1996-1997
4.1: Children's Services
The 1996-97 Portfolio Budget Statements, informs Senators and Members of Parliament of the proposed allocation of resources to portfolios outcomes and their objectives and targets including the agencies within the Health and Family Services portfolio.
Objective
- To assist families with dependent children to participate in the workforce and the general community by ensuring the affordability of child care and promoting adequate supply and quality of child care.
- In particular the Sub-Programme has the following aims:
- Choice - to improve choice for families to care for their children;
- Affordability - to keep the cost of child care affordable for low and middle income families particularly for families participating in the paid labour market;
- Supply - to respond to the needs of families in relation to demand for a range of options for child care; and
- Quality - to work consultatively with States and Territories to encourage the provision of quality outcomes for children in efficiently managed services and to support the development of children with additional needs by enabling them to gain equitable access to child care.
Goals
- Maintain affordability of child care particularly for low income families.
- Promote quality of child care through accreditation and targeted support for services.
- Improve access to child care arrangements for parents, at work, or who study, train or seek work.
- Contain cost growth consistent with the underlying increase in workforce participation of women and parents.
- Increase choice of child care options available to families.
- Promote increased competition amongst providers.
- Increase cooperation between the Commonwealth, States, Territories and other key players in the provision of child care and related services.
Strategies
- Maintain affordability, particularly for low income families, with assistance directed primarily to families rather than providers to increase choice and promote competition.
- Improve and monitor families' access to child care places through priority of access guidelines and by providing innovative child care places for remote areas.
- Through consultation with the industry, develop planning and other strategies to meet the demand for quality child care services while keeping expenditure growth consistent with the underlying increase in workforce participation of women and parents.
- Implement and monitor measures to improve efficiency and increase access to services for children with additional needs.
- Increase the supply of child care places through the implementation of growth strategies and the provision of information to employers and the private sector.
- Review existing communication strategies to improve access to information for parents and industry.
- Review current guidelines and procedures in the Quality Improvement and Accreditation System for long day care centres and develop industry supported quality assurance systems for other service types.
- Manage the child care component of the Jobs, Education and Training (JET) Programme.
- Fund an effective range of support services to assist staff and management committees to provide efficient, quality child care to children in Commonwealth funded children's services.
- Review with the States and Territories, roles and responsibilities to promote greater efficiency, effectiveness and accountability.
Performance Indicators and Targets
Effectiveness
- Child care places provided for work related purposes in each age cohort compared with evidence of demand.
Target: Sufficient places to meet demand for work related care. - Average weekly out of pocket cost (fees paid less assistance received) for low income families assisted by Childcare Assistance and/or Childcare Cash Rebate.
Target: Maintain affordability for low income families eligible for maximum Childcare Assistance.
Efficiency
- Average subsidy levels per hour of care and per hour of care for work related reasons.
- Proportion of assistance paid for work related care.
- Administration costs (Health Insurance Commission and Department) as a percentage of Programme costs.
- Administration costs (Department only) per child care place.
Quality
- The number of child care centres participating in the Quality Improvement and Accreditation System (QIAS).
Target: 100 per cent participation. - User satisfaction with child care services.
Target: Base line data on services involving parents in the development of programmes.
Equity
- Child care places provided in rural and remote areas compared with the number of places required expressed as a percentage of demand compared with national benchmarks.
Target: Equitable provision of child care in rural and remote areas. - Percent of children with additional needs using Commonwealth funded child care services compared with evidence of demand.
Target: Proportional representation.
Budget Measures
Spending
Funding for Consultation Process on Reform of the Child Care Assistance System
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
0.5 | 0.2 | 0.2 | 0.2 |
Purpose of Measure
To consult with State and Territory Governments, industry and families on a range of measures to ensure the long-term sustainability of the child care sector and to implement the ongoing National Information Strategy.Top of page
Expected Implementation Strategies for Measure
Conduct consultations with State, Territory and local Governments, industry and families on the development of the National Planning Framework, the review of Priority of Access Guidelines, charging practices and strategies to improve the quality and access to information for industry and families.Consultations will be conducted immediately after the Budget and a report will be prepared for Government consideration in the 1997-98 Budget.
Outyear funding will maintain the new information system for industry and families.
Intended Impacts of Measure
Measure will inform and enable the development and maintenance of a national information system to meet the requirements of parents and service providers.Consultations will assist the development of a National Planning Framework to deliver a more even distribution of places to meet the needs of parents and children, to ensure greater access to care and a sustainable child care sector.
The consultation process will also seek views on a range of options to implement the Budget measure to pay Childcare Assistance and the Childcare Cash Rebate direct to families.
Savings
Reform of Childcare Operational Subsidies
This measure includes funded advice to help services to restructure; special financial assistance for services in disadvantaged areas; and funds to enable children with high levels of additional needs, particularly those with a disability, to be accommodated in services.Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
8.5 | -35.1 | -40.5 | -41.7 |
Purpose of Measure
To move towards greater competition and efficiency in the public and private centre-based child care sector and to remove inequities in Government assistance for families using private and community-based centres.Top of page
Expected Implementation Strategies for Measure
The removal of operational subsidies from community long day care (excluding occasional care, multi-functional and multi-functional Aboriginal children's services) will occur on 1 July 1997.Assistance will be provided to help community centres to restructure prior to the implementation date. $6.3 million will be provided in 1996-97 to assist community centres to purchase financial and/or management advice to help restructure their business. A further $2.0 million will also be available in 1997-98 for this purpose. This assistance will mainly be provided in the form of a one-off grant to services.
Assistance totalling around $4.1 million per year will be available from 1 July 1997 to provide supplementary funding for services in disadvantaged areas to ensure that families in these areas are not further disadvantaged through loss of access to child care.
An additional $10 million per year will be provided to support children with high levels of additional needs, particularly those with a disability, who would not otherwise be able to be placed in Commonwealth child care services.
Implementation will involve changes to the Child Care Act 1972. New guidelines and administrative arrangements will be developed and promulgated to services. Implementation may also involve some renegotiation of Commonwealth-State agreements under the National Child Strategy.
Intended Impacts of Measure
Withdrawal of operational subsidy from community centres will encourage services to become more efficient and cost-competitive with the private sector. Supplementary funding will minimise the effect of the withdrawal of the subsidy on services in severely disadvantaged areas and to facilitate access more broadly for children with high additional needs, particularly those with a disability.There is potential for increased costs for some families using community-based centres as a result of the removal of operational subsidy. Fee increases should be minimised through provision of assistance to services to restructure and become more efficient. For families not currently receiving the maximum Childcare Rebate, the reduction or loss of Childcare Assistance benefit could be partly offset by an increase in the Childcare Cash Rebate.
Abolish Additional Income Allowed for Additional Dependent Children when Assessing Eligibility for ChildCare Assistance
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-4.7 | -21.9 | -24.4 | -26.7 |
Purpose of Measure
To simplify the income testing of Childcare Assistance and align the income assessment process with Family Payment.Top of page
Expected Implementation Strategies for Measure
The Disallowable Instrument Childcare Assistance (Fee Relief) Guidelines will be amended and new administrative arrangements will be developed and promulgated for Childcare Assistance reassessments applying from 1 April 1997.Families will be advised of new arrangements. Services will be notified of guidelines and amendments.
Intended Impacts of Measure
The income used for Childcare Assistance assessment purposes is based on the family weekly taxable income less $30 for each dependent child under 16 years of age in the family (not just those in child care). The $30 disregard was originally established in recognition of other costs associated with the care of children. Since its introduction, there have been significant improvements in other forms of government assistance to families with children.Most families on low incomes who currently receive maximum Childcare Assistance (40 per cent of all families receiving Childcare Assistance) would not be affected by this option. Out-of-pocket costs would increase slightly for families on higher incomes receiving Childcare Assistance:
- up to a maximum of $1.65 per week for a family with two children under 16 years where one child is in 30 hours of formal child care.
Reduce Childcare Assistance Income Cutoffs for Second and Subsequent Children
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.1 | -3.9 | -4.4 | -4.8 |
Purpose of Measure
To improve targeting of subsidy to low and middle income families.Expected Implementation Strategies for Measure
Current income cut-offs are $63,856 for 1 child in care, $76,076 for two children and $104,208 for three children. The one child cut-off will continue to be aligned with the one child Family Payment income cut-off. The revised cut-offs for two children will be $74,880 and for three or more children, $91,416. The new cut-offs will take effect on 1 April 1997.Top of page
Intended Impacts of Measure
About 500 high income families will no longer be eligible for part Childcare Assistance and a further 29,500 families will receive a slightly reduced level of assistance. This option does not impact on the level of assistance received by any family with only one child in care or on low income multiple child families currently receiving maximum Childcare Assistance.For families not currently receiving the maximum Childcare Rebate, the reduction or loss of Childcare Assistance benefit could be partly offset by an increase in the Childcare Cash Rebate.
Extend Range of Fringe Benefits for Childcare Assistance Income Testing Purpose
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
- | -0.1 | -0.3 | -0.3 |
Purpose of Measure
To remove the current anomaly which allows families not to include benefits received in lieu of income in their income assessment for Childcare Assistance purposes.Expected Implementation Strategies for Measure
Family Payment income assessment changes outlined in the Department of Social Security 1996-97 Budget documentation, relating to the inclusion of expense payments for income purposes, will also flow onto income assessment procedures for Childcare Assistance.Intended Impacts of Measure
The range of fringe benefits taken into account in the income tests for Childcare Assistance will be extended from 1 January 1998. Approximately 650 families receiving employer provided fringe benefits will receive a reduced rate of Childcare Assistance.Cap Access to Childcare Assistance at 50 Hours per Child per Week
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-6.5 | -29.8 | -33.3 | -36.4 |
Top of page
Purpose of Measure
To cap Childcare Assistance at 50 hours per week per child except for families in genuine need for care beyond this limit to meet work related commitments.Expected Implementation Strategies for Measure
This measure will require new administrative guidelines. The Disallowable Instrument Childcare Assistance (Fee Relief) Guidelines will be amended to enable implementation from 1 April 1997.Intended Impacts of Measure
There are approximately 4,500 families who currently use more than 50 hours of care a week. However current charging practices have resulted in a further 22,500 families paying for and receiving Childcare Assistance for more than 50 hours of care while using less. The limit to 50 hours Childcare Assistance per week will encourage centres to reform their charging practices to make them more consistent with families' usage of child care.Exemption from the limit will be available for working families able to demonstrate a genuine need for more than 50 hours of care per child per week to meet work related commitments.
For families not currently receiving the maximum Childcare Rebate, the reduction in Childcare Assistance benefit could be partly offset by an increase in the Childcare Cash Rebate.
Freeze Childcare Assistance and Childcare Cash Rebate Fees Ceilings for 2 Years
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-3.0 | -17.5 | -30.7 | -33.6 |
Purpose of Measure
To contain growth in child care outlays.Expected Implementation Strategies for Measure
No indexation of the long day care Childcare Assistance fee ceiling or the Childcare Cash Rebate fee ceiling on 1 April 1997 or 1 April 1998.Top of page
Intended Impacts of Measure
In the current low inflationary environment, minimal price flow-on is expected.For families not currently receiving the maximum Childcare Rebate, the reduction of Childcare Assistance benefit could be partly offset by an increase in the Childcare Cash Rebate.
Reduce Childcare Cash Rebate Benefit to 20% for Families Above the Family Tax Initiative Ceiling
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-2.4 | -10.1 | -10.8 | -11.4 |
Purpose of Measure
To reduce the level of benefit paid to high income families.Expected Implementation Strategies for Measure
The Childcare Rebate Act 1993 will be amended. New guidelines and administrative arrangements will be developed and promulgated with changes to Childcare Cash Rebate eligibility applying from 1 April 1997.Families and carers registered with the Health Insurance Commission will be notified of new arrangements.
Intended Impacts of Measure
This measure reduces the rebate from 30 per cent to 20 per cent for families with income above the new Family Tax Initiative income cutoff ($70,000 for families with one child, increasing by $3,000 for each subsequent child). Eligible families below this cutoff will continue to receive the full Rebate.Pay Childcare Assistance and Childcare Cash Rebate to Families through Shopfront Agency - Department
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
0.9 | -0.7 | -6.6 | -6.9 |
Top of page
Purpose of Measure
To strengthen parents' right to choose the arrangements they want for the care of their children by paying child care fee subsidies to families. It is expected that this measure will give families improved choice in purchasing quality child care from approved child care providers.Including both Childcare Assistance and Childcare Cash Rebate in one agency will streamline the administration of child care payments for parents, services and government. Linking the Family Payment and Childcare Assistance annual income assessment review processes will reduce running cost requirements.
Expected Implementation Strategies for Measure
From 1 January 1998 the payment of Childcare Assistance and Childcare Cash Rebate will be paid by the Government's new Shopfront. At that time, families will be given the choice of receiving their child care payments directly or having them paid to their child care service.The Minister for Family Services will retain policy responsibility for Childcare Assistance and Childcare Cash Rebate.
The Government will consult widely with families and the child care industry with the objective of ensuring the most effective implementation of this initiative.
Intended Impacts of Measure
The initiative will give families more control over their benefits. Families will be assessed by the Shopfront. Child care payments will continue to be linked to child care provided by an approved or registered provider.The measure to make payments to families will provide an incentive for services to become more responsive to family needs. For the payment of Childcare Assistance, approved services will still need to comply with the Childcare Assistance eligibility guidelines and long day care centres will need to participate in the Quality Improvement and Accreditation System.
Pay Childcare Assistance and Childcare Cash Rebate to Families through Shopfront Agency - Health Insurance Commission
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
- | -1.3 | -13.3 | -14.6 |
Remove New Growth Strategy in Long Day Care Centres
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-9.7 | -28.8 | -25.6 | -15.4 |
1996-97 reflect part-year savings.
Purpose of Measure
Not proceed with uncommitted community-based and employer sponsored centre based places in the New Growth Strategy and rely on the private sector for the provision of new centre-based long day care. Retain some capital funding for services in rural and remote areas to assist in the development of services in these areas.Expected Implementation Strategies for Measure
New community-based and employer sponsored long day care centres will not be established as planned in the New Growth Strategy.$10.9 million capital funding over four years will be retained to specifically target child care supply to rural and remote areas.
Intended Impacts of Measure
The extent of the private sector interest in the provision of child care has reduced the need for Commonwealth Government capital to establish new child care centres. This measure will remove 5,500 places from the 1996-97 to 1999-00 forward estimates, saving significant Commonwealth capital and interest-free loans.Savings from Reduced Cash Balances Held by Statutory Bodies
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-3.4 | - | - | - |
Purpose of Measure
Improved cash management of HIC child care rebate payments.See the description of the Savings from Cash Balances Held by Statutory Bodies measure under sub-program 2.1.
Application of an Efficiency Dividend to Commonwealth Own Purpose Outlays and Specific Purpose Payments of a Running Costs Nature - Department
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.9 | -2.5 | -3.2 | -3.9 |
Top of page
Across-the-Board Reduction of 2% in Running Costs - Health Insurance Commission
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.3 | -0.3 | -0.3 | -0.3 |
Across-the-Board Reduction of 2% in Running Costs - Department
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.5 | -0.5 | -0.5 | -0.5 |
Whole of Government Telecommunications Savings Initiative - Health Insurance Commission
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.01 | -0.02 | -0.03 | -0.03 |
