The federal government has refused to rule out means-testing the child care rebate to help deliver budget savings.

The government is reportedly considering an income test for the 50 per cent rebate, which is capped at $7500 a year.

The separate childcare benefit payment is already means-tested and cuts out once a family income exceeds $139,333.


If similar requirements were applied to the rebate, an estimated 64,000 families would miss out, saving taxpayers more than $500 million a year, New Ltd reported.

Federal Treasurer Wayne Swan refused to confirm the report.

"We will be announcing all of our measures and our plans on budget night," he told Sky News, noting that there has been a "hit to budget revenues".

"It's important that we make public savings," Mr Swan said.

CHILDCARE rebates are in the Budget firing line as the Gillard Government confronts a big hit to tax revenues.

A crackdown that would enforce a tougher work test for parents claiming childcare assistance or a means test for high-income earners is under consideration.   

Confidential Treasury figures confirm funding to the states for health and education are forecast to be slashed by up to $8 billion in the next five years, as a result of lower GST receipts.

Cautious consumers are spending less and the slump in GST revenues reflects the overall softness in the economy that poses a direct hit to the May 10 Federal Budget and will demand savage spending cuts.

Savings options under consideration include:

MEANS-testing the 50 per cent childcare rebate for the first time, for wealthy families with a combined income of between $150,000 and $200,000.   


APPLYING a new work test to the rebate, which pays families up to $7500 per child, limiting assistance for stay-at-home mums putting their toddlers in care.

REDUCING the hours that childcare families can claim without meeting a work/study test.

Stay at home mums can currently secure up to three days of childcare benefit (CCB) without meeting a work test. They can secure more than three days childcare if they can prove they work more than 15 hours a week.

The childcare rebate (CCR) does not have any specific hours of work that are required to claim the cash.

Women who are on maternity leave can also meet the work test for claiming both childcare benefit and the childcare rebate with thousands sending their toddlers to care for one or more days a week.

But the government is expected to tread carefully on this front, with working women not wanting to give up a prized childcare spot for a year, risking being unable to find another one when they return to work.

The Rudd government did move to introduce a defacto means test in the last budget, by reducing the childcare rebate cap from $7778 to $7,500 and freezing it for four years.

As the cost of childcare grows the rebate will stay the same, ensuring more high income families have out of pocket childcare costs that are not covered by the rebate.

But these measures would largely hit high income families where both parents work and children are in childcare four days or more a week.

These 2010 budget measures are already expected to cut the size of the rebate for 72,000 families by 2012.


Comments on this story

    *
     Working Mum of Melbourne Posted at 2:29 PM Today

         JUST BRILLIANT - thanks Julia and Wayne - I work 3 days per week, and study part-time, and my husband works full time. At present we are sitting just under the proposed threashold, but come tax time, and with a proposed 3%, in line with inflation pay rise, that employer is generously offering, I'm sure we will be over the $150K mark. I don't get any other CCB or Family tax A or B, have NEVER claimed centrelink in my life - so why target me? Answer: because I am an easy target - I'm unlikely to fight back, instead I'll just accept it and because I live in a safe Labor seat, even a vote against them wont help...sometimes I really wonder....

    *
     G. Sutton taxpayer of Woodvale Posted at 9:46 AM Today

         Surely its high time ALL Government hand outs were means tested, not just the childcare rebate ? Initially they were all brought in to meet the "needs" of the struggling family, now they all seem to have spread to almost anyone who applies as a vote buyer spree by political parties hoping to win Government !

    *
     Margaret of Yarra Valley Posted at 9:36 AM Today

         A family member who is on DSP, has two children, puts children in childcare. Then goes on facebook playing games for the rest of the day, or playing a game of basketball etc, then has the cheek to say she is so tired. She does not work. Stay at home mums who do not work should not receive childcare benefits. It is about bl--dy time a government is going to something about it.

Quote:



This is an ironic case, whereby the parent is eligible for DSP (which is very difficult to get in the first instance) and is also responsible for the care of 2 young (and by definition high needs) children...

A bitter and resentful family member pipes up and says that the disabled parent in question (who sounds clinically depressed) shouldn't be entitled to receive assistance for a small amount RESPITE CARE for her young children...

Clearly, the disabled parent isn't getting the kind of support that they need from their own family...

Equitist wrote on Apr 18^th, 2011 at 3:52pm:




And those who will scream about cutting this are the VERY
SAME people who begrudge those who NEED welfare, enough
to live on.

But, of course, it's OK for THEM, THEY'RE 'entitled', the
u/e, DSP's etc are not.

According to them, anyway.

My kids were toddlers at a time when I was forced to witness and experience the transition from the old to the new system...

When my older son started at pre-school, mothers and grandmothers worked there and the atmosphere was friendly, homey and family-like...

By the time that his younger brother went through, male bean counters were running clinical production-line Child Handling Centres and most of the mature staff had been replaced by bimbo teenagers who had NFI how to guide children in social situations...

I just heard on the morning news that it looks like the Govt is
going to fold on this one, and on some other spending cuts.

So, I have pretty-well been proven correct, in my suspicion that the
WEALTHfare will continue unchanged, or even be INCREASED,
but that WELfare recips will cop the brunt.

I knew the middle-class would scream when they looked like losing
some of their WEALTHfare cheques.

Just look at the way they carry-on about cutting the dole etc.
They think THEY should be getting that money, not the u/e
or pensioners.

And, of course, JuLIAR will happily pork-barrel to buy the votes
of the middle-class, while Toe-nail sits in the wings planning
EXACTLY the same middle-class vote-buying measures.

Mark my words, the hardest-hit in this budget WILL be the
poorest and most disadvantaged among us.

And the 'elitists' and the 'me,me,me' middle-class won't
care less, so long as they've been bribed enough.

What an effing joke this country has become.