Child Care Benefit and Child Care Rebate

6.7 CCB and CCR are usually only paid to parents and carers who satisfy a work/training/study test. Grandparents who raise their grandchildren do not need to satisfy the test to be eligible for these benefits. If they were also required to satisfy the test, it might be argued that this would encourage these grandparents to participate in the paid workforce or in voluntary work. This section briefly considers CCB and CCR, and concludes that family assistance policy should not be changed to require grandparents to satisfy the work/training/study test to be eligible for CCB or CCR.

6.8 CCB is an income-tested payment that assists eligible parents and non-parent carers with the cost of child care.^[9] Other CCB objectives are to provide incentives for parents and carers with low and middle incomes to participate in the workforce and community, and to support parents and carers to ‘balance work and family commitments’.^[10] CCB is available to parents or carers responsible for child care costs when the children attend approved child care services.^[11]

6.9 Most parents and carers and their partners must meet a work/training/study test to receive up to 50 hours of CCB a week when children are cared for by approved child care services. To satisfy the test, parents and carers must undertake 30 hours per fortnight of work (including voluntary work in certain circumstances), training or study. If they do not meet this test, they may receive CCB at a lower weekly limit of 24 hours.^[12]

6.10 The work/training/study test does not apply to grandparents who are the ‘principal carers’ of a child in approved care.^[13] Grandparent principal carers may therefore receive up to 50 hours weekly CCB without meeting this test.^[14] ‘Principal carers’ are sole or major providers of ongoing daily care who make day to day decisions about the child.^[15] ‘Grandparent’ is defined broadly to mean the ‘natural, adoptive or step grandparent or great grandparent of the grandchild’. It also includes a grandparent’s or great-grandparent’s current or former partner.^[16]

6.11 Parents and carers who are eligible for CCB are also eligible for CCR, even if their CCB entitlement is nil due to their income.^[17] CCR is not income tested. It covers 50% of out-of-pocket child care expenses for approved child care up to a maximum legislated amount per year (currently $7,500 per child).^[18] The policy aims of CCR are to:

• assist families with the cost of approved child care,

• provide incentives for families with dependent children to participate in the community, and

• support parents in balancing work and family commitments.^[19]

6.12 As for CCB, applicants and their partners must meet a work/training/study test to be eligible for CCR. Applicants and their partners are not required to meet a minimum number of hours to satisfy this test—they need only have a work, or work-related commitment (as provided for in the legislation and the Family Assistance Guide) at some point during the week for which CCR is claimed.^[20] As for CCB, grandparents and great-grandparents who are principal carers are not required to meet this test to receive CCR.^[21]

6.13 The ALRC does not consider that grandparents’ exception to the work/training/study test for CCB and CCR should be removed in order to extend a workforce incentive to mature age cohorts of carers. In consultations, stakeholders did not express support for such a reform. The Brotherhood of St Laurence stated in response to this issue that the ‘aim of legislation should be not to penalise older Australians who are not in the workforce but to ensure there are not barriers to their participation’.^[22]

6.14 In the ALRC’s view, removing the exception may dismantle a source of financial support for grandparents raising grandchildren. This is undesirable given the reasons that children may be in grandparents’ care, the significant benefits that flow from such arrangements and the financial impact of raising grandchildren. Additional expenses include ‘clothing, bedding, home modifications and perhaps even extensions’.^[23] Further, the ALRC has been advised that the exception for grandparents from the work/training/study test has been considered international best practice.^[24]