Whether you’re a single woman, working mother or housewife,
there’s something in the Budget that affects you. We examine the key measures
below.
Key measures
-
Restrictions on the government’s parental leave
pay scheme to stop new mothers ‘double dipping’
-
A ‘Jobs for Families’
childcare package, incorporating a new means tested child care subsidy.
Designed to support working families and provide affordable access to
childcare, it will replace the Child Care Benefit, Child Care Rebate and Jobs,
Education and Training Child Care Fee Assistance (JETCCFA)
-
Stay-at-home parents may lose access to
childcare subsidies under a tough new activity test
-
Families with income of around $65,000 will
receive a subsidy of 85 per cent per child, up to an hourly fee cap
-
A two-year trial program for nannies
-
Additional funding for preschool programs.
Women shared the spotlight with small business in this
year’s Federal Budget. The centrepieces of the Budget were small business tax
cuts and a ‘Families package’, which included a mammoth investment in
childcare.
Women are still the primary carer of children while men
spend more time in the workforce, which explains why women generally have
smaller superannuation balances.
According to the Association of Superannuation Funds of
Australia, in 2011/12 the average female super balance was around $45,000 while
men had about $83,000. Women were retiring with around $105,000 compared to men
who had almost $197,000.
An analysis of 2014 ABS data shows that female workforce
participation rates had been steadily increasing until the last decade, when in
plateaued at around 60 per cent. The Government has seemingly indicated it is
cognisant of the increasingly important role women can play in driving economic
growth, which may have driven the Coalition’s decision to include a massive
investment in childcare in their second Budget.
A big impediment to higher female workforce participation is
affordable childcare.
At a time when the Australian economy is slowing as it
transitions from the mining boom to broader-based growth, Mr Hockey wants to
get women working :P (in paid employment – rather than a million things for
free)
Affordable
access to childcare
If passed through Parliament, the Families package contained
in the Budget will primarily benefit low to middle-income families while
leaving higher income families relatively unscathed.
A simplified means-tested childcare subsidy will be
introduced from July 2017 which will see families earning between $65,000 and
$170,000, around $30 a week better off - or $1,500 better off each year.
Families earning over $170,000 may still receive a 50 per cent subsidy.
The new childcare subsidy, which will replace the Child Care
Benefit, Child Care Rebate and Jobs, Education and Training Child Care Fee
Assistance (JETCCFA), will be paid directly to approved care service providers
to dramatically lower the upfront cost of childcare.
Families earning up to $65,000 a year will receive 85 per cent
of childcare fees, up to an hourly fee cap. This is reduced to 50 per cent for
families earning $170,000 or more.
Families earning less than $185,000 per year will no longer
have a cap on the subsidy they receive. If the family’s income exceeds $185,000
a cap of $10,000 per child per year applies.
Stay-at-home
mums
In a bid to boost workforce participation the Budget
introduces tough new work requirements in order for people to qualify for
childcare subsidies which may affect stay-at-home mums.
Families earning over $65,000 per annum with a stay-at-home
parent who isn’t working, looking for work, training, studying or undertaking
any other approved activity (such as volunteering) will lose access to
subsidies and will have to meet the full cost of childcare under changes
outlined in the Budget. Both parents must be undertaking these activities at
least eight hours a fortnight to qualify for subsidies.
No ‘double
dipping’
The Budget has also tightened eligibility for the
government’s parental leave pay scheme.
New mothers who have access to an employer-funded paid
maternity leave scheme stand to lose around $11,500 of taxpayer funded
benefits, as part of moves to stop women ‘double dipping’ if these measures are
approved.
New mothers currently can receive the government’s 18 weeks’
of pay at minimum wage plus participate in their employer’s parental leave
scheme, if they have one.
However, new measures designed to stop parents from ‘double
dipping’ will see mothers forfeit any government benefits if their employer
offers a more generous scheme.
What’s next?
Budget measures must pass through Parliament to be
legislated before they apply.
Labour and the Greens have already said they won’t support
cuts to family tax benefits announced in the 2014 Budget in order to fund the
new Families and childcare package.
If you think you might be affected by some changes, you
should speak to your financial adviser.
RI Advice Group Pty Limited (ABN 23 001 774 125), AFSL
238429. This editorial does not consider your personal circumstances and is
general advice only. It has been prepared without taking into account any of
your individual objectives, financial solutions or needs. Before acting on this
information you should consider its appropriateness, having regard to your own
objectives, financial situation and needs. You should read the relevant Product
Disclosure Statements and ALWAYS seek personal advice from a qualified financial
adviser.
