The Federal Government’s temporary free child care Early Childhood Education and Care Relief Package will be turned off on 12 July with families facing a return to the old Child Care Subsidy (CCS) system.
The decision announced by Federal Minister for Education Dan Tehan on Monday 8 June will see the CCS scheme resume from 13 July, along with new transition measures to support the sector and parents as they move back to subsidy.
While the decision to end free child care was not unexpected Early Childhood Australia CEO Samantha Page said the transition package creates additional complexities and uncertainties for both services and families.
Ms Page highlighted the government’s decision to cease JobKeeper from 20 July for employees of a CCS approved service and for sole traders operating a child care service.
“Some ECEC (early childhood education and care) services have only just navigated the complexities of receiving JobKeeper status and all eligible services will have budgeted on having JobKeeper available until the end of September 2020,” Ms Page said.
Concerns have also been raised about the activity test requirements for parents, which the Federal Government will ease until 4 October 2020, to support eligible families whose employment has been impacted as a result of COVID-19.
These families will receive 100 hours per fortnight of subsidised child care during this period however Ms Page is critical of the decision as it comes with the presumption that it will assist families to return to the level of work, study or training they were undertaking before COVID-19.
She said economic recovery remains highly uncertain and the pandemic is likely to have long-lasting effects on the economy according to a Reserve Bank of Australia statement from 2 June.
This is a concern shared by Goodstart Early Learning who believe attendance could suffer with the return of fees.
“More than half of our families have told us that they have suffered a reduction in family income since March and paying fees will be difficult for many,” Goodstart Early Learning CEO Julia Davison said.
Ms Davison believed children and families will need increased support for 12 months to see them through the COVID-19 recovery period.
“We continue to face uncertainty with a survey of our families finding 37% of responses would have to reduce their usage of child care when fees return,” she said. “Only half of those families expected their income to be back to normal by September, and only 62% expected their income to be back to normal by December.”
In addition to the CCS the Federal government will pay child care services a Transition Payment of 25% of their fee revenue during the relief package reference period (17 February to 1 March) from 13 July until 27 September. The last two payments scheduled for September will be brought forward to help with the transition and cash flow.
This additional Transition Payment of $708 million replaces JobKeeper and applies important conditions on child care providers. For the period of the transition: Child care fees will be capped at the level of the reference period (17 February to 1 March); and services will need to guarantee employment levels to protect staff who will move off the JobKeeper Payment.