Centrelink has slashed the 50 per cent childcare rebate paid to thousands of families by more than $279
CENTRELINK has slashed the 50 per cent childcare rebate paid to thousands of families by more than $279, even though parliament has yet to approve the cuts contained in last year's Federal Budget.
The Senate is now poised to vote down the cutbacks and the government welfare agency will have to repay parents the money, The Australian reports.
The torpedoing of the bill means the Gillard Government will have an $87 million hole gouged in its Budget.
And it will be forced to start indexing the rebate again, a move that will deliver tens of thousands of families hundreds of extra dollars in childcare rebates this year.
Independent senator Nick Xenophon has confirmed he will join the opposition to vote down the reduction in childcare subsidies because "he doesn't believe the Government should be increasing the cost of childcare".
His vote alone is enough to scuttle the bill but the Greens also say they do not support the bill in its current form, and they want the government to pay the rebate to parents fortnightly instead of quarterly.
"We will not be supporting this legislation until we see a guarantee that these fortnightly payments will be made to parents, so they are not forced to pay for the government's cut-backs," Greens childcare spokeswoman senator Sarah Hanson-Young said.
In last year's Budget, the Government announced plans to cut the 50 per cent childcare rebate from $7778 a child to $7500 a child from July 2010 and pause the indexation of the rebate for four years.
The measure is expected to hit about 19,000 families who have their children in full-time care or who pay high childcare fees.
But about 3000 families whose out-of-pocket childcare expenses have already exceeded this cap are already being hit by the cutback because the Department of Education, Employment and Workplace Relations implemented the cap before it became law.
The Australian has seen a letter sent to one parent that states "the rebate covers 50 per cent of your out-of-pocket expenses, up to a maximum of $7500 per year for each child in approved care".
A spokeswoman for Childcare Minister Kate Ellis said the department had implemented an "administrative cap" ahead of the legislation passing to prevent families accruing a debt to the government.
"If the legislation does not go through the Senate, they will be reimbursed," she said.
The defeat of the measure will be a boon for families who will now see their childcare subsidies increase as the payment will have to be indexed from July 2010, adding several hundred dollars to its value.
Debate on the bill began in the Senate yesterday.
Read more on this story at The Australian.
