What can you do today to better afford your nanny?
Bar the Fairgodmother walking over to hand over some cash, singing "Bibbideebobbadeeboo" - finding money in our daily budgets for a nanny is our Mum-derella problem.
It's the conversation of all conversations for any parent struggling to balance our budgets! If you're lucky enough to have secured an elusive spot in childcare centres, once you hit 2-3 children, it ends up being more affordable to have them cared for by a nanny. At the end of the day, we all know it needs to make financial sense for you to go to work and the affordability of your children's care is going to dictate this.
Research of 262 working women, commissioned by the online businesswomen's network group Sphinxx, found that children and careers fail to mix.
Key findings:
48% of respondents said childcare costs had hit their career, but not their partners (71.6%)
52% of respondents qualified for the rebate, but 92% still rate childcare costs as important or very important political/ election issue
86% would give their vote to the party with a tax-deductible policy on childcare 48% say cost of childcare has impacted upon career to date
62% say the cost of childcare has led to a reduction in their working hours
74% say it’s difficult or very difficult to find available quality child care
Sobering stats, but realistic in many cases, isn't it?
Today, you can deduct tax for:
- Training
- iPads
- Mobile phones
- Work wear, even...
But, try to deduct childcare costs - the most important and substantial cost for any working parent trying to contribute to the workforce - and you're greeted by a "heck-to-the-no, girlfriend!" finger-snapping wall.
Recent discussions in the news around Tony Abbott's Nanny Plan - expanding the childcare rebate to cover in-home care provided by nannies - are further fuelling the already-hot debate on how to make childcare options more accessible for the working parent.
While he's happily riding on a wave of female voter interest at the moment - this is all fairy-pie-in-the-sky conjecture until next year's election.
So, let's cut to the chase. What options do we have right now? A little digging around has surfaced a few morsels for consideration:
Approved Childcare for Childcare Benefit Payments
Nannies can register themselves with the Family Assistance Office to become registered carers so you can be eligible for the Childcare Benefit payments. He/She must just be over 18 years of age, an Australian resident (for tax purposes) and have a tax file number of their own.
Nannies who meet the eligibility criteria need to take proof of their age and identity to their local Centrelink or Family Assistance Office to register for an individual child care provider status.
Once your nanny has registered he/she will be allocated a CRN (Childcare Registration Number), which must be used on all invoices to employers. Employers use these invoices/receipts for claiming Child Care Benefit or Rebate.For more information - visit the FAO site: http://www.familyassist.gov.au/payments/family-assistance-payments/child-care-benefit/registered-care.php
Just remember though, that in reality - many nannies who do work part-time prefer cash in hand and might or might not want to be subject to income tax. But this is something you should discuss with them openly right at the beginning to gauge their position. It would certainly be more attractive for more full-time nannies with 4-5 day roles who would rely on your job as an income.
Hiring a Nanny as an Employee to Claim Tax Deductions on Wages
If you run a business as an ABN holder, you could put your nanny on the staff in the business. The business claims the wages as a tax deduction. For larger companies, many out there pay the nanny's salary as a fringe benefit to company directors and senior staff, and the tax is avoided here also.
Of course, with any staff hire, you'll need to ensure that you adhere to contractual agreements, income tax, superannuation, leave, sick/holiday pay and insurance guidelines as required of any responsible employer.
If this option appeals to you, speak to your tax and HR advisors for further information.
Until we land the motherlode of solutions - check out these options for yourself if the shoe fits. And by golly, I certainly hope you'll feel like Cinderella soon!



