning opportunities."

The chief executive of the Early Learning and Care Council of Australia, Elizabeth Death, called on the government to go further.

"This is a very positive move by the Australian government," she said. "We would encourage it to be for three-year-olds for two years of early learning as well, which is internationally demonstrated as the best start for children."

Claiming the preschool rebate will be a complex process within a complex system. Parents are notified if they are eligible, and then have to let the daycare centre know. The centre must confirm the child's involvement in the preschool program fortnightly.

Only then is entitlement confirmed. If parents are paying fees two weeks in advance, they will have to claim the subsidy back. The exemption only relates to the activity test. Households that earn more than $350,000 will still have to pay full fees.


Albie's mother, Verushka Taylor, thought she had been allocated 15 hours of subsidised care, and was pleasantly surprised when she learned the preschool exemption meant she would be able to claim back another three hours.

The single mother did try moving Albie to a cheaper, community preschool this year, but her son found the experience too traumatic.

"It was a lot of change all at once for him, he didn't cope with it very well, and he will have another change next year when he goes to school," Ms Taylor said. "He was already settled into a place that has a preschool program, and all his friends were there."

Senator Birmingham encouraged families to sign up to the new system as soon as possible as it begins on Monday.