dumb investing...live on bread and water, page-48

"The rent from the IP would be cancelled out by the $400 in child care fees with Mum back at work."

Not fully. They won't qualify for Child Care Benefit due to income but they may qualify for Child Care Rebate. It pays 50% of out of pocket expenses up to $7,500 per child.

"You may be eligible for Child Care Rebate if:

you used approved child care during the year, and
you are eligible for Child Care Benefit, even if you receive no payment because your income is too high, and
you and your partner meet the work, training or study requirements, and
you meet the residency requirements for Child Care Benefit."

"Child Care Rebate assists parents or guardians with your out-of-pocket expenses for approved child care if you are working, training or studying.

Out of pocket expenses are total child care fees less Child Care Benefit. Child Care Rebate covers 50% of out of pocket expenses, up to a maximum of $7,500 per child from financial year 2011-12 to 2013-2014."

Source:Centrelink