Grandparent carers: What payments are available?

Looking after the grandkids whether it’s on a full-time basis or every now and then as a childcare alternative is a true blessing, but despite the joy it brings, it can also leave you facing financial hardship.

Thankfully though, there are measures in place to support grandmas and granddads who are the primary caregivers for the little ones. Additionally, there has been talk of potential new government subsidies to include those who take on caring duties for their children instead of going down the path of formal options.

What does the government offer?

Early last year changes were made to child care assistant payments in Australia with the previous two options – the Child Care Rebate and the Child Care Benefit – replaced by a single Child Care Subsidy payment. Grandparents and great-grandparents who are the main carers of their grandchildren can benefit from the funds, but how much they get depends heavily on their circumstances.

Under the government’s $8 billion childcare subsidy package, parents can claim up to $10,000 a year per child for formal childcare costs, depending on their income. Grandparents who have full custody of a grandchild, or look after the child at least 65 per cent of the time, are also eligible.

Who is eligible?

For a grandparent to be eligible for the Child Care Subsidy payment they must look after the child for at least 65 per cent of the time. They must also have “substantial autonomy” over the day-to-day decisions about that child’s care, welfare and development. Essentially, this means grandparents who care for the grandies part-time after school are unlikely to be eligible.

What payment can grandparent carers receive?

For grandparents who are eligible, the amount they’re entitled to can vary greatly depending on their individual situation. Those who are on an income support payment through Centrelink (such as the Age Pension, Disability Support Pension or even Newstart) have access to a considerable amount of subsidised child care through the Additional Child Care Subsidy, depending on their weekly allowance.

They are entitled to 100 hours of subsidised child care per child per fortnight, for which the amount of subsidy they receive is “equal to the actual fee charged by the child care service, up to 120 per cent of the Child Care Subsidy hourly rate cap, whichever is lower”. The rate cap varies depending on whether families use centre-based day care, family day care or outside school hours care.

Grandparents who are not on an income support payment but are still the primary carer also have access to 100 hours of subsidised care per child per fortnight. But the percentage of cost that is subsidised is determined by the family’s annual income. For example, if they’re relying solely on an income from their superannuation fund, it will depend how much income is being drawn down.

What about grandparents who take on childcare duties?

If you’re a grandparent who has taken on caring duties, as an alternative to formal childcare, there could be good news on the horizon. Earlier this month it was revealed that a significant number of mothers have urged the government to extend subsidies to informal caregivers, such as nans and granddads. A report released recently from the Centre of Independent Studies, showed two-thirds of working mothers would rather have their kids looked after by grandparents for payment – even if that meant the subsidy was less.

Working mothers now want the current Childcare Subsidy Package to include all grandparents who help out. According to the survey of 521 working mums, 66 per cent would be okay with less subsidy if they could spend it on more informal care. Fiona Mueller, co-author of the What Do Parents Want? report, said majority of parents thought formal care was too expensive and inflexible.

“50 per cent of the 521 working mothers surveyed nominated a first preference other than formal childcare, and instead would prefer informal arrangements such as grandparents, friends and family daycare,” Mueller said. “Only 26 per cent of mothers disagreed with the idea of government subsidies being available for informal care, while 66 per cent would prefer this flexibility even if it meant receiving a lower subsidy overall.”