2015 Budget: Rebalancing Parental Support

As part of the 2015 budget, the government has announced multiple policy changes that will reduce benefits to some parents in an effort to encourage new mothers back into the workforce.

Parental Leave

The new policy, which is proposed to take effect on 1st July, 2016, will prevent parents from benefiting from claiming both the modest 18 week government parental leave offering and their employer’s parental leave scheme. The government scheme will be limited to $11,500, or where an employer scheme is payable, topping up by the government will only apply where the total payment due is less than $11,500.

Childcare Changes

The existing multiple benefits and rebates model (including the Child Care Benefit, and Child Care Rebate), are proposed to be combined into a single, means-tested subsidy, with additional payments accessible for disadvantaged and vulnerable children.

The simplified model, incentivises parents to work more hours, with those working 49 hours in a fortnight, receiving the full 100 hours of benefit (per fortnight), and families earning less than $65,000 a year receiving a benefit of up to 24 hours per fortnight of childcare.

Payment amounts have also been impacted, with those earning up to $65,000 receiving 85% back per child of the actual fee, or benchmark price (whichever is lower). This payment amount scales back as earnings are increased.

As with all government policy changes there are winners and losers, but the overall affect of this policy is to refocus the support to those working more hours.

The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.

Progressive Wealth Solutions is a Corporate Authorised Representative No.472911 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No. 466137.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>