Regional Market Outlook on Child Care Services
In Australia, for families with a child under the age of four, the use of formal childcare has increased by 18–20 percent over the last few years. Previously, 50 percent of child care fees would be received as rebate by parents (CCR). This will support parents to afford their child care to an extend.
Usage of daycare facilities has been increasing in Australia and around 78.4 percent of children who used approved child care used services located in major cities.
- NSW (33.5 percent) had the largest share of children attending approved child care, followed by Vic. (24.9 percent) and Queensland (22.6 percent)
- Studies show that the average time that a child spent in approved child care was 24.8 hours per week
- About 34.5 percent of children using long day care used an average of 20–29 hours per week
- Across Australia, nearly two-third (65.1 percent) of families using approved child care chose long day care and around one-third chose outside school hours care (35.2 percent)
In Australia, new child care system has been implemented since July 2018. The CCB and CCR has been replaced with a single payment, which will be based on the activity hours and annual family income details.
- The CCR (which covered 50 percent of childcare fees up to an annual cap of $7500) and the CCB is replaced with the new subsidy
- This Subsidy is based on the activity hours (this includes paid work including leave and maternity leave, study and training, unpaid work in the family business, looking for work, volunteering, self-employment, others on a case-by-case basis
Innovations and Technological Trends
Australia: Pilot Subsidy Program
- Australia has introduced a pilot program, which subsidizes families to use nannies, as people living in remote areas struggle to reach group childcare
- This shows that local culture and the needs of communities are respected
- There are nanny platforms, which help to find nannies for child care. E.g., Kids club Australia
Intergenerational Care Settings
- In Japan, a new initiative of older people’s care and childcare is being provided in the same location. This uses a small-size, multi-care approach
- The benefit is that children benefit from increased social interaction with older people
- There is relatively low use of technology in the child care industry
- There are day cares, which provide computer-based education for their children
How does it work?
- The Australian government is offering partial subsidies for parents using nannies
- Regional provider organizations working under contract for the government are matching eligible families with nannies
- These organizations are also responsible for paying the nannies, and for collecting fees above the subsidy level from the parents
Some large day care operators have instituted virtual private networks and company-wide management information systems, including customer relationship management.
The payment terms depend on the type of engagement with the child care facility. If it is an engagement with the external child care center, the employer or employee either pay the full childcare fees directly or else the a portion of fees is covered by employer, in terms of money or in terms of other facilities.
Fully Paid by Employers
- This method is a salary sacrifice method
- In this child care fees can be deducted by an employer from an employee’s gross salary and given to the child care facility
- This applies when a child care facility is provided by the employer on site or at an approved location nearby. Employees may get tax exemption for this
- In this, the employer contribute a portion of the child care fees. The percentage can be decided by the employer, the rest is paid by the employee
- There would be volume-based discount for companies’ staffs, based on the employee size
Fully Paid by Employee
- The parents pay the complete child care fees
- Employers provide A certain amount to the childcare facilities for kids lunch, snacks, games, etc.
- This can enable a lesser fees for The employees of the company