Childcare savings: Many families will save $2000 a year with new childcare subsidy

Some 250,000 families with children in childcare will save $2000 a year under new changes to fees introduced by the Morrison Government.

As of Monday, March 7, out-of-pocket child care costs will ease significantly for families with multiple children aged five or under.

Acting Minister for Education and Youth, Stuart Robert, said the Morrison Government had lifted the rate of Child Care Subsidy (CCS) by 30 percentage points for the second child aged five or under and any younger children in child care, up to a maximum rate of 95 per cent.

“These measures will ease the cost of childcare for about 250,000 families across Australia who on average will be $2260 a year better off. That means more money in their pocket each week,” Mr Robert said in a joint statement with Government Services Minister Linda Reynolds and Minister for Women’s Economic Security Jane Hume.

“For a family who are charged a typical fee and earn $120,000 a year with two children in child care for five days per week, the saving will be $144 per week compared to current settings.”

The higher subsidy will boost support for working families and follows the removal of the annual CCS cap of $10,655 for families earning over $190,015 (in 2021-22 terms) from 10 December 2021 – and beyond.

The Government introduced the CCS in 2018 as a means-tested subsidy to ensure those who earn the least receive the highest level of subsidy.

“The increase will make the CCS work even harder for low and middle-income families with more than one child in care, bringing their child care costs down significantly,” Minister Robert said.

Minister for Government Services, Senator Linda Reynolds said the increase in CCS had been brought forward by the Government by four months to maximise savings for eligible families.

“We worked hard through Services Australia to bring forward the increased subsidy from 1 July 2022 to today, to ensure families can benefit as soon as possible,” Minister Reynolds said.

Importantly, the additional funds will automatically flow to eligible families without the need to apply to Services Australia for the increased subsidy.

Minister Robert said the Morrison Government is committed to ensuring families can continue to access high quality, affordable early childhood education and care, and supporting opportunities for more parents to engage in work, training and study.

“The average hourly out-of-pocket costs for children using Centre Based Day Care are 18 per cent lower than in 2018; at $4 an hour in March 2021, down from $4.87 in June 2018,” Minister Robert said.

“Families keen to know their benefits under the increased CCS can go to the new www.startingblocks.gov.au website and use the simple family estimator.”