Counting the Cost of Child Care - CareforKids.com.au®

Counting the Cost of Child Care
and how to reduce your outgoings

It's a new tax year and the cost of child care (and everything else) is still going up. Parents are under increasing financial pressure and employers are starting to worry about the impact that the cost of child care is having on their employees who are struggling, even on relatively good salaries.

So, we thought we'd put together a few cost-saving measures that you may or may not have considered. These can include things like switching to Family Day Care as an alternative to centre-based care; looking for child care close to home as opposed to close to work, particularly if you work in the CBD as centre-based care is cheaper in the suburbs due to lower rents etc; Nanny Sharing; setting up a care share amongst friends and family and asking for greater flexibility at work (see separate article below on your rights to flexible work arrangements).

Nanny /Au Pair Sharing
Nanny sharing is becoming very popular in many metropolitan areas of Australia and hopefully with the proposed changes for the recognition of nannies as approved child care, this may get even more popular and cost effective, particularly with families with more than one child.

Nannies and au pairs may be perceived as expensive child care options, but if you share their time, they can actually be more economical than other child care; plus they don't require you to burn fuel to drop off and pick up children and children are catered for in the home. If you have a friend or know someone who has a nanny, why not look at sharing? The cost of a nanny looking after two children at one time is only marginally more than looking after one (approx $22-25 for two children and $18-20 for one). It has the added benefits of relationship building between nanny and children and also between children from different families being cared for together. This can be particularly effective with only children or children whose older siblings are at school and who wouldn't otherwise have the companionship at home.

Au pairs, as long as they're properly vetted for suitability and police checks are also a great alternative. They still require a schedule and contract of expectations, similar to a nanny, and should only work "part time", generally around 30 hours is standard, but they become part of the family and you pay pocket money (usually around $150-200 pw) and provide board/lodging, which can be either at your home if you have the space or if you're sharing it could be at the other family's home.

Many of the nanny agencies registered on CareforKids.com.au can work on a Nanny Share arrangement for families. This can be either divvying out the nanny's time over a week or having the nanny look after more than family's children at the same time. Go to the nanny and au pair searches on CareforKids.com.au. Click here to find agencies that operate in your area and may be able to help you with nanny share.

It might also be worth pointing out that nannies can now qualify for child care benefit (but NOT child care rebate) as long as they are registered with the Family Assistance Office.

What is registered care?
According to the Family Assistance Office, registered care is care for work related purposes that is provided by grandparents, relatives, friends or nannies that are registered as carers with the Family Assistance Office. Registered care may also be provided by individuals in private preschools; kindergartens; some outside school hours care services and some occasional care centres. Carers or teachers in these services must be registered with the Family Assistance Office. Your carer can tell you if they are registered. If your carer would like information on how to become registered, they should contact their local Family Assistance office.

Parents can claim up to 50 hours of Child Care Benefit a week for each child in registered care if one or both are working or looking for work, training, studying or exempt from this requirement. For more information see work, training, study test.

The family's income will not affect the amount of Child Care Benefit you can get for registered care.

NB Child Care Rebate is NOT available for registered care.

Child Care Co-ops and Child Care Exchange
Many parents, particularly single ones find they are very isolated if they don't have many friends with children; a mothers' or fathers' group or can't rely on family for many reasons. Child Care Exchange and Child Care Coops can be a great way to not only cut the costs of child care but they can also be very useful in establishing a bit of a local support network of like-minded parents.

You can also start your own search by logging on to CareforKids.com.au Social Forum and starting a group for child care exchange.

Many women work part time and are happy to take turns looking after another child on their home days. This can be a perfect way to occupy the children's time and save on some child care costs. It also works for babysitting.

Family Day Care
Family Day Care is becoming more and more popular, particularly with the lack of child care places in metropolitan areas and the lower cost per child. It is often more flexible and convenient with a social aspect and family feel given it's usually run by a parent – often with one or two of their own children in the group.

Parents must make sure that the family day care they are considering is registered with the Family Assistance Office for tax and benefit purposes and are accredited to make sure it has been properly vetted for quality, safety and insurance. To search for local, registered family day care, click here.

Many Family Day Care providers also offer care on evenings and weekends.

For the pros and cons of all child care types, see our article and comparison table - click here

Other options:

Is it worth asking your employer about the potential for an in-house crèche or work based centre? Lots of companies have them and find that they can be a great way of helping employees to cope with work and parenting schedules and can be cost effective for all concerned depending on the numbers of parents using the service.
Are you able to relocate your child care to a more cost effective place? Many people initially go for child care centres near their work so they don't feel so hurried doing the pick up at the end of the day, but child care centres in the outer suburbs are often cheaper than in inner suburbs and metropolitan areas due to lower rents etc. They also often have more places available.
Are you eligible for In Home Care (see our article here), which currently provides subsidized child care for parents in certain circumstances such as rural location, disability of child or carer and unsociable working hours (shift workers etc). The parameters for eligibility for in home care are likely to be widened over the next few years so keep your eyes peeled for updates on CareforKids.com.au.
Look for a mutually agreed flexible working arrangement with your employer that puts less stress on time and finances through either flexi-hours, flexi days or working from home. See below on how to ask and what your entitlements are on this subject.
And finally – check you are making the most out of benefits available. The means test levels, eligibility and rebate percentages have changed over the last few years so it's worth a trip to Centrelink to make sure you are a) registered for the rebate and b) claiming everything you're entitled to. You pay the taxes, so reap the rewards! You could be missing out on a significant reduction in child care expenses.

For more information go to Department of Human Services (formerly Family Assist website) to check your eligibility.