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Managing your childcare costs

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While there’s been a lot of talk recently about parental-leave offerings, a far more important issue for working parents is usually how to afford the five years that follow the said maternity and partner leave!

Research released earlier this year showed that in 2012, CommBank customers alone spent $152 million on childcare services just via credit card, a figure predicted to rise to $167 million this year. All up, with childcare fees reaching as much as $150 a day or more per child, parents with two littlies in care can be out of pocket by tens of thousands of dollars each year.

Is it worth it?
Whether you choose to return full-time or part-time, or to take on a complete career change, heading back to work after becoming a parent is almost always ‘worth it’ in ways that go beyond the economic. Certainly for many parents, returning to work after maternity leave isn’t a choice but a financial necessity. For other parents, though, the main consideration is to create a fulfilling work/life balance and for some it’s to progress or maintain a career, with CommBank’s research suggesting almost one in four parents will go back to work for no net financial gain. Whatever your reasons may be, returning to work is often an important and valuable step in more ways than one.

How can we afford to put our child in care?
On the whole, the cost of childcare accounts for a fifth of the average family’s budget according to the CommBank study. The government does provide some assistance though, in the following forms:


  • The Child Care Rebate. For parents who both meet the ‘work, training, study test’ (or who are exempt from it), this rebate covers up to 50 per cent of the out-of-pocket expenses for childcare, with a maximum amount of $7500 per child per year. The rebate isn’t means tested and can be claimed either fortnightly, quarterly or annually into your bank account. Alternatively, it can be credited directly to your childcare provider, reducing your upfront fees. It’s important to note that the rebate is only payable for care that is provided by a service that’s been government-approved.


  • This includes most long daycare and family daycare centres, before and after school care, vacation care, some in-home care and occasional-care services. See www.mychild.gov.au to check whether your choice of care is approved.


  • The Child Care Benefit. This is an additional supplement for parents available for approved and registered care (care by relatives, friends or nannies who are registered with the Department of Human Services). The current maximum weekly benefit for approved care is $3.99 per hour, up to $199.50 per week for a single child. The maximum weekly benefit for registered care is $0.666 per hour, up to $33.30 per week. This is a means-tested payment for approved care and, depending on your family income, it can reduce to nil. If your family income is $41,902 or less, or you’re on income support, you may be entitled to the maximum rate of Child Care Benefit. The benefit is not means tested for registered care, though. Also, unless you have an exemption, your kids have to be immunised for you to receive this payment.


  • Additional assistance. Some parents may be eligible for Jobs, Education and Training Child Care Fee Assistance. See www.humanservices.gov.au for more.

Even with government benefits childcare can be expensive – but keep in mind that it’s also temporary! Although the short-term cost of care may outweigh your take-home pay, the returning-to-work benefits to your professional development, long-term family income, superannuation nest egg and personal happiness can make it more than worthwhile.

Weighing up your options? Speaking to other parents about their experiences budgeting for childcare can help you make an informed choice.

Related gallery: Ten insider tips about childcare

JUSTINE DAVIES is a finance writer, blogger and author of four books, including her most recent super-savings guide Money for Nothing. She is the finance editor with research and ratings firm CANSTAR and lives in Brisbane with her husband and three daughters.


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