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Thought you were about to get affordable childcare?

Think again

It’s the bane of any working woman’s life: the cost of childcare.

And then, last week, the government announced a proposed package that could significantly cut costs for many families.

But this week?

It’s not looking likely.

Today, Nick Xenophon announced he would block the government’s childcare and welfare omnibus bill – and without the support of his three votes, it is unlikely to pass.

His opposition comes after the government pressured the crossbench to support the bill, saying that the National Disability Insurance Scheme would be given $3 billion if the bill passed.

“As a negotiating tactic, this is as subtle as a sledgehammer,” Senator Xenophon said, according to the ABC.

What does this mean for you?

Paid parental leave

The government has been trying to cut “double dippers” for some time now, and the new “omnibus bill” once again proposes that women who receive maternity leave from their employer will not receive the full government benefit, too.

However, women who don’t receive a benefit from their workplace will now be eligible for 20 weeks paid maternity leave, up from the current 18. Of the 170,000 new parents who access this scheme yearly, 68,000 will have their payments reduced and 4000 will miss out completely.

Child care benefits

Currently, the government provides two payments for families with children in approved care – the Child Care Benefit, which is means-tested, and the Child Care Rebate, which is not. Right now, the Rebate is capped at $7500 a year. These payments will both be scrapped in favour of a new benefit, the Child Care Subsidy (CCS), which will be means-tested. Parents must be working, studying, training or volunteering to access the benefits.

The CCS will increase the coverage of child care costs for families. Here’s how it will affect you:

  • Families earning less than $65,000 will have up to 85 per cent of their child care costs covered.
  • Families earning between $65,000 and $170,000 will have 50-85 per cent of their child care costs covered.
  • Families earning between $170,000 and $250,000 will have 50 per cent of their child care costs covered.
  • Families earning between $250,000 and $340,000 will have 20-50 per cent of their child care costs covered.

This means that, for a single mum on $60,000, child care will cost around $15 a day (based on an average child care cost of $100 a day). For a couple who earn $80,000 combined, child care would cost around $30 daily, and for a couple on $150,000, out-of-pocket expenses would be about $50 per day.

The current cap on the benefits will also be scrapped for families who earn less than $185,000. For families who earn more than this, the cap will be increased from $7500 to $10,000.

Family tax benefits

While the government had initially proposed to scrap Family Tax Benefit B once a family’s youngest child turns 13, they’ve since backed down on those plans and now, the Family Tax Benefit A will be paid fortnightly – with a $20 boost per child – instead of annually. This will mean families receiving the FTB-A will be $500 better off annually.

Will it pass?

That’s the million-dollar question. The government says their paid parental scheme won’t come into effect for at least nine months after the legislation passes (to ensure currently pregnant women wouldn’t be affected), which may make it more attractive to senators. Still, with the Greens and Labor opposing the changes, the Coalition will need at least 10 crossbenchers to support the bill.

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