Under the Commission’s recommended new approach to funding families on Parenting Payment are eligible for 20 hours of subsidised ECEC a fortnight without meeting the activity test (chapter 15). 3 Specific examples of effective marginal tax rates When calculating the EMTRs of families using ECEC services, it is necessary to analyse an array of tax and transfer arrangements. Many of the transfer payments are complex in their own right (with eligibility and payment rates varying based on family characteristics, the type of ECEC services used, the pattern of ECEC usage and income thresholds with — the thresholds also varying based on family characteristics). The presence of systemic problems arising from the interactions of an array of taxes and transfer payments can be identified by examining EMTRs for some family circumstances (called cameos). The current or future prevalence of those circumstances can then be determined by examining the impacts of policies and policy changes on a representative sample of family circumstances. The following sections use selected cameos to highlight key strengths and weakness of the current ECEC funding arrangements. This approach also underlies the distributional analysis of the recommended reforms as outlined in chapters 13, 14 and 15. Table E.8 outlines ten cameos that the Commission has undertaken to assist with an examination of EMTRs. Table E.8 Commission Cameos
Under the Commission’s recommended new approach to funding families on Parenting Payment are eligible for 20 hours of subsidised ECEC a fortnight without meeting the activity test (chapter 15). 3 Specific examples of effective marginal tax rates When calculating the EMTRs of families using ECEC services, it is necessary to analyse an array of tax and transfer arrangements. Many of the transfer payments are complex in their own right (with eligibility and payment rates varying based on family characteristics, the type of ECEC services used, the pattern of ECEC usage and income thresholds — with the thresholds also varying based on family characteristics). The presence of systemic problems arising from the interactions of an array of taxes and transfer payments can be identified by examining EMTRs for some family circumstances (called cameos). The current or future prevalence of those circumstances can then be determined by examining the impacts of policies and policy changes on a representative sample of family circumstances. The following sections use selected cameos to highlight key strengths and weakness of the current ECEC funding arrangements. This approach also underlies the distributional analysis of the recommended reforms as outlined in chapters 13, 14 and 15. Table E.8 outlines ten cameos that the Commission has undertaken to assist with an examination of EMTRs. Table E.8 Commission Cameos
childcare-appendixe.docx