Childcare is a fact of life for many working families. What does HR need to know about the subsidies available to employees? And what are the benefits of onsite child care?
Childcare benefits and rebates currently operate independently, although come 2018 there will be changes to subsidisation. Benefits are capped according to household income, however rebates aren’t. For the years 2017-18 parents are able to claim $7,613 per child.
In mid-2018, benefits and rebates will be streamlined into a single service. The aim is to provide maximum support to families most in need. Those who earn below $65,710 will receive a subsidy of 85 per cent and those above this threshold; earning up to $170,710, will receive a 50 per cent subsidy. Subsidies taper down for household incomes in excess of this amount; those earning $350,000 will no longer receive government funds.
Will changes to benefits and rebates lead to increased costs?
One consequence of the changes to benefits and rebates has been that childcare facilities may potentially increase their rates. Recent media coverage has reported one major childcare organisation plans to increase its fees by 11 per cent in response to the changes.
“Certainly there will be increased pressure out there for working parents,” says Prue Warrilow of Families At Work. “Some parents will have to decide if they can afford childcare at all and keep working, while others will have to use less child care and scramble around for informal arrangements through parents and grandparents.
“We did a survey last year of over 2,000 families that found 55 per cent of families said if they weren’t hitting the rebate cap they would be considering increasing their workforce participation.
“So, there’s a massive economic cost to Australia, to employers, to the economy.”
Warrilow says despite a lack of tax incentives for small and medium sized companies (SMEs) to offer onsite childcare, a greater number are using information and resource services like hers to help employers find adequate child care.
Onsite childcare: should more workplaces consider it?
Onsite childcare is the working parent’s dream. Not only does it eliminate the struggle to find a spot in a daycare facility and make the extra stop to and from work, parents can drop in and see their children anytime they like. Australian companies offering onsite child care include The Australian Broadcasting Commission, Westpac, Optus and American Express.
What does onsite child care look like?
Qantas provide onsite childcare via the ‘Joey Club’ in their Sydney, Melbourne and Brisbane headquarters. The centres are managed by KU Children’s services and offer early childcare for children aged 0-5. Four meals are provided daily or parents are able to drop in and take their children for lunch or afternoon tea whenever they wish. Parents are also afforded the opportunity to discuss anything relating to their children’s care with workers throughout the day. In addition to the childcare centre, there’s a breastfeeding room available to new and expectant mothers with sofas and privacy screening whenever mothers feel like they need a bit of chill out time. Payment is either made directly or taken out of the employee’s pay check, and the same rebates apply. At $128 for infant care per full day, the costs are on par with external long day care.
The Joey Club Sydney stated the ability of parents to look in on their children when they’re unwell puts them at ease. For employers, this means happier workers and less leave taken to attend to sick kids!
The cost for employers
While on site childcare may be attractive from a recruitment and retention perspective, actually providing this service requires an adequate space, furniture, supplies and in increase in insurance expenditure. According to an article in the Guardian last year, many employers are reluctant to set up this service because it adds an extra layer of pressure onto an already overloaded company.
“Companies don’t want to become a childcare operator,” according to Sydney Cove Children’s Centre, who run Optus’ childcare service. “There are regulations and risks involved, and specialised staff required, and they have enough to worry about managing their own businesses.”
On the other hand, US company Patagonia spend US$1 million annually on running costs for their on site child care facility, however they recoup approximately 91 per cent of these costs through fees, employee retention, productivity and tax breaks.
These factors all need to be considered when it comes to implementing an onsite child care facility, however if the capability is there, the benefits are obvious.