Media Centre

Today the Rudd Government is delivering on its election commitment to increase the rate and frequency of the Child Care Tax Rebate (CCTR) to help working families meet the costs of child care.

From 1 July 2008, the rate of CCTR will increase from 30 to 50 per cent of working families’ out-of-pocket expenses for approved child care costs. This gives all eligible parents access to a benefit that is better than tax deductibility.

It will deliver $1.6 billion over four years to Australian families, with benefits ranging between $500 and $2500 per year for the average family.

The Government recognises that the early years are critical. As part of an ambitious reform agenda that will provide affordable and accessible quality child care and universal access to preschool, the increased CCTR is a substantial contribution to the Education Revolution.

The increase will reduce the burden of child care costs for parents, helping them get back into the workforce or further training. Greater workforce participation builds extra capacity in Australia’s economy, helping to ease inflationary pressures.

In addition, to increasing the rate of the CCTR the Government will lift the cap from $4354 to $7500 (indexed) per child per year, providing greater benefits for those working families using approved child care who are facing higher costs of living.

From 1 July 2008, payments will also be made on a quarterly basis instead of annually, with families receiving the first quarterly payments from October 2008.

Moving to more frequent, quarterly payments will help families meet their regular child care expenses, providing more assistance closer to the time that costs are incurred.

These changes to the rate and frequency of the CCTR are a key part of the Rudd Government’s commitment to improving the affordability of child care.

The increase in the CCTR will benefit families currently experiencing higher out-of-pocket child care costs.

This complements initiatives to improve the supply of quality child care through commitments to establish up to 260 additional child care and early learning centres and establish rigorous new national quality standards.

The tables below show that families with one child in long day care will be up to $2,486 better off per year.