Report recommends merging childcare payments and subsidies - Toowoomba Chronicle

THE Abbott government has been told to merge child care rebates and subsidies into a single childcare rebate to meet 30% of the costs parents pay.

A report from the Productivity Commission has recommended the changes, which would cut rebates from the current level of 50% of costs of child care.

It also noted the current system does not meet the needs of all families and that the cost of the childcare system was rising at "an unsustainable rate for taxpayers".

Commissioner Dr Wendy Craik said means-testing the rebate would help more low-income families pay less for childcare, but it could come at a cost for middle-income earning families.

The report also suggested that nannies be eligible for child-care subsidies, but not au pairs, and government funding for children with disabilities be increased.