Childcare means-testing to be tightened on wealthy

THE Turnbull government has put forward new reforms in a bid to attract enough Senate support to secure the passage of its welfare and family tax benefit bill.

The changes centre on a government compromise to reduce childcare subsidies to wealthier Australians, but still demand $4.2 billion in cuts to fund the $3.2 billion package.

Labor compromised on some savings on Monday night - after government amendments to ensure grandparents and single parents over 60 were exempt from cuts to the Family Tax Benefit Part B - but both it and the Greens remain opposed to the remaining government cuts that would pay for the childcare package.

The bill introduced on Wednesday by Social Services Minister Christian Porter and Education Minister Simon Birmingham represent another change to the original reforms proposed in then-treasurer Joe Hockey's first budget.

The bill essentially tightens means-testing on the new proposed childcare subsidy for the highest income earners, but still allows families earning up to $250,000 a 50% subsidy.

Senator Birmingham said that would taper down to a 20% subsidy for parents earning a combined $320,000 or more.

The changes would also result in slight increases to the youth allowance, youth disability support pension and Family Tax Benefit Part A for some people.

Senator Birmingham said the changes aimed to ensure "the more you work, the greater your entitlement", but still slow the rising cost of welfare.

Labor's families spokeswoman, Jenny Macklin, said the bill represented the same "savage cuts" to FTB Part B as proposed in the 2014 budget.

Mr Porter said changes were made in an effort to pass at least a compromise on the government's original plans. He said the government had lost about $74 million in savings due to the earlier deal with Labor, but the bill introduced on Wednesday would still pay for the childcare package and deliver a return to government.

Most crossbench senators were yet to reveal their positions on the bills on Wednesday afternoon.



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