Working parents will get child care for as little as $ 6 a day for a second child as part of a major budget review designed to encourage mothers to re-enter the workforce.

Treasurer Josh Frydenberg will announce the changes to cover up to 95 percent of child care costs for the second and subsequent children aged five and under on Sunday.

The changes will allow thousands of working families to be better off, in some cases, with a financial windfall of several thousand dollars a year.

For richer, higher-income families, the government will also abolish the $ 10,000 cap on child care expense reimbursements, meaning parents will no longer have to pay the full cost towards the end of the year. the year after they reach the maximum allowable reimbursement.

Eligible families could pay as little as $ 6 per day for child care

For families who pay an average of $ 120 per day in child care costs, the changes mean that some families will pay as little as $ 6 per day or less for a second child when child care costs are covered by the new reimbursement.

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Labor had promised a 90 percent discount

The major budget announcement also means that the Morrison government has now matched one of Labor leader Anthony Albanese’s biggest pre-election political announcements to cover up to 90% of childcare costs for eligible families with Discount 95 percent off.

Currently, child care subsidies of up to 85% apply at the same rate per child regardless of how many children a family may have in child care, which means the fee child care doubled with every second and subsequent children.

Depending on the changes that will be announced, that percentage will increase to 95%. 100 for low-income families.

“These changes strengthen our economy and at the same time provide more choice for parents who want to work an extra day or two a week,” said Treasurer Josh Frydenberg.

“This is a targeted and proportionate investment that simultaneously makes child care more affordable, increases labor market participation and boosts the Australian economy by up to $ 1.5 billion per year. “

Half of all families eligible for a 95% rebate

About half of Australian families will qualify for a 95% subsidy for their second and subsequent children.

The new discount will only apply to children under 5 years old

The most generous discount will only apply to children 5 and under.

This means that the changes will not provide cheaper care for some older children who attend preschool and will not reduce the costs of after-school care.

But it will reduce costs for babies and toddlers in day care when you have more than one child.

It follows a nationwide debate on women’s rights in the workplace and the impact of violence and sexual violence sparked by former liberal employee Brittany Higgins’ account of alleged rape in Parliament.

Changes announced by the Morrison government suggest the Prime Minister has dug deep to stop a slide in the polls, with investment in child care alone amounting to $ 1.7 billion in Budget 2021- 2022.

How will you be better

According to the changes, if a single parent with $ 65,500 with two children in four days of long day care, chooses to work on a fifth day, they will earn $ 71 per week over the current system.

A family earning $ 110,000 a year will see the subsidy for their second child go from 72% to 95%. 100 and would earn $ 95 per week for four days of care.

A family with three children with $ 80,000 would benefit from an increase in the subsidy from 82 to 95% for their second and third child and from $ 108 per week more advantageous for four days.


High-income families also earn

Changes will also be made to high-income families with a combined income over $ 189,390.

These families currently face a child care subsidy cap of $ 10,560 per child per year.

This means that after receiving more than $ 10,000 a year in child care reimbursement, they start paying the full cost towards the end of the year.

This cap will be removed under the changes.

Changes designed to help women re-enter the workforce

Women’s Minister Marise Payne said the changes were aimed at providing more choice for Australian women and men while balancing their family and work responsibilities.

“For women in particular, this opens the door for those who choose to work or work more, which is essential to their own economic security and a thriving Australian economy,” she said.

“The increase in the child care subsidy is an important measure that will help reduce the disincentives for women to participate in the workforce to the extent of their choosing.”

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