6553.0 - Survey of Income and Housing, User Guide, Australia, 2013-14  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 04/09/2015   
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CHILD CARE USE AND COST


Many parents and caregivers across Australia utilise formal and informal child care to support labour force participation and education and training; to meet children's development needs; or to supplement care from the primary caregiver for other reasons. Recognising the increased importance of child care to support these outcomes, the Australian government subsidises child care for most households. Child care subsidies are a social transfer in kind that many parents and caregivers rely upon in order to afford the consumption of child care services.

Data on child care including usage, costs, and barriers to labour force participation due to child care related reasons were included in the SIH for the first time in 2007–08. These topics were added to the SIH to meet user requirements and provide data items examining the interactions between child care use, income and labour force participation. These data items are not intended to provide a detailed exploration of child care: this can be found in Childhood Education and Care, Australia, June 2011 (cat. no. 4402.0) and National Early Childhood Education and Care Collection: Concepts, Sources and Methods, 2012 (cat. no. 4240.0.55.001). Child care subsidies provided to households by the government (including the administrative overhead), is treated as a social transfer in kind.


DATA COLLECTION

Child care information was collected from households containing resident children aged 0–12 years. The information was obtained from an adult who permanently resided in the household and was deemed to be the 'best person' able to provide this information. In the majority of cases this was the child's parent, step-parent or guardian.

Questions about type(s) of child care used (formal or informal), pattern of care with other parent living elsewhere, school attendance, preschool attendance and the cost of care were asked in relation to each child aged 0–12 years in the household. If formal or informal care was used by a child in the last four weeks, further questions about the cost of care, child care benefit, child care rebate and hours used were asked for each episode of care (that is, each type of care for each child).


FORMAL AND INFORMAL CHILD CARE

Formal care is defined as regulated care away from the child's home. The main types of formal care are before and/or after school care, long day care, family day care, occasional care and vacation care.

Informal care is defined as non-regulated care, arranged by a child's parent or caregiver, either in the child's home or elsewhere. It comprises care by (step) brothers or sisters, care by grandparents, care by other relatives (including a parent living elsewhere) and care by other (unrelated) people such as friends, neighbours, nannies or babysitters. It may be paid or unpaid.

More than one type of care could be selected, therefore some items are multiple response in nature. An explanation of how to use these multiple responses will accompany the release of the CURF to assist microdata users.


UNMET CHILD CARE NEEDS

Data on barriers to labour force participation due to child care related reasons was collected from parents and caregivers of children aged 0–12 years in the selected household who were unemployed, did not have a job or worked part time. The data collected includes: whether people would like a job if child care was available; whether they would like to work more hours if child care was available; whether child care prevents them from working/working more hours; and what are all the reasons and the main reason that unmet child care needs prevent them from working more hours or working at all. This detail is available at the person level.


CHILD CARE HOURS AND REFERENCE PERIODS

Data was collected on child care used in the four weeks prior to the personal interview, and as such most data items relate to 'last four weeks'. In addition, data is available for care types used 'in the last week' where the number of hours of care used last week was one or more.


CHILD CARE COSTS AND SUBSIDIES

Data on child care costs and subsidies output from the SIH are a combination of modelled and reported data. While child care hours and costs are output as reported, subsidies are modelled for all eligible families, and where the modelled data was higher than the reported data, the modelled data has been output. In 2013–14, the output items were revised to provide information on child care costs in a manner either fully exclusive (gross), or fully inclusive (net) of child care subsidies.

Cost of care

The gross cost of child care (not including the receipt of subsidies) was collected in the 2013–14 SIH. Estimates of CCB and CCR are collected from the child care questions, however there has been a significant gap between the reported number of households receiving assistance and the total value of that assistance, compared to administrative records. In SIH 2013–14, CCB and CCR have been modelled to improve the estimates of these payments. Total cost is output at three levels: Child care, Income Unit and Household, with a slight variation in the concept between the levels.

  • Child care level - the total cost of care is directly the cost as reported for that care, irrespective of child care subsidies. No adjustments are made.
  • Income unit level - the total cost of care is the sum of child care subsidies and out of pocket costs (includes informal care).
  • Household - the total cost of care is the sum of child care subsidies and out of pocket costs (includes informal care).
The income unit is the preferred unit of analysis for child care. Resources at the income unit level are usually shared between partners in a couple relationship and with dependent children. However, there are limitations on the data provided at this level. At the income unit level, child care data are aggregated from lower levels and as such may apply to more than one child in an income unit. For example, 'Total number of hours of formal and informal child care income unit usually uses each week' is equal to the sum of all hours used by all children in the household.

Child Care Benefit (CCB)

CCB is assistance in the form of a payment made by the Australian Government to help with the costs of child care for families who use either approved or registered child care. The scheme is means-tested and allocates an hourly amount that can either be remitted to child care consumers after child care has been paid, or child care organisations can receive the CCB from the Government, thereby reducing the child care fees payable by the amount of the benefit. Where the CCB is paid directly to providers, respondents may be unsure of the amount at interview. This amount may also fluctuate over the course of the year as family income estimates and care usage patterns may change.

The CCB data that is output from the SIH is calculated by modelling the CCB entitlement for each family on the basis of means information (e.g. income), child care hours and types, and aggregate information about administered benefits. The modelled information is compared with reported CCB, and the higher amount is selected for output.

Child Care Rebate (CCR)

The Child Care Rebate (CCR) is a payment to help families using approved child care for work, training or study related reasons. CCR reimburses 50% of out-of-pocket child care costs (after CCB is taken into account), up to a maximum of $7,500 per child per year for approved child care. In July 2011 Child Care Rebate was made receivable as a direct payment to child care providers. The child care items in the 2013–14 SIH collection instrument was updated to accommodate this change.

CCR entitlement is also modelled for all child care consumers, similarly to CCB. It should be noted that the majority of child care consumers do not reach the maximum amount of CCR, and therefore receive CCR for the whole financial year. However, a small number of child care consumers do reach this cap, and if interviewed after that point in time, may accurately report nil CCR. For the purposes of SIH, this situation is addressed by annualising the modelled CCR entitlement for the parent or caregiver, and replacing the reported amount with a modelled weekly amount.


COHERENCE WITH PREVIOUS CYCLES AND ACCURACY

There have been many improvements to the child care modelling and output data for 2013–14, which include increased accuracy of subsidies output for income units and more clearly defined output items. For these reasons, the data on subsidies and out of pocket child care costs from 2013–14 are not directly comparable to the data from 2011–12. Changes between 2011–12 and 2013–14 are attributable both to real world changes and improvements to data quality. In addition, there remains a significant gap between the reported number of households receiving assistance and the total value of that assistance, compared to administrative records. This undercoverage should be taken into account when utilising child care items from the SIH.