They say knowledge is power but let's be real – sometimes ignorance is bliss.
My back-of-an-envelope calculation suggests my husband and I were more than $80,000 out of pocket for childcare fees by the time our twins started school.
Gasp! I love my children and I love my job so I'm not complaining but I don't really want to think about that eye-watering number too much.
It's a lot easier now they're at school – thank goodness for public education – but there's still after-school care a few days a week and vacation care since they get many more holidays than us.
I've written previously about why public subsidies for childcare actually benefit the whole community, both economically and socially. In this column I want to get down to practicalities and explain the changes that are coming next year.
From July 2, 2018, the government is abolishing the Child Care Rebate and Child Care Benefit. The two payments will be replaced with a single payment, the Child Care Subsidy.
The government is billing this as a boost to childcare and with some justification since total federal spending on childcare will go up by $2.5 billion. All the same, there'll be winners and losers so it's important to look at how the new system will affect your family specifically.
Three things will determine how much a family receives: First, the combined family income. Second, how much the parents work, based on the activity of the parent who works least. Third, the type of childcare service the family uses.
The number of hours of subsidised care families can access will be determined by an activity test, including paid work (including parental leave), approved study or training, unpaid work in a family business, self-employment, looking for work, volunteering, and other activities on a case-by-case basis.
There's been criticism that the emphasis on how parents spend their time will impede access to early childhood education for kids in disadvantaged families. The government's response is that there'll be exemptions for parents who legitimately cannot meet the requirements. They've also funded a "safety net" for families where childcare will boost children's safety and wellbeing or grandparents are the main carers, for example.
Many will welcome the abolition of the annual cap for many families – currently Child Care Rebate is limited to $7613 a year for each child. That doesn't go far if your child needs more than one or two days a week or if you live in a big city where childcare rates are up to $150 a day.
Under the new system, families earning $185,710 or less will have no cap on the amount of Child Care Subsidy they receive. Families earning above that threshold but below $350,000 will be capped at $10,000 a year.
However, there's now an hourly cap on the subsidy: $11.55 an hour for centre-based care, $10.70 for family day care and $10.10 for out-of-school-hours care.
The subsidy will be paid directly to childcare providers to pass on in the form of reduced fees, rather than directly to families.
If you want to find out how much subsidy you'll get, there's a handy calculator at education.gov.au/childcare. It's pretty easy to use on both desktop and mobile, and it doesn't record your personal details so you can have a play around with it and figure out how a change in circumstances would affect your payments.
I won't share my own details but I ran through a couple of fictional scenarios.
Case study 1: Ash and Sarah have a daughter called Molly, age 4. Sarah is working full-time, while Ash is spending 8 hours a week in approved activity. Molly is attending a preschool program at a long daycare centre to prepare her for school in 2019. The family income is $60,000 total. This family is actually worse off under the new rules.
Under the old system, the family received $460 a fortnight of which $260 was Child Care Rebate. Under the new system they'll get just $350 a fortnight. The family is no longer subject to the annual cap of $7613 for Child Care Rebate – but this makes little difference to them because the current level of rebate is less than that.
If Ash did double the amount approved activity i.e.16 hours a week but the household income stayed the same, the scenario would change dramatically. In that case, the family would be eligible for $530 a fortnight, compared with $470 a fortnight under the current system.
If the work activity is low because Ash is the stay-at-home parent to a younger child not yet in formal care, I guess the family could try applying for an exemption. I don't know what the ruling would be on that.
Case study 2: Aram and Haneen have a household income of $100,000. They own a restaurant and Haneen is working four days a week. They have two children in long daycare, where the daily rate is $130 a day for up to 10 hours of care. The couple will be eligible for subsidy of $1220 a fortnight, with no cap. Under the old system they were eligible for $1040 a fortnight – $580 of that was rebate, which just squeaked under the annual cap.
Case study 3: Su-Lin is a marketing executive at a bank and Michael is a registered nurse. Both work full-time and the household income is $215,000. The couple has a nine-year-old, a seven-year-old and a four-year-old. They use a nanny twice a week, but the four-year-old goes to a preschool program at long daycare three days a week and on those days the older children go to after-school care. In their area, daycare is $150 a day for up to 10 hours, while after-school care is $30 a day for 3 hours.
This family sees an increase, from $470 a fortnight now to $530 a fortnight from next July. The annual cap increases to $10,000 for each child, though this doesn't make much difference now that two of the three kids are at school.
The government says most families will have higher subsidies than now and the system will mostly favour low and middle-income earners. That might be true, but it's clear that how much the parents work makes a huge difference.
Whether that's a good thing or not depends on whether you have the philosophical perspective that subsidising childcare is mainly about boosting workforce participation and economic productivity or if you frame childcare as part of the education system.
Caitlin Fitzsimmons is the editor of Money and writes regular columns on life, work and money. Find her on Facebook and Twitter.