Illawarra educators and parents confused by new child care subsidy

Federal Education Minister Simon Birmingham expects around one million Australian families will be better off about $1300 per child per annum, under the biggest childcare funding overhaul in 40 years.

The senator also touted that the new system was much easier to use, but Kidz Childcare general manager Kathy Patrick argued the opposite was true.

The Wollongong-based educator said the new system, which started on Monday, July 2, also didn’t benefit all families.

“From what we can see just this morning around 10 per cent of families will have a fee reduction. However we have also had 25 per cent of families have their subsidised hours reduced,” Ms Patrick said.

Read more: Childcare changes will see 2984 Illawarra families worse off: Labor

“The idea of moving subsidised hours from a per week system to a per fortnight system does not make any sense….this is very confusing to parents, as they can be charged different fees each week depending on the amount of subsidised hours they have used in the first week.”

Under the old system, every child received a $7500 subsidy over the financial year, regardless of how much their parents earned or whether they worked.

But the new system will only subsidise parents who work, study or volunteer, and each family will have to keep proof of that if Centrelink comes knocking.

Eligibility is based on the parent who is working least, so if one parent works and the other stays at home, the subsidy is zero.

It will also be means tested. Families earning more than $351,248 will get nothing; households earning less than $67,000 will receive 85 per cent of the childcare fee, and middle-income earners will get 50 per cent.

Read more: A childcare revolution is set to change the way we live

Ms Patrick though said the lack of detailed information given in the lead up and the government support services provided to clarify “often incorrect information” was causing confusion and anger for all parties.

“The government systems that we are required to use are very slow and one (PRODA) crashed for a whole day,” she said.

“Some Centrelink staff have been incorrectly advising parents who are coming in angry and frustrated when we tell them that they have to go to their myGov account or back to Centrelink to sort the issue out as we have nothing to do with the percentage of subsidy that parents are given.”

Australian Childcare Alliance NSW president Lyn Connolly said the CCS scheme was complex and confusing.

“It was a big day today for 1.2 million Australian families and 16,000 childcare services. But I’d say most centres this morning weren’t in a position to even tell families what their new fees will be,” she said.

“Parents have been misinformed by Centrelink and given information contrary to the legislation and the Minister’s [Birmingham] rules.

“They have been logged out of myGov and in some cases told the service where their child has been attending was closed, which isn’t the case at all.

“A huge number of centres are trying to comply with the ever changing regulations but they are facing obstacles at every step.”