More and more Australian parents now struggle with the decision of whether or not to return to work.
Either concerned whether they can afford the steep child care costs or too worried about the impact paid work could have on the Government benefits they may receive, the conundrum is becoming increasingly concerning for both parents and the Government.
The Childcare Affordability in Australia report, prepared by AMP and the National Centre for Social and Economic Modelling, shows how soaring child care prices are now “more than a full-time wage for many low income women” with some areas forced to pay $170 a day.
According to the report, “Child care prices in Australia have increased by 44.2 % in the past five years and, in the absence of additional Government assistance, family out-of-pocket costs have risen at the same pace.”
Of 87 expenditure categories monitored by the ABS, child care was only eclipsed by utilities and tobacco during the past five years.
With prices and subsidies both increasing at such strong rates the report suggests families are on average $4,352 out-of-pocket from the cost of child care.
Comparatively in regions across Australia, child care costs in Far North Queensland showed to be the most affordable, while least affordable areas were Sydney Harbour and the Western Australian mining regions.
The report lists what a mother from a low income family could lose by returning to work.
Here are the staggering results.
A mother from a low income family returning to work part-time would lose about 69% of her pay to income tax, loss of Government benefits and covering the cost of child care.
The low-income mum would keep less than a third of her pay, or $5.10 of her $16.37 hourly wage, when returning to work part-time. She would lose more if she went back to work full-time (40 hours), keeping only $4.55 of her hourly wage.
If this mother then decided to increase her hours to full-time she would lose around 75% of her pay for those extra 20 hours. Her hourly rate for these extra 20 hours would be just $4.09.
You can read the full report here.
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