Child Care – AMP-NATSEM Report on Affordability

Child care costs have increased dramatically in recent years, placing a strain on family budgets. This month AMP – NATSEM released a comprehensive report on child care affordability in Australia. The report says that over the past five years child care prices grew by 44.2 per cent (or 27.5 per cent in real terms), equivalent to an annual average increase of 7.6 per cent, according to the Australian Bureau of Statistics.

Governments have responded with large increases in financial assistance, mostly in the form of the Child Care Benefit (CCB) and the Child Care Rebate (CCR).

The CCB provides a capped, per hour, subsidy direct to the family or child care centre to offset the cost of care. The payment is means tested and provides maximum benefit to low income families. The payment increases in line with the consumer price index (CPI).

The CCR is not means tested and provides a rebate of 50 per cent of ‘out-of-pocket’ costs. This payment increases with the actual cost of child care.

Where a person lives will also have a big impact on their child care costs, with some daily rates as high as $170 a day.

Overall, 887,000 families use formal child care in Australia, with nearly 1.3 million children attending

around 13,000 approved child care centres. Informal care is the most used form of care in Australia. Grandparents provide 23 per cent of all hours of child care and non-resident parents are used for 27 per cent of total hours. Of formal care, Long Day Care easily makes up the most hours used at 30 per cent.

The report says that child care is used mostly by children aged between one and five years of age. Child care usage peaks for three year olds, where 59 per cent of children are in formal child care. Only around

eight per cent of children aged less than one use formal child care, which increases dramatically to 34 per cent by the age of one.

The report says that Long Day Care (LDC) is the most used type of formal child care, with around 630,000 Australian families using this type of care. LDC mostly caters for children aged five and under who are not yet at primary school. This type of care is generally used (or at least paid for) as a full day of care.

Family Day Care, or home-based care from registered carers, is used by around 109,000 families and mostly caters for younger children yet to attend primary school.

The major form of formal care for school-aged children is before and after school care (Outside School Hours Care—OSHC). This type of care is mostly used by primary school aged children immediately before and after school hours. Before school care is used by 117,000 families, while 241,000 use after school hours care.

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