Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98

The 1997-98 Budget measure injects an additional $11 million over four years to reform school age care.

In this section:

Fact Sheet 13

Improved affordability for families with children requiring school age care

The 1997-98 Budget measure injects an additional $11 million over four years to reform school age care. The measure will significantly improve affordability for about 70,000 low and middle income families using Outside School Hours Care (OSHC) services and move towards a more equitable system of Childcare Assistance for school age children using centres, Family Day Care and OSHC services.

School age care has been the subject of an extensive two-year pilot and research program. Research found that affordability is a key issue for families, particularly low income families.

Reforms redirect all Childcare Assistance funding provided for school age care in centres and Family Day Care; OSHC operational subsidies and Childcare Assistance (from 1 January 1998); and existing vacation care grants to the States (from 1 February 1998), to a new income tested Childcare Assistance for all school age children, to be implemented from 1 January 1998. While families using centres and Family Day Care for the first time from 1 January 1998 will receive less Childcare Assistance than existing families, this measure will benefit 70,000 families using Outside School Hours Care.

A higher rate of Childcare Assistance will be provided for families using Outside School Hours Care services, and their eligibility for Childcare Assistance will be extended to the same income cut-off as Family Day Care and centres (up to $65,743 per annum for one child, instead of the current OSHC Childcare Assistance cut-off of $27,125 per annum). The family's percentage entitlement for Childcare Assistance will be applied to the new school age ceiling of $1.95 per hour per child. While this ceiling is lower than that currently applying to families using Family Day Care and long day centres, it is substantially higher than the current maximum benefit of $0.73 per hour per child paid to families using Outside School Hours Care services.

This measure will:

make subsidies for school age children more equitable regardless of the form of care used. The same Childcare Assistance ceiling will apply whether the school age child is in a centre, Family Day Care or an Outside School Hours Care service.
mean that existing school age children in centres and Family Day Care will retain all their current entitlements while they continue to use the same service.
introduce the new school age rate for children starting new care arrangements in centres and Family Day Care, with relevant part-time loading continuing to apply in Family Day Care.
benefit an estimated 19,000 families currently receiving Childcare Assistance in Outside School Hours Care services and an estimated 51,000 families currently using OSHC services who will become eligible for some Childcare Assistance.

Out-of-pocket costs for families with one child in Outside School Hours Care services for 15 hours per week

Family income	Current out-of-pocket costs	New out-of-pocket costs*	Difference in out-of-pocket costs
$21,000	$18.30	$10.20	$8.10
$35,000	$29.95	$15.45	$13.80
$55,000	$29.95	$26.55	$2.70
$67,000	$29.95	$34.05	($4.80)

* Based on current average fees of outside school hours care services increasing by around $1.15 per 3 hour session of after school care.
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Other components of school age care reform package

Funding of $12.2 million over four years will be available from 1 July 1997 to enable existing OSHC services to obtain financial and restructuring advice to assist in the transition to the new system. Funding also includes a minor capital upgrade component for services needing assistance to ensure ongoing viability or to amalgamate with other services.

Establishment funding totalling $20 million over four years has been set aside to assist new services during the first two years of establishment. Research shows that new OSHC services generally require a lead time of up to two years to build utilisation to viable levels. New community-based services will receive establishment funding for approved places for their first two years of operation.

Establishment of new OSHC services will be delayed until 1 January 1998 to enable these services to commence on the new system.

Eligible Outside School Hours Care services in rural and regional Australia where no alternative care exists within a reasonable distance will be supported through disadvantaged area subsidies totalling $15.7 million over four years, to ensure working families in these areas do not lose access to care.

Contact: Margaret Carmody, Assistant Secretary, Policy Analysis & Planning Branch, Family & Children's Services Division, Phone: (06) 289 3744