Working out the cost of childcare can be tricky. Do you qualify for a subsidy and how much will you get?
The starting point for your decision-making process is working out what childcare option will suit your family best.
The pros and cons of working vs stay-at-home parenting have to be evaluated. Personal budgets need to be calculated. Families need to decide what type of childcare and early education they want - be it a nanny, an au pair, daycare or an after-school facility, plus the different rates between various childcare centres also have to be taken into consideration. And of course, Covid-19 is also in the mix which adds another dimension to working out the cost of childcare.
Let’s look first at what assistance the Government provides.
The Child Care Package includes the Child Care Subsidy (CCS) which is paid directly to the childcare service providers as well as the Child Care Safety Net. It is a fairly complex scheme and can be a bit tricky to navigate.
Under the scheme, the level of Government support depends on a number of criteria, namely how much work-related activity a person or couple does on a fortnightly basis, their total combined family income and the type of care being used.
As a rule of thumb, the Government covers around 60% of the cost of childcare with parents paying the remainder. The cost of childcare is around $10 an hour, with about 70% of families paying around $5 or less an hour.
Under the scheme which was introduced in 2018, there are no more annual caps for low and middle income families. These were replaced with caps on the amount that a family receives per hour of care, with the maximum dependent upon the child's age and the type of care they're in.
If your family’s combined income is $189 390 or less, you won’t have an annual cap on your subsidy. If your family earns between $189 390 and $353 680, your childcare fees will be subsidised to the annual cap of $10 560 per child each financial year.
Let’s take an example of a couple who both earn the average salary of $85 000 and whose child attends care five days a week. They will have an annual fee gap of $5,782 which this translates into a weekly out-of-pocket expense of $111.19 per week.
At the moment, concessions are being made for Australian families whose employment has been affected by COVID-19. The activity test has been eased until 4 April 2021 with affected families able to access to up to 100 hours of subsidised child care, per child, per fortnight.
Another option for childcare is to hire a nanny or au pair.
Typically, a nanny will cost between $20 to $30 an hour (depending on their level of experience and the job description) plus any additional expenses such as insurance and superannuation. If you go this route, you would also need to factor in the cost of benefits such as holiday and sick leave.
The regulatory requirements vary between the states, so you would need to make sure that you tick all the tax and contractual compliance boxes.
The cost of an au pair depends on the type of duties they’re required to undertake and the number of hours they’re required to work. An au pair lives with the host family (with full board and pocket money) in exchange for childcare and light housework and is paid ‘pocket money’ each week. This can set you back anything from a minimum of $200 per week (for someone doing a very basic role working no more than 30 hours) up to $450 a week for what leading Australian au pair agency, Smart Aupairs calls a ‘Diamond Au Pair’.
And then of course, there’s the very simple babysitting option for child-minding. The amount you pay depends on the minimum wage (which in Australia is currently $19.84 per hour with a lower wage for an employee under 21) as well as contributing factors such as their experience, skills (eg nursing or teaching) and any extra responsibilities or requirements (special needs children etc).
As you know, there are many different options for childcare and they all come at a cost. But perhaps it’s as important to talk about the cost of NOT enrolling a child into childcare.
We know that the early years are the most critical time for a child’s brain development, and quality early education is one of the most important investments that parents can make in their child’s future. Researchers have found that a child can be up to eight months ahead in learning if they receive quality early childhood education and care, so childcare choices are crucial. Research also shows that quality preschool can deliver $2 worth of return to the economy for every $1 invested.
Treasured Tots is a highly respected early education provider in Perth with child care centres in Mandurah, Fremantle and Bibra Lake and if you’d like to find out more about high quality, affordable child care, we'd love to hear from you. Get in touch and book a tour or a friendly chat with one of our professional educators.