Media release

The ups and downs of childcare costs

For families on low or average incomes, the affordability of child care services declined during the 1990s, but following the introduction of the Child Care Benefit (CCB) in 2000, most families saw substantial improvements in childcare affordability. Over the last few years however, those improvements have been slowly eroding as child care fees have increased at a greater rate than average weekly earnings and the CCB.

A new report release today by the Australian Institute of Health and Welfare (AIHW) examines the affordability of child care services for five different family types using centre-based or family day care services, and defines affordability as child care cost as a percentage of net family income.

The report, Trends in the affordability of child care services 1991-2004, shows that sole parents who are studying and receiving Parenting Payment, and whose children are in centre-based long day care, devote more of their net income to child care than other family types.

'For this group, the cost of 40 hours per week of centre-based care for one child was 15% of their family's net income,' said Ms Cynthia Kim, Head of the AIHW's Children Youth and Families Unit.

'For the all other family types studied, 40 hours per week of centre-based care for one child cost approximately 8 to 9% of their net family income in 2004,' she said.

The report also revealed that affordability varied considerably with the type of child care being used.

In 2004, 40 hours of family day care cost a two-income family on a moderate income (1.75 of Average Weekly Earnings) 6.8% of their net income. The comparable figures for families using community-based or private long day care were around 9%.

'Family day care is clearly a more affordable option for all family types examined but particularly so for low income families,' Ms Kim said.

The new 30% Child Care Tax Rebate offers another avenue of assistance with the cost of child care. However, its impact on affordability has yet to be felt; this will occur, at the earliest, in the latter part of 2006.

28 April 2006

Further information: Ms Cynthia Kim, AIHW, tel. 02 6244 1213 or 0407 915 851.

For media copies of the report: Publications Officer, AIHW, tel. 61 2 6244 1032.

Availability: Check the AIHW Publications Catalogue for availability of the Trends in the affordability of child care services 1991-2004 report.