What's going on with childcare?

WHAT CHILDCARE SUBSIDIES CAN PARENTS RECEIVE?

CHILDCARE REBATE

* not means tested

* covers half of out-of-pocket expenses

* capped at $7500 a year

* paid either to parents or to childcare centre

* at least one parent has to do work, job seeking or study - no minimum hours

CHILDCARE BENEFIT

* means tested

* maximum rate paid to families on less than $42,997

* not paid to families earning more than $149,597 (one child), $155,013 (two children), or $175,041 (three or more children)

* paid either to parents or to childcare centre

* covers up to 24 hours a week for families where neither parent is working, job seeking or studying

* covers up to 50 hours a week if at least one parent is in work, job seeking or studying for 15 hours a week

* maximum $205 per week in 2014/15 ($4.10 per hour) for children below school age

* children must be immunised

* Extra assistance is available for grandparent carers, children at risk of serious abuse or neglect, and people receiving single parent payments, Newstart, youth allowance and some other benefits

WHAT DID THE PRODUCTIVITY COMMISSION RECOMMEND?

* combine all these into a single childcare subsidy

* means tested

* families on $60,000 or less get 85 per cent of benchmark rate

* tapers off to $250,000 where families get 20 per cent of benchmark rate

* estimated benchmark rate $7.41 per hour

* paid directly to childcare centre

* covers up to 50 hours per week if parents are in work, job seeking or study for 12 hours a week

* covers up to 10 hours per week for single parents who don't meet activity test but receive single parenting payment

* extend subsidies to approved nannies and similar in-home care

WHAT IS THE GOVERNMENT LIKELY TO DO?

* $246 million two-year trial of subsidies for nannies where families earn less than $250,000 with priority to low earners, shift workers and regional families

* combine subsidies into single, means-tested payment

* parents would have to meet activity test - be working, job seeking or studying

* paid directly to childcare centre

* top threshold covers nearly 50 per cent of benchmark rate for families on $250,000 or more

* covers up to 12 hours per week for parents who don't meet activity test

* children must be immunised