By Nicole Brady and Deborah Gough
UP TO 20 per cent of nannies are being paid cash in hand, exposing them and their employers to legal risks, a new lobby group warns.
The Australian Nanny Association was incorporated last month to push for increased regulation and oversight of the industry. A key goal is for the 50 per cent childcare rebate available to families who use childcare centres to be paid to parents who choose in-home care.
Illustration: Matt Golding.
Spokeswoman Annemarie Sansom said members of the association estimated up to 30,000 nannies were working in Australian homes.
''We think about 15 and up to 20 per cent are working without declaring it and not paying tax,'' said Ms Sansom, owner of the Night Nannies agency.
''People are finding nannies through websites and not realising the implications of just paying cash and not declaring it.''
Risks for nannies and employers operating in the cash economy included issues related to inadequate training, workplace injury and a lack of liability insurance. Ms Sansom said while nannies had the benefit of being paid tax free, they did not earn superannuation or holiday pay.
Anecdotally, parents have told The Sunday Age that it is easier and cheaper to pay nannies cash in hand than via an agency that takes a cut.
''It is a total black market. When [my children] were younger, I spent 30K-plus a year cash, post tax to stay in the workforce. Private school fees are easy by comparison,'' one mother said.
An Australian Taxation Office spokesman said people can earn up to $18,200 before they are required to declare the income and pay tax.
The debate over rebates for nannies is becoming increasingly political, with Opposition Leader Tony Abbott pledging that a Coalition government would, early in its first term, ask the Productivity Commission to model the cost of extending the childcare rebate to in-home care, such as nannies. Britain, New Zealand, Canada and the United States all subsidise parents to employ nannies. But industry observer Lora Brawley said the black market also played a strong role in the industry in the US. She said of 2 million US nannies just 10 per cent paid tax.
Mr Abbott and Coalition spokeswoman on childcare Sussan Ley recently met representatives of the Nanny Association. It has requested a meeting with Early Childhood and Childcare Minister Kate Ellis. Ms Ellis has argued that extending the rebate would drain $2 billion from funds allocated to childcare and even then the cost of a nanny would remain unaffordable for most families.
Ms Sansom argues that paying the rebate to families who use nannies would be a hefty incentive to encourage them to only use those who paid tax and adhered to workplace laws.