In the 2015 Federal Budget the Government announced an initiative designed to encourage parents to return to work or stay in work rather than stay at home with their children. The measures, which are set to be introduced next year, favour working families and may see families with one or more stay at home parents losing access to child-care related subsidies unless they undertake volunteer, paid work or study.
Returning to work after having a baby, or having taken time off to raise children can be stressful with the need to balance work or study commitments, family responsibilities, time and finances.
When returning to work there are many important things that parents need to consider. When it comes to the care of children, these can include:
- What type of care should your child or children have? Child care comes in many forms. Long-term care and after hours care facilities are available as well as other options such as a nanny, au-pair arrangement or leaving kids to be cared for by family. Not all options will be available or be subsidised.
- Should you put kids in care near your home or work?
- Are there vacancies in your choice of child care? You may prefer a particular centre, but with high demand it can be hard to get into child care centres. It can pay to place your child on a number of local centre waiting lists and keep in touch with these centres to monitor as vacancies come up.
- What arrangements will your employer offer – are job sharing, part-time work or working from home arrangements available to you?
- How much will child care cost? Costs can range typically from $80 to $170 per day.
- What government assistance is available to you?
- What is the net benefit to you as a result of returning to work? High costs of cover and limited child care rebates and subsidies can sometimes result in there being a very limited benefit in your pocket (after tax) of returning to work. For many stay at home parents, it can be hard to justify time away from their children if the monetary incentive isn’t there.
The care of the children is just one aspect that will need to be considered when it comes to returning to work. Other financial and personal considerations for those returning to work include:
- Reviewing your budget. A change in income and expenses will necessitate a review of your personal budget. You will need to take into account your new income, child care costs and the child care subsidy that you may receive. If you have an amount left over at the end of each pay-check you may like to consider putting the extra funds to good use by setting up an investment plan to save for your children’s education, consider making extra repayments on your mortgage or reducing other debt.
- Looking at your superannuation. Your new employer will be contributing 9.5% of your salary as a minimum to super. Keeping track of multiple super funds can be difficult so you may end up in a better financial position if you consolidate them. It is important to seek advice before you do this. For those eligible, the Government Co-Contribution scheme is also a great way to boost your superannuation savings.
Reviewing your insurances. A change in your personal situation, finances or employment is also a good time to review the personal insurances needs of you and your family.
Reviewing your Will. Many Australians do not have a valid Will. Not only does this leave uncertainty as to the distribution of your assets, but it can also provide uncertainty on the care and upbringing of your children. A will is a great way to let others know what is important to you. You can read more about Wills and Enduring Powers of Attorney here.
Returning to work after time out to have children or raise your family can be difficult and stressful. Planning and expert advice can help to ensure a smooth transition both personally and financially.