As the government’s childcare subsidy ends and payments revert to pre-COVID status, nine in 10 Australians have said that it will be a financial burden to send their children to childcare, new research has found.
New nationally representative research from comparison site Mozo has noted that due to high financial strain, 73 per cent of families have considered reducing hours or taking their child out of daycare.
“In Australia, daycare is a major expense for working families, so the government’s free childcare program was welcomed with open arms. The average weekly cost of a child attending daycare for 24.8 hours is $246,” Kirsty Lamont, Mozo director, said.
The childcare subsidy, which was introduced to help families during the COVID-19 pandemic, was a windfall for many families, allowing them to increase savings or pay the bills, Mozo noted.
Mozo’s research also showed that unlike other schemes, only 1 per cent of parents were using the money for non-essential items such as a new television or laptop.
“This government initiative has put thousands back into the pockets of parents across the country, and for some, it has been a financial lifeline,” Ms Lamont said.
“With COVID-19 bringing a wave of job cuts and reduced hours to many Aussie workers, it’s little wonder that the reintroduction of childcare payments will have a sting in its tail for many families. Unfortunately, this may also have an unfortunate effect on childcare centres across the country as enrolments take a dive.”
Mozo estimates that with many parents looking to either reduce hours or pull their children from daycare, $150 million will be wiped out of the childcare industry each week.
With more than half of parents with children under six having their children in daycare, the change to childcare payments will have a widespread impact on Australian families, with approximately 1.4 million children attending childcare centres across the country.
Victorians were most likely to reduce childcare hours, with 44 per cent of parents considering reducing hours, while parents from NSW were most likely to completely pull their children out of daycare, with 59 per cent saying they were considering it.
“If childcare costs resuming is causing financial strain, the first step is establishing a clear idea of your incomings and outgoings. Mozo research found that 29 per cent of Australians had either no budget or only a rough idea of their finances in their head.
“If you’re flying blind with your spending, there’s every chance you could be struggling to meet your outgoings. Whether it’s crunching the numbers on a spreadsheet or using a budgeting app, there are many ways to balance the books,” Ms Lamont concluded.
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Article reproduced from Nest Egg by Cameron Micallef