Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Extra assistance for families



Download PDFDownload PDF

EXTRA ASSISTANCE FOR FAMILIES

Extra Assistance for Families 1

EXTRA ASSISTANCE FOR FAMILIES

TABLE OF CONTENTS

EXECUTIVE SUMMARY............................................... 2

PART 1 CHILD CARE .............................................. 3

(i) Making child care more affordable ..................... 3

(ii) Supporting Grandparents Who Care for Children 4

PART 2 MORE HELP FOR FAMILIES ......................... 5

COSTINGS SUMMARY ................................................ 6

Extra Assistance for Families 2

EXECUTIVE SUMMARY

Families are fundamental to a strong, cohesive community.

The Coalition recognises families face competing pressures on their time, energy and finances, particularly when they have young children.

Families should have the choice as to how they fulfil their responsibilities, and balance their own lives.

The Coalition believes that the best way we can support Australian families is to provide them with real choices - about their working arrangements, their family payments, and about child care.

High quality affordable child care is essential in providing options for Australian families.

Under the Coalition the number of child care places has grown from 306,500 places in 1996 to 563,000 places now and affordability of child care has improved as a result of the introduction of Child Care Benefit.

Many families choose to have one parent stay at home to look after their children or to work for just a few hours a week. The Coalition supports families who make this choice by providing Family Tax Benefit Part B, which is also paid to eligible single parent families in recognition of the additional pressures that they face.

The Coalition has been able to deliver these benefits to families because disciplined and responsible economic management over almost 9 years has produced a strong economy and a strong budget. This means that benefits can be provided to Australian families while keeping the budget in surplus and keeping interest rates low.

To ensure that families receive the extra assistance they deserve, a re-elected Coalition Government will provide, at a cost of $2.2 billion over four years:

• Families with extra assistance in meeting the cost of child care by introducing a 30% child care rebate on their out-of-pocket costs;

• Increased access by grandparents to Child Care Benefit by relaxing eligibility rules and improving affordability for grandparents on income support by giving them higher child care benefits; and

• More support for families to choose whether to have one parent staying at home by increasing the maximum rate of Family Tax Benefit Part B.

Extra Assistance for Families 3

PART 1 CHILD CARE

(i) Making Child Care More Affordable

Accessible, affordable and high quality child care is vital for many families to enable them to participate effectively in the workforce or to undertake study or training.

Under the Coalition the number of child care places has increased from 306,500 in 1996 to 563,000 places now.

Child care has also been made more affordable with the introduction as part of A New Tax System of Child Care Benefit. On average families now receive around $2,000 each year in Child Care Benefit.

The out of pocket costs families face can vary according to the type of service used to meet their particular needs - whether that is long day care, occasional care or outside school hours care.

Out of pocket costs can also vary depending on where families live.

To ensure that more families can benefit from the major expansion in the number of child care places, a re-elected Coalition Government will introduce a new 30% child care rebate, at a cost of $1 billion over three

years.

A family with an out of pocket cost of $20 per week will receive a 30% child care rebate of $300 per year.

All families who receive Child Care Benefit, which has a work, study or training test, will benefit from this extra assistance to help them meet the cost of child care.

Setting the new rebate at 30% of out-of-pocket costs recognises that child care costs faced by families vary according to where they live and the type of service they use.

Providing a rebate on the out of pocket costs supports families choosing the child care service which best suit their circumstances.

The 30% child care rebate will come into effect on 1 January 2005, from which time parents will need to keep a record of child care fees paid.

Legislation will need to be passed to enable families to receive payment of the 30% child care rebate from 1 July 2005.

Extra Assistance for Families 4

(ii) Supporting Grandparents Who Care for Children

Grandparents who have responsibility for the primary care of young grandchildren face the same challenges as younger parents. However, many grandparents do not enjoy the health, energy or vigour that can often be needed to care full time for these children.

Although grandparents have access to assistance such as parenting payment, family tax benefit, and child care benefit, caring for young grandchildren can also be financially draining.

A re-elected Coalition Government will provide grandparents caring for their grandchildren with improved access to Child Care Benefit, at a cost of $70 million over four years.

By waiving the work, study or training test for access to Child Care Benefit grandparents will be able to access full-time child care of up to 50 hours per week if required.

The work, study or training test will be waived from 1 November 2004.

A re-elected Coalition Government will also make child care more accessible for grandparents in receipt of income support, such as aged pension or carer payment, by enabling them to access Special Rate Child Care Benefit.

Special Rate Child Care Benefit will cover the full cost of child care fees charged to eligible grandparents.

Grandparents will be able to access Special Rate Child Care Benefit from 1 January 2005, subject to the passage of legislation.

Extra Assistance for Families 5

PART 2 MORE HELP FOR FAMILIES

The Coalition introduced Family Tax Benefit Part B to provide extra assistance to families with only one main income earner, including sole parent families.

Family Tax Benefit Part B ensures that families have the choice as to how they balance their work and family responsibilities. Without this extra assistance many families may feel pressure for both parents to work when they would prefer one parent to stay at home and care for their children.

To support parents who choose to stay primarily at home but wish to work a few hours a week, in the 2004-05 Budget the Coalition more than doubled to $4,000 the income threshold at which benefits start to reduce. The rate at which benefits withdraw was also reduced to 20 per cent.

The Coalition also announced that where the secondary earner (usually the mother) returns to work, income from employment will not be counted against their eligibility for FTB Part B already received in that financial year. This ensures that the decision to return to work can be based solely on the family’s circumstances without any concern about loss of benefits.

To ensure that families continue to have choice as to the arrangements which best suit their own circumstances, a re-elected Coalition Government will increase the maximum rate of Family Tax Benefit Part B by $300, at a cost of $1.1 billion over three years.

For families where the youngest child is under 5 years of age the maximum rate of assistance will increase to $3290 per year. Where the youngest child is aged over 5 years the maximum rate of assistance will rise to $2385 per year. These increases will take effect from 1 July 2005.

As a consequence of the increase to the maximum rates, the amount earned by the second income earner before eligibility for Family Tax Benefit Part B cuts out completely will be increased to $20,538 where the youngest child is aged under 5. Where the youngest child is aged 5 or over families will continue to receive assistance until the second income earner is earning $16,013.

Extra Assistance for Families 6

Printed and authorised by B Loughnane, Cnr Blackall and Macquarie Streets, Barton ACT 2600

COSTINGS SUMMARY

Extra Assistance for Families

2004-05

$m

2005-06

$m

2006-07

$m

2007-08

$m

TOTAL

$m

Making child care more affordable - 170.0 400.0 470.0 1040.0

Supporting grandparents who care for grandchildren 10.0 20.0 20.0 20.0 70.0

More Help For Families

- 376.0 357.0 340.0 1073.0

Total

10.0 566.0 777.0 830.0 2183.0