The Senate passed the Family Assistance Legislation Bill 2016 with amendments in a late vote on Thursday night. The Turnbull Government succeeded in securing its long awaited $1.6 billion child care package with crossbench support.
In a deal struck with crossbenchers, the government agreed to ban childcare subsidies for families earning more than $350,000, a compromise which meant amendments from Labor and the Greens could be rejected.
The latter parties had hoped to amend the bill to increase the base entitlement for children's early education from 12 hours to 15 hours, and also to increase the household income threshold for the low-income entitlement from $65,000 to $100,000.
The government said the child care reform would benefit one million Australian families.
The child care sector and advocates had been vocal opponents of the amendments which would limit access for vulnerable families.
Childcare provider Goodstart Early Learning said without increasing the base entitlement from 12 to 15 hours, low-income families would be left worse off as a consequence of the childcare changes.
Early Childhood Australia CEO Sam Page said the package would make it harder for families in "precarious work arrangements", believing those in the situation where one parent is out of work for any period of time would struggle with the "activity test", she told the ABC on Wednesday.
"We know that at least 30 per cent of the workforce are in casual, precarious work arrangements. I suspect that, for women with young children returning to work, that's a higher percentage again," Page said.
"It's not unusual for parents who are returning to work to be in irregular or unstable work arrangements, for their hours to be fluctuating a lot, for them to have work at one point and not for a little while.
"And $100,000 per annum, with two parents working, or even a single-income household, is not a very high level of income. It's a modest income."
Education minister, Simon Birmingham, told The Project on Thursday night the reforms had been necessary to "fixing the broken childcare model which hurts and gets in the way of so many people working the hours they chose to."
"[The reforms] will replace a current mixture of complicated different payments with one new child care subsidy that sees an increased investment of more than $1.5 billion by the Australian Government, but importantly sees increased levels of subsidy going to the lowest income, hardest working Australian families," Birmingham told Sky News on Thursday.
"A low income family will see their rate of subsidy increase from around 72 per cent, to about 85 per cent, which will mean they can access a day's worth of child care for about $15, and that will make the world of difference to their choice, to be able to work they hours they want, the days they choose."
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