It was announced in August 2019 that parents can expect to pay less for preschool from January 2020, as subsidy amounts increase across all eligible income tiers and subsidies will be extended to 30,000 more families.

But some are concerned that the subsidy enhancements will be eroded by fee increases, or that centres are profiteering from the subsidy enhancements.

Factually debunks some of these misconceptions.

Preschool Fact 1

The number of centres raising full-day childcare fees in 2020 is comparable with previous years.

In addition, there are fee caps set by the Government for Anchor Operators (AOPs) and Partner Operators (POPs). Only AOP and POP centres that are charging below the caps can raise fees.

Preschool Fact 2

Preschools adjust their fees from time to time, to keep up with operational costs. They are required to inform ECDA of any fee increases by 1 September of the preceding year.

Of the childcare centres raising fees in 2020, the median fee increase is within 5% - or $35, in absolute terms. Most centres had informed ECDA of their fee increases before the subsidies were announced.

In fact, industry median fees for full-day childcare have remained constant at $856 per month since 2016, despite fee increases at some centres.

Preschool Fact 3

The monthly household income ceiling for the Additional Subsidy will be raised from $7,500 to $12,000 from January 2020, benefitting significantly more families.

Families who qualify for the Additional Subsidy can see their maximum subsidy increase by up to $240 more per month for full-day childcare, compared to today.

Preschool Fact 4

To make quality preschool education more affordable and accessible, we will increase the share of government-supported preschool places from just over 50% today to 80% by around 2025.

Over the medium term, we aim to lower fee caps of government-supported preschools, so that working families will pay around the equivalent of primary school fees plus after-school student fees, which is currently around $300 per month, before means-tested preschool subsidies.

As a start, we will lower fee caps for POP centres when the new 5-year term for the POP scheme begins in 2021, which will also lower industry median fees.