Tomorrow the Rudd Government delivers on its election commitment to provide substantial relief to families struggling with the high costs of child care.
From tomorrow, the Child Care Tax Rebate will be boosted from 30 to 50 per cent of out-of-pocket expenses for approved child care costs.
As well as increasing the rate of the CCTR, the Rudd Government has also lifted the maximum amount of the CCTR from $4,354 to $7,500 (indexed) per child per year.
Payments will now be made quarterly instead of annually, with families receiving the first quarterly rebate from October 2008. This will help families meet their regular child care expenses, providing more assistance closer to the time that costs are incurred.
Childcare costs have skyrocketed in recent years, making it very difficult for many parents to return to work to bolster the family finances.
For many who have returned to work – hefty childcare costs have put serious strain on family budgets already stretched by rising petrol grocery and mortgage costs after eight interest rate rises in three years.
That’s why the Rudd Government is delivering the Childcare Tax Rebate to help tip the scales back in favour of families under financial pressure.
The CCTR is a key part of the Government’s $55 billion Working Families Support Package – which includes $46.7 billion in tax relief – aimed at helping families with rising livings costs.
As a result of tomorrow’s increase to the CCTR, a family with a combined income of $70,000 and one child in 30 hours of long day care (LDC) per week will be around $1,000 a year better off and will now have 71 per cent of their total child care costs met by the Government (previously 60 per cent).
A family with a combined income of $90,000 and 1 child in 40 hours of LDC per week will be around $1,740 a year better off and will now have 63 per cent of their total child care costs met by the Government (previously 48 per cent), as a result of the Rudd Government’s changes.
As well as easing the strain on the family budget, this major boost to the CCTR will play an important role in building our national economy by helping to boost labour force participation.
At a time when skills and labour shortages are feeding inflation and interest rates pressures, it is vital that we help more parents get back into the workforce or undertake further training.
As well as increasing the CCTR, the Rudd Government is also committed to expanding the availability of child care by building 260 additional high-quality Early Learning and Care Centres in areas of high need.
The Rudd Government is committed to tipping the scales back in favour of working families and tomorrow’s increase in the CCTR – along with major tax cuts coming into effect tomorrow – will help to meet that goal.