With the new Childcare Subsidy would you be better off with a Nanny?

The single Child Care Subsidy takes effect on 2nd of July 2018, completely replacing the existing Child Care Benefit and Child Care Rebate Schemes. The new system is said to improve benefits for low income earners, but may significantly reduce benefits for high income earners.

The amount of new Child Care Subsidy you will be entitled to will depend on:

  • How much ‘recognised’ activity you and your partner undertake each fortnight. The entitlement is based on the lesser activity figure for a member of a couple.
  • Combined family income
  • The child care fees you pay (hourly rate caps apply for each service type).

With these changes about to take place, it’s important to weigh up the options available to you, but where do you start? How do you know if you should stick to day-care, switch to a nanny or maybe a little of both?

Here’s a scenario we tested out for a family earning $300,000, with 2 children in day care full time and a third child in before and after school care 5 days per week.

Child-Care Out of Pocket Fees:
Typical childcare centres charge between $80-$192 per day, in our scenario we have used a median cost of $150 per day.

In this scenario the family would have a $63,088 Out-of-Pocket expense for their child care needs.

A family in the same scenario but earning $250,000 would have $60,620 out-of-pocket.

Click on the link to calculate your own Out-of-Pocket expenses with the new childcare subsidy https://www.childcaresubsidycalculator.com.au

Nanny Out-of-Pocket Fees:

A Nanny will cost between $25 – $35 per hour. So for 10 hours of care a day, 5 days per week, a family would be looking at $1250 – $1750 per week. The median cost would therefore be $72,000 per year for 48 weeks of care per year.

Using the examples above, the cost of a nanny is more than the Day-Care out of Pocket expense. The difference is about $165 per week more for a nanny. However, there are a number of resounding benefits both the children and parents gain from having a nanny for families with two working parents:

  • Provide dedicated and personal care from the same individual which gives your children more certainty
  • Follow your child’s individual routines already put in place, you can control the schedule and tasks
  • Quality one on one time to help develop skills and a caring bond
  • Flexibility; Inter-state travel, super early mornings or late evenings means day-care may not even an option for you
  • Opportunity to find the right person who you feel most comfortable with
  • Park, playgroup or educational excursions are on the agenda every week
  • Prepare nutritious meals for your children taking the stress out of mornings and evenings for you
  • Plan fun and creative learning activities such as arts and crafts
  • Clean and tidy any child related areas in the house
  • No more running to pick up kids from day-care and after-school care before the deadline

If you’re wondering what the best option is for you, or what sort of Nanny would best suit your needs and the costs involved, please reach out to us and we can help you navigate the new subsidy and find the best outcome for your family.