The P.E.I. government is raising the rates it will pay for after-school child care and private sitters, and reducing the amount of paperwork families need to do to qualify.

The province is adding $300,000 to the child-care subsidy program. That will increase the subsidy for about 1,600 eligible families by $120 a month.

The program has been under review over the past year.

In that time, Family and Human Services Minister Tina Mundy says child-care workers and parents have asked for an update to the program after increases to minimum wage have meant some parents no longer qualify for the subsidies they used get.

Program's funding previously cut

The qualifications for subsidies have now been increased to reflect those economic changes, Mundy said.

For example, before the funding increase, a single parent household with a single child had to have a net income of $17,400 to receive full subsidy. Now they can earn a net income of $20,280 to receive the full subsidy.

This comes after the program has undergone several cuts over the last few years.

Tina Mundy - Summerside - 28/9/17

Tina Munday says the government is following through on its promise to re-establish child-care subsidies. (Nicole Williams/CBC)

The minister's office said the 300,000 investment will be built into the budget each year.

Rates will also be increasing for before and after-school child care, as well as private sitters.

The province is also working on simplifying the paperwork required to confirm income.

Reduced paperwork

Under the changes, paperwork to confirm income will only need to be done once a year, instead of once a month.

"Families and child-care providers told us to focus on increasing rates and streamlining the paperwork for parents," Mundy said.

The rate increase is effective Sept. 1, and eligible parents will receive retroactive payments.