How childcare fee hikes will hit parents

CHILDCARE centres across the country are hiking their fees and sending already stressed parents doing it tough into a panic.

Fees are jumping as much as 10 per cent, while certain areas are even reporting rises as high as 600 per cent.

The actual figure equates to anywhere from $12 to $24 a day.

Some parents still have no idea how the looming changes or costs will effect them, with centres still not deciding on fees.

But the good news is it's not all doom and gloom - some experts say the situation isn't as bad as parents think and fee increases might be a good thing.

That's because for certain families, their centres changing their fee structure could mean they get more back on their subsidy.

One Sydney childcare centre has shared with its families that fees will increase by 5.5 per cent from July 2.

Sandcastles, run by G8 Education, will also be introducing nine-hour, ten-hour and full day sessions of care to help families maximise their hourly government subsidy.

"These sessional care options will be rolled out shortly when we understand the individual impacts of the child care reforms," managing director Gary Carroll said.

Emma Hunter said children were at a disadvantage when pushed into the school system too early to avoid childcare costs. Picture: Alex Coppel
Emma Hunter said children were at a disadvantage when pushed into the school system too early to avoid childcare costs. Picture: Alex Coppel

G8 is the second-largest operator of childcare centres in the country and the blanket increase will be introduced at all of its 516 centres.

Other centres will be faced with a 4.85 per cent increase, further to a 5.25 per cent increase just six months ago.

But a Blacktown City Council-run centre in Sydney has increased fees in the preschool room by $10.50 a day - a 600 per cent jump on the $1.50 increase the room got last year.

The Turnbull Government is combining existing subsidies for childcare into a single means- and activity-tested payment where both parents must be working, studying, volunteering or searching for work at least eight hours a fortnight to be eligible for the subsidies.

Households with a total annual income under $186,958 will no longer face a cap on the amount of rebate paid by to them each year.

For those earning more than this, the annual cap will lift from $7500 to just over $10,000 per child.

To be eligible, families must update their Centrelink account details through myGov.

Australian Childcare Alliance Nesha Hutchinson said there were a few reasons for centres increasing fees and they weren't all bad.

"One thing is wages have risen by 3.5 per cent so that needs to be covered, and that's the bulk of outgoing expenses, about 80 to 85 per cent," she said.

"There's a lot of changes that are going on that don't necessarily mean fees are going up.

"Because the model has changed they're trying to get the best they can for their families and make it as affordable as possible."

Ms Hutchinson said there were also centres who had left it until now to make changes in accordance with the National Quality System changes earlier this year so were passing those fees on.

Ellen Sowersby with her two-year-old twins Mia and Ava in Melbourne. She had hoped the new subsidy would dramatically ease the burden on her family. Picture: Stuart McEvoy/The Australian.
Ellen Sowersby with her two-year-old twins Mia and Ava in Melbourne. She had hoped the new subsidy would dramatically ease the burden on her family. Picture: Stuart McEvoy/The Australian.

She said a centre charging $100 for a 10-hour day might now be allowing a six-hour day and charging $80 so even though parents pay more per hour they get more subsidy.

"They're not using those extra hours anyway," Ms Hutchinson said.

"It's quite a few things coming together, a couple of percentage points each.

"I think it's not as bad as they think it might be because all of this is happening at the same time as the subsidy changes, so changing the rate will still mean they're better off because of the rate of the subsidy.

"It's less per day but more per hour, but more subsidy so less gap."

One family said they were going to be $10 better off a day with their child in full-time care until their centre told them in May that fees were going up by $7 a day.

They decided to move centres because it was the second $7 a day increase in 13 months.

"The new centre has informed us today that they are putting their fees up $9 a day," said mum Alex.

"So we are now up $1 per day with the new subsidy, I can only imagine the impact on families who were going to be worse off with the new subsidy.

"The government should stop trying to help families, it's just making big childcare richer."

Parents and carers have just one more week to sign up to the new system.

Education Minister Simon Birmingham assured families relief was just around the corner.

"On average, eligible families will be $1333 a year better off per child under the Turnbull Government's reforms but families need to make the switch to the new system or they risk disrupting their payments," Senator Birmingham said.

"We're investing an extra $2.5 billion and overhauling the system by retargeting subsidies to families working the most and to families earning the least, abolishing the annual rebate cap for most families and introducing an hourly rate cap to put downward pressure on fee increases."

Almost 940,000 families have already switched over to the new system or about 80.8 per cent.



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