Childcare fees are back – tips to keep costs down

Any parent can tell you that one of the most expensive parts of having children is the childcare fees you pay in their early lives.

After more than three months of not paying a cent for childcare, thanks to relief offered by the Australian government in response to the COVID-19 pandemic, families will start paying fees again this week.

But there is still assistance available that can offer a helping hand, and steps you can take now that may save you hundreds of dollars.

Government offering a lifeline

The Australian government does provide financial assistance by offering childcare cost subsidies.

From Monday, families are back to the old subsidy system, but this now has updated income thresholds.

If your family earns $189,390 or less, you won’t have an annual cap on your subsidy. Further, if your family earns between $189,390 and $353,680, they’ll cap your subsidy at $10,560 per child each financial year.

Childcare subsidy thresholds:

Source: Services Australia.

To be eligible for this you must:

• Care for a child 13 or younger who's not attending secondary school, unless an exemption applies;
• Use an approved childcare service;
• Be responsible for paying the childcare fees; and
• Meet residency and immunisation requirements.

What the government is offering families doing it tough

While relief on childcare costs may be over, the impacts of COVID-19 are still being felt by millions of households.

For those doing it tough, the government is easing the work activity test for its childcare subsidy to help people who have lost their jobs as a result of COVID-19. These families will receive up to 100 hours of care that will be subsidised for up to 12 weeks.

This may potentially mean all their fees are paid, even at a more expensive centre.

If you believe your family would qualify for this assistance, ensure your details are up to date on the MyGov website.

For postcodes that have been heavily impacted this year, whether by lockdown or bushfires, the government is also providing an additional childcare subsidy. It will cover 13 weeks of childcare fees. You will need to apply through Services Australia

Don’t qualify for hardship but can’t afford childcare fees - what now?

If you’re in the awkward position of struggling financially to afford costly childcare fees, but unable to qualify for hardship support, don’t panic. There are still things you can do.

1. Speak out. It’s worth talking to your childcare centre about any financial problems you’re facing. While it can be embarrassing, it’s still an important conversation to have. The childcare centre may offer solutions you’re unaware of.
2. Shorter days. Some childcare centres may offer shorter days at a reduced cost. Childcare centres have said they are worried about their roll plummeting, so may be able to reduce fees as an incentive to keep families.
3. Update your budget. If you haven’t already, now is an ideal time to consider updating your family budget to try and free up some cash. There are plenty of budget templates available on Pinterest, as well as budgeting websites, that may help.
4. Negotiate your home loan rate. If you’re paying off a home loan, call your bank and try to negotiate a better rate. Banks typically offer more competitive rates to new customers to incentivise them joining with your bank. Hop online and find out what rates they’re offering new customers, then call your bank and request a lower rate. or consider going onto a lower fixed rate, if that works for you.
5. Switch to a lower rate home loan. If talking your way to a lower rate doesn’t work, you may want to consider switching to a lower-rate home loan. With interest rates at record lows, there’s hundreds of dollars in repayment savings up for grabs for borrowers willing to shop around for better deals.
6. Sell some belongings. Consider finding some belongings you don’t need and selling them for some extra cash. It’s school holidays, so many parents will be looking for new toys and sporting equipment to help them entertain their kids. Facebook Marketplace and Gumtree are great platforms to help you sell your items.

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