Seven big changes to family and child care benefits

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Seven big changes to family and child care benefits

What they mean for your family budget

By Jason Bryce | 25 March 2017

The Omnibus Bill has finally passed - Photo source:

“It is not a choice for many of us to be on welfare”

…we do it, not because we want to, but because circumstances put us there

After four years of political manoeuvring, an amazing, heartfelt impassioned speech by single mother and independent senator Jacqui Lambie signalled the passage, finally, of the government’s Omnibus Savings Bill.

“It is not a choice for many of us to be on welfare,” said Jacquie, “it is shameful and embarrassing and it is bloody tough but we do it, not because we want to, but because circumstances put us there.

“For you (the government) to take more money off those those people,” said Jacqui fighting back tears, “you have no idea how bloody tough it is.”

“Every little cent counts to those people (single parents) and what you are doing is shameful.”

“And if you realised the damage you are continually doing to that part of society you would stop doing it.”

“I just wish you would reconsider.”

Jacqui Lambie
Jacqui Lambie

But there was no reconsidering and the Omnibus Savings Bill passed the senate with the support of other cross bench senators including the Nick Xenophon Team.

Dr Cassandra Goldie, the chief executive of the Australian Council for Social Services said she is appalled that “the Turnbull government rammed through social security cuts that are specifically aimed at hitting people on low-incomes.”

“Overnight the lives of 1.5 million households have been altered for the worse.”

In short the major FTB, Parenting Payment, Youth Allowance and Child Care changes are:

1) Family Tax Benefits are being frozen at the current rate for two years.

2) A new one week waiting period for Parenting Payments and Youth Allowance is being introduced.

3) The financial hardship exemption from waiting periods is being abolished. There is still an exemption for domestic violence cases.

4) Parenting Payment and Newstart income free limits are also frozen. This means people who are working (probably part time) and still getting some benefits will see those benefits fall in value over the next few years.

5) Child Care Benefit and Child Care Rebate will be rolled into one child care payment and the subsidy increased to 85 per cent of the full cost of child care.

6) Removal of the $7,500 annual cap on child care payments. There is now no cap for almost all families. This is a big victory for thousands of working families.

7) The base level of subsidised child care is 12 hours per week with no activity test.

Terese Edwards from the National Council of Single Mothers and their Children
Terese Edwards from the NCSMC

“Frightening and ridiculous” is how Terese Edwards from the National Council of Single Mothers and their Children describes the family benefit changes.

“The freeze on Family Tax Benefits is a ridiculous decision,” said Terese, “Already 40 per cent of single parent families are living in poverty.”

“And the one week wait for payments is a frightening precedent for Australia.

“One week can be the difference between retaining a tenancy or sliding into homelessness.”

“Mums on Parenting Payment or Newstart who get a job are also badly affected” said Terese.

“Finding a job and keeping work should mean a financial gain for people on benefits!

“Working mums on parenting payment with three children retain just $118 per week before they start losing payments,” said Terese. “Mums on Newstart keep $52, so its obviously inadequate and makes a mockery of the statement ‘the best way out of poverty is to get a job!'”

But it’s not all bad news.

Single mother Samantha Page is the chief executive of Early Childhood Australia, a lobby group concerned about child care and pre-school education.

Sam Page, CEO of Early Childhood Australia
Sam Page, CEO of ECA

“Seventy five per cent of families will be better off, most of the time, under this childcare package.

“There’s no doubt that the new subsidy for low and middle income families is a better deal,” said Sam, “It’s a higher level of subsidy and the $7,500 cap has been removed.”

“But I’m disappointed the government didn’t adopt the 15 hours of care a week as a base entitlement for all children.”

Almost all single mothers will qualify for subsidised care of up to 12 hours per week per child even if they aren’t working.

After three years of campaigning and protesting, at least the changes are now known, and they are greatly watered down from the previous proposals. Terese has been leading this battle for single mums since the budget of 2014 and points to the victories, the proposed cuts that have been abandoned by the government in this new law like:

1) No cuts to Family Tax Benefit Part B for single parents with children 13 to 16 years.

2) Stopped the scrapping of FTB Part B for sole parents with children over 15 years.

3) Retained end-of-year FTB supplements

4) Retained Pensioner Education Supplement and Education Entry payment for single mothers.

Now this battle is over, the first thing Terese did this morning was to sit down and write a quick note to Jacquie Lambie. In part it reads:

Dear Senator,

We remain grateful every time a mum speaks up and our gratitude extends to you. Our society is enriched when all voices are heard. I firmly believe in truth telling and that it will conquer the myths, the spin and the denial.

With much respect,

Cheers T

Jason Bryce
Business & Finance Journalist

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Jason is a business and finance journalist with 20 years experience, and is also a member of the Expert Opinion Panel. He has a regular weekly column in the Sunday Mail (Brisbane) and writes regularly for the Business Daily section of the Herald Sun in Melbourne and many other newspapers and magazines. Read Jason Bryce’s full profile here

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