You say: make all child care tax deductible - CareforKids.com.au®
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You say: make all child care tax deductible
The Productivity Commission has been charged with the responsibility of suggesting some areas for improvement and first and foremost in your mind is affordability, with the overriding opinion from those of you who responded to our 2014 Child Care and Workforce Participation Survey¹ that child care should be tax deductible.

The cost of child care still increasing with over 55 per cent of our survey responders saying they are paying over $300 per week per child in child care - up 5 per cent from last year. It's common for parents of under twos to be paying over $100 per day per child in urban and suburban child care centres and with the rebate cap remaining at $7,500, while child care fees rise, affordability is getting worse.

With this in mind it's hardly surprising that 90 per cent of parents polled believe all child care should be tax deductible.

Making all child care tax deductible was also number one on the list of Top things that would make the lives of working families easier, with 73 per cent of responders saying of the issues being covered in the Productivity Commission's inquiry into child care, tax deductibility would make a significant difference to their family life.

Making all child care tax deductible certainly acknowledges the fact that working and child care go hand in hand and child care is a legitimate and necessary working expense that we should be able to offset against our income for tax purposes. If it weren't for child care, parents with young children simply wouldn't be able to work.

Things that would make a significant difference to working families, according to you were affordability /cost related. The one exception at Number 2 being to encourage employers to offer more flexible working opportunities:
  1. Making child care tax deductible 73 per cent
  2. Encouraging employers to offer more opportunities for flexible work 62 per cent
  3. Greater regulation of fees to improve affordability 50 per cent
  4. Expansion of child care subsidies to include nannies 43 per cent and expanding subsidies to other care such as grandparents, preschool and babysitters 42 per cent

Nannies, babysitters and grandparents should also qualify for rebate


With 70 per cent of working mums in our survey saying that the child care rebate makes a significant difference in terms of making going back to work viable or not, it stands to reason that all child care that is undertaken to allow parents to be back in the workplace should qualify for the same rebate… Doesn't it?

However nannies, babysitters and grandparents are largely excluded, not being deemed "formal child care".

This is particularly pertinent when combined with the lack of child care places for the under twos. Many Australian families are simply being caught between a rock and a hard place.

According to one working mum: "Affordability is the biggest issue for my family and availability! We had to use nannies for 8 months, 4 days a week until we found a vacancy at a child care centre. So no CCB or CCR was applicable for this whole period! We were going backwards financially at a rapid rate!"

There has been a lot of talk about nannies and the need to make them approved child care to qualify their employers for the child care rebate. This hasn't yet happened, and nannies are therefore often still an expensive child care option, which could account for why slightly fewer families are using them this year compared with 2013.

In 2014 just 11 per cent of families are using nannies while in 2013 more than 13 per cent listed this as their child care option. The missing two per cent seems to have switched across to long day care centres, which rose from 76 per cent in 2013 to 78 per cent in 2014.

But many Australian families can't find child care and resort to hiring a nanny as a fall back. Just under a fifth of responders (18 per cent) said they couldn't get the child care they wanted.

As far as making nannies and other forms of child care equal, 62 per cent believe families employing nannies should qualify for CCB and CCR, with 43 per cent of families saying this would make a difference to them in terms of the affordability of working.

It remains to be seen what the Productivity Commission's findings will be and how far the Government will act on them, but it's clear from our survey and the response from you, the parents on the front line, that tax deductibility and making all child care the same in the eyes of the Child Care Rebate are two key issues that could make all the difference to the affordability of going back to work and the lives of working families.

¹ 2014 Child Care and Workforce Participation Survey polled just under 1900 participants: 95% female; 75% married, 12% living with partner. 88% working.


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