17 January, 2026
nanny-tax-credits-and-grandparent-payments-a-new-childcare-approach

The future of childcare in Australia is under consideration, with proposals for payments to grandparents and tax credits for families using nannies gaining attention. Nick Tyrrell, a Liberal Senate candidate for the Australian Capital Territory (ACT), advocates for these measures as a response to recent findings regarding shortcomings in the local childcare sector.

Tyrrell, a father of two and small business owner, argues that the focus should shift from strict compliance regulations to enhancing family options. He emphasizes the necessity for flexibility in childcare arrangements that cater to diverse needs, including shift work and cultural preferences. “Parents deserve flexible alternatives beyond rigid centres,” he stated, noting that countries like France, Germany, the Netherlands, and the UK successfully support family day care and in-home options.

Compensating grandparents who care for their grandchildren is one potential solution Tyrrell suggests. He highlights successful models elsewhere, pointing to France’s nanny tax credits, which cover up to 50 percent of costs, capped at €12,000 annually, and the Netherlands’ 96 percent subsidies for low-income families utilizing nannies or au pairs. These examples illustrate how government support can facilitate in-home care.

Recent revelations from the ACT childcare regulator have brought to light deeper issues within Australia’s $16 billion Child Care Subsidy (CCS) system. Tyrrell noted that this system inadvertently funnels families into childcare centres characterized by high staff turnover, with rates between 25 to 37 percent, and exorbitant fees—Canberra’s average fees exceed $800 per week, the highest in the nation. Access gaps continue to affect 35 percent of families in regional areas, further complicating the situation.

The challenges posed by the current childcare system are stark. “Subsidies often inflate costs rather than improve quality, while burnout fuels misconduct,” he remarked. Parents must feel assured that their children are safe and well cared for, and Tyrrell insists that the taxpayer-funded childcare system must provide genuine choices.

Opinions among parents reflect a growing desire for a more supportive childcare framework. Sheree Ireland, a full-time consultant and mother from Canberra, echoes Tyrrell’s call for expanded government support. As the primary income earner in her family, she faced the challenge of finding suitable childcare for her son, Chase, who entered a childcare centre at just four months old. Currently, he attends a centre four days a week, spending one day with his grandfather.

Ireland explored various alternatives, including co-working spaces that allow on-site childcare with supervision by a nanny. Ultimately, the affordability of the subsidized childcare centre led to her decision. “It is a long time to be away from him,” she noted, expressing a desire for a more balanced arrangement.

She envisions a scenario where government subsidies could help reduce costs at co-working spaces like Bubba Desk, which provides onsite nanny services. “It would mean I could work at my desk, book a meeting room, and still be close to him throughout the day,” she explained. This sentiment resonates with many parents seeking a better balance between work and childcare.

Ireland also highlighted the significant role grandparents play in supporting families, emphasizing that a government payment for their childcare contributions could open up more options. “Grandparents do pick up a lot of the slack,” she said, referring to her father, who assists with childcare needs. The idea of compensating grandparents for their invaluable support could alleviate some of the pressure on working parents.

As discussions about the future of childcare in Australia continue, the proposals put forth by Tyrrell and parents like Ireland signify a growing recognition of the need for diverse and adaptable childcare solutions. Addressing these issues may lead to a more inclusive system that better serves the needs of families across the country.