EXP: What's in the childcare package

WHAT'S IN THE FEDERAL GOVERNMENT'S NEW CHILDCARE PACKAGE?

* A new means-tested childcare subsidy for low to middle-income families replacing the existing childcare benefit and rebate. Starts from July 1, 2017.

* The subsidy will be subject to an income and activity test. Payments will vary based on how much parents earn and work, study or volunteer in a fortnight.

* Payment will cover about 50-85 per cent of fees depending on annual incomes.

* A bonus subsidy for disadvantaged families, such as those with children at risk of abuse or neglect; those experiencing temporary financial hardship; grandparent carers on welfare.

HOW WILL BE PAID:

* Directly to childcare providers.

HOW YOU QUALIFY?

* Parents have to work a certain number of hours in a fortnight. Generally if you do not work or study, you get nothing.

* Families with an annual income of $65,000 or less will get the maximum subsidy of 85 per cent of childcare costs. If they don't meet the activity test they will be subsidised for 24 hours of childcare a fortnight.

* Families on $170,000 incomes, tapers to 50 per cent of costs.

SUBSIDY BASED ON HOURS OF ACTIVITY FORTNIGHTLY:

* Fewer than eight: 0

* 8-16: 36 hours

* 16-48: 72 hours

* 49 or more: 100 hours

WHERE'S THE MONEY FOR IT?

* The new subsidy will cost $21 billion over 2017-18.

* But savings from changes to the family tax benefit reap only $4 billion.

WHY IS THE GOVERNMENT DOING IT?

* Wants more women in the workforce and reduce dependency on welfare payments.

SUBSIDY RATES ARE CAPPED AT:

* $11.55 an hour for care provided by a centre-based day care service

* $10.70 for care provided by a family day care service

* $10.10 for care provided by an outside school hours care service

SOURCE: Federal government.