Federal government pulls the plug on free childcare

Families will need to 'make the difficult decision' of pulling children out of childcare or paying ‘exorbitant’ fees

Federal government pulls the plug on free childcare

Working parents will have to cover childcare costs starting this week after the federal government ended its relief program for essential workers with family care duties.

The benefit – introduced in April at the height of the COVID-19 lockdown – covered childcare expenses in full for three months. The program has “done its job,” according to Education Minister Dan Tehan.

Read more: Mothers leaving work in lockdown could widen gender pay gap

The government is now re-introducing the Child Care Subsidy, which had been in place before the pandemic. The old system allowed care centres to charge parents for their services while the government stepped in to cover a fraction of the cost.

The conclusion of free childcare services, however, is expected to impact nearly a million families across the country who have been struggling financially through the pandemic. The return to the old system will likely put a dent on their family budget, Labor leaders pointed out.

Working parents will be forced to “make the difficult decision” of whether to pull their children out of childcare or pay “exorbitant” fees, said Amanda Rishworth, shadow minister for early childhood education and development.

Beneficiaries under the old system will automatically be reverted to that scheme.

Meanwhile, those who lost their job during the pandemic can still seek additional childcare subsidy for a maximum period of 13 weeks.

Read more: Amazon workers to receive backup childcare benefit

With parents once again paying for childcare services, the federal government is also preparing to cut its JobKeeper payments to childcare workers by July 20 – the first sector to be taken out of the temporary wage subsidy program.

The decision appears to be a surprising turn after Prime Minister Scott Morrison initially planned to keep the wage subsidy program running until the end of September.

The government will instead be supporting the sector with a $708m transition package as the demand for childcare services gradually returns to the same level prior to the lockdown.

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