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New Legislation Introduced to Reduce Cost of Childcare

Updated: Jan 18

In September of 2022 the Albanese Government introduced legislation to increase the Child Care Subsidy (CCS) towards reducing the cost of childcare for "about 1.26 million families." The legislation forms part of a $5 Billion package which will take effect in July of 2023.

A classroom with 6 young children sitting on a coloured floor, with the text "Childcare Legislation" foregrounded.

According to the Department of Education, the Government intends to:

  • lift the maximum CCS rate to 90% for families earning $80,000 or less

  • increase CCS rates for around 96% of families with a child currently in care earning under $530,000

  • keep higher CCS rates for families with two or more children aged 5 years or under in care.

It is expected that as a result of these reforms, a family on a median combined income of $120,000 with a single child in early childhood education will save nearly $1800 over the course of the first year its implementation.

In a media release provided by the Minister for Education, Jason Clare, and the Minister for Early Childhood Education and Youth, Dr. Anne Aly, they note that childcare costs in Australia have risen by 41% over the past 8 years and that currently 60% of mothers with young children are working part time hours:

One of the most important commitments the Government made at the election was to cut the cost of child care. This legislation implements that commitment. 96 per cent of families with children in early childhood education and care will benefit from this reform, and no Australian family will be worse off. Making child care cheaper will help ease the cost-of-living pressure on a lot of families and give parents the opportunity to work more and earn more if they want to. A lot of Australians want to work more, but if they do a lot of that pay is gobbled up by child care costs. It means it’s not worth it.

The Australian Treasury estimates that these reforms to the CCS will result in 37,000 additional full time employees to the economy in 2023 to 2024.

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