Some mums working full-time are earning just $5 an hour

Posted: 20 May 2016 11:13 am
Working mum

After childcare, some low-income earners are actually losing money by the fifth day.

Full-time working mothers in Australia are earning as little as $5 per hour after paying tax and childcare costs, while some low-income earners are actually losing money by working five days.

New research conducted by the Australian National University (ANU) and commissioned by Australia’s largest childcare provider, Goodstart Early Learning, revealed some working mums may be losing up to two-thirds of their gross earnings to tax and childcare fees.

The ANU Centre for Social Research and Methods crunched the numbers and found that mothers earning $66,940 in a middle-income family with one child in care are taking home $22.39 per hour on the first day of work, $13.83 an hour on the second and by Friday are pocketing as little as $5.08 each hour.

Alternatively, mums earning $43,000 in a low-income family are receiving $15.43 per hour on the first day, $6.66 on the second and are actually losing money by the fifth day.

“This research shows that families, particularly low income families, face very high effective marginal tax rates if the secondary income earner, usually the mother, wants to increase the number of days they work," says Ben Phillips, research fellow at ANU.

“For a low income family, a mother increasing her days for work from three days to four days with a child in childcare would see her lose 72% of what she earned on the fourth day. If she then added a day, she would be effectively working for nothing on the fifth day.

“The effective marginal tax rates faced by working mothers are even higher if they have two or more children in child care."

John Cherry, advocacy manager, Goodstart Early Learning says the research shows that the current childcare subsidy system is failing to make it worthwhile for mums to work more than two or three days a week, locking them into part-time work.

Picture: Shutterstock

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