Government ‘losing tax opportunities’
THE federal budget stands to gain from allowing families to claim childcare benefits for their nannies as it will force the system to become regulated and employees working underground will start paying taxes.
In its budget submission ahead of the May budget, the Australian Nanny Association argues that the government “is losing tax opportunities from unqualified carers receiving cash in hand payments”.
The ANA says if the family hires a nanny legitimately, they are being “double taxed as they pay PAYE on their income and then the nanny pays PAYE on the same wage”.
“Many nannies are missing out on super contributions, which in the long term will create a large financial burden on the government,” the body warns.
The ANA has called on the government to establish a nationally accredited and recognised qualification relevant to those who provide home based care services for families as well as providing a national “nanny register”.
It provides figures that show a family with two children spends so much in childcare fees that having a nanny costs the household the same amount.
“Long-daycare costs for parents with two or more children are comparable to the cost of employing a nanny; however, the rebate is only available for parents who use an approved centre-based care provider, family daycare provider or meet the limited criteria of the existing in-home care scheme,” the ANA says.
The push for recognition and taxpayer funding comes after Tony Abbott pledged to request a Productivity Commission inquiry into extending the childcare rebate to nannies if he wins the election, but the government argues it is too expensive and is not regulated.
It wants to extend a tiny existing government funded in-home care scheme – but ensure nannies are able to join it as it increases places offered to families.
The ANA argues that availability of subsidised care is in “crisis at the moment with childcare centres not able to meet the demand on their services, in particular for children under the age of two . . . Centres are reported to be reducing places available in this age bracket due to the new ratios being implemented, further deepening the difficulties families encounter in trying to find subsidised care for children in this age bracket.
“Families finding themselves unable to access the traditional funded models of childcare are disadvantaged and faced with turning to grandparents, unregulated backyard care or, at a larger cost, professional nannies.”
The ANA offers other arguments for its sector to be recognised, including that children cared for at home “are exposed to fewer illnesses”.
It argues that Australia is behind on this policy reform with countries including Britain and New Zealand having access to funding for home-based care. “Families are entitled to choice in the care they choose for their children. However, Australia’s current system does not support this”.
Responding to arguments that the home-based Family Day Care model, which attracts the rebate, should be extended, the ANA says it is not suitable for many families.
“It is not appropriate for night-shift workers to be taking their children out of their home early morning or late evening to drop them off at a family daycare home.”
