On 8 June 2020, the Government announced that the temporary Early Childhood Education and Care Relief Package (the ‘Relief Package’) and Exceptional Circumstance Supplementary Payment would cease on 12 July 2020. From 13 July 2020,the Government will resume the Child Care Subsidy (CCS) system and implement atransition measure.
From 13 July 2020, approved providers will receive the Transition Payment for their approved child care services, instead of JobKeeper, for the period 13 July 2020 to 27 September 2020 (the ‘Transition Period’).
The weekly amount of the Transition Payment is equal to 25 per cent of the sum of all hourly fees charged (capped at the relevant CCS hourly rate cap) by the provider for sessions of care at its services during the reference fortnight, divided by two(to get a weekly amount).
The Government has released arrange of factsheets in relation to the Transition Payment that provide more information regarding how the Transition Payment will work, the grant agreement template and the process for submitting the Transition Payment Grant offer -please see the links below:
Family Day Care Australia (FDCA) has secured funding to engage Deloitte to develop independent develop guidance in relation to equitable management and potential disbursement of the Transition Payments which will be available soon.
When will the measures in the Early Childhood Education and Care Relief Package cease?
The following components of the Relief Package will no longer be in effect as of the following dates:
- applications for Exceptional Circumstance Supplementary Payments ceased on 20 June 2020
- Relief Package ceases on 12 July 2020
- the 62 initial absence days per child cease on 30 June 2020. There will be 42 initial absence days in the 2020/21 financial year
- With Child Care Subsidy recommencing from 13 July 2020, providers are obliged to recover gap fees as usual
- additional absence days to be claimed for COVID-19 related reasons without the need for medical evidence - ceases on 31 December 2020.
What arrangements will be in place when the Early Childhood Education and Care Relief Package ends?
From 13 July 2020, the Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS) will recommence,along with a range of new measures to support the sector and its families through the transition, including a relaxed activity test for families and anew Transition Payment for providers.
To ensure Government support is appropriately targeted, JobKeeper will cease from 20 July 2020 for employees of a CCS approved provider and for sole traders operating a child care service. Employees include all staff within the organisation - including all educators, centre directors and managers, administration staff, cooks and cleaners.
In recognition that this is a transition period from the Relief Package, all approved early childhood education and care providers will receive a Transition Payment, instead of JobKeeper, for the period 13 July 2020 to 27 September 2020.
In addition, families who have had their hours of activity reduced as a result of COVID-19, will be able to advise Centrelink they meet the requirements to access 100 hours of subsidised child care per fortnight, for up to 12 weeks.
This can be done through their Centrelink online account through myGov or the Express Plus Centrelink mobile app from 13 July 2020.
These arrangements mean that from 13 July 2020, providers will once again receive CCS payments on behalf of families, and parents will return to making their co-contribution to child care fees.
From 13 July 2020, all requirements of Family Assistance Law apply.
Are family day care sole trader educators still eligible for JobKeeper when the ECEC Relief Package ends?
Where a FDC provider/educator is a sole trader, from 20 July 2020 they will no longer be eligible for JobKeeper and are responsible for actioning this with the Australian Taxation Office (ATO). For more detail, see the Transition arrangements for the end of the Early Childhood Education and Care Relief Package – Information for Family Day Care Providers fact sheet.
For larger organisations that operate a range of employment models, including sole traders, employees and staff through labour hire companies, the following applies:
- Sole Traders working to a larger provider are not eligible for JobKeeper. Providers must communicate with sole traders to ensure they understand they are no longer eligible and must not receive JobKeeper from 20 July 2020. These sole traders must ensure they take the required action with the ATO to remove their eligibility for JobKeeper.
- Employees working in FDC are not eligible for JobKeeper. Providers are responsible for actioning with the ATO (see the Transition arrangements for the end of the Early Childhood Education and Care Relief Package – Information for Family Day Care Providers fact sheet).
- Labour Hire Staff are not employed directly by the provider and may remain eligible for JobKeeper. These employees should not have been included in monthly declarations submitted by the FDC provider, and no further action is required.
Will I receive the Transition Payment?
All approved providers that previously received the Child Care Subsidy and new providers that were approved during the Relief Package period will be eligible to receive the Transition Payment. The same arrangements will apply to privately run services, those providers operated by state, territory and local governments, and not for profit providers.
In practice, this will mean that those currently eligible and being paid the Relief Package payment will receive a Transition Payment offer in the first instance.
Are there any additional conditions on the Transition Payments?
To receive and maintain the Transition Payment providers must:
- offer an Employment Guarantee by continuing to employ those employees over the transition period who were working or being paid JobKeeper at the end of the Relief Package
- cap fees to the level in the relevant Relief Payment reference period.
Providers must also not claim JobKeeper for ineligible employees, or for themselves as JobKeeper eligible business participants. These conditions are in place to protect staff who will move off the JobKeeper payment and help families who may be doing it tough.
Who benefits from the relaxed activity test requirements that apply during the Transition period?
From 13 July 2020 to 4 October 2020, individuals who can no longer engage in the same number of hours of work, training, study or other activity recognised by the Child Care Subsidy activity test immediately prior to the COVID-19 crisis, can advise Services Australia they meet the requirements to access 100 hours of subsidised child care, per child, per fortnight for up to 12 weeks.
This can be done through their Centrelink online account through myGov or the Express Plus Centrelink mobile app.
What do providers need to do to prepare for these changes?
Providers should ensure that enrolment information is up to date.
Providers will begin receiving emails from 17 June 2020 to offer an Australian Government grant for the Transition Payment. The Department of Education, Skills and Employment (the department) has established an online process, using DocuSign, for providers to review and agree to this offer. The email will outline how to review and sign the offer.
Following return of the signed grant agreement, Transition Payments will be paid into the bank account currently nominated for a provider’s service in the Child Care Subsidy System(CCSS). Providers are responsible for ensuring their bank account details in the CCSS are correct.
To allow the department to process the first grant payment, which will be made in the week of 13 July 2020, providers will need to accept the offer by 5 pm AEST 1 July 2020.Providers will generally be paid weekly and in advance. However, the first Transition Payment will not be received by providers until 17 July 2020 at the earliest.
What is the Child Care Subsidy (CCS) hourly rate cap for the 2020-21 financial year?
The hourly rate caps are the maximum hourly rate used to calculate families’ CCS for each service type. The hourly rate caps are adjusted annually in accordance with CPI.
From 13 July 2020,the CCS hourly rate cap will increase to:
- $12.20 for Centre Based Day Care
- $11.30 for Family Day Care
- $33.17 for In Home Care
- $10.67 for Outside School Hours Care.
Read more information in the Child Care Subsidy rates from 13 July 2020 fact sheet. However please note that a condition for receiving the Transition Payment is that services must cap fees to the level in the relevant Relief Payment reference period.
What do families need to do for their Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS) to start again?
When the regular CCS arrangements resume from 13 July 2020, families will again need to pay the gap fee (the childcare fee after Government subsidies).
Families who were getting CCS before 6 April 2020, won't need to do anything for their subsidy to start again, as long as they have remained eligible and enrolled. Their CCS will start again automatically on 13 July 2020.
If a family’s circumstances have changed (for example income level or contact information), they should update their details with Centrelink as soon as possible. This can be done through their Centrelink online account through myGov or the Express Plus Centrelink mobile app.
If a family was not previously accessing child care they should put in a claim for CCS as soon as possible. If families continue using child care from 13 July 2020 but aren't receiving CCS, they will need to pay full fees. Claims for CCS can only be backdated for up to 28 days from the day the claim is lodged.
Families who received CCS for 2018-19 and still haven't confirmed their income for that financial year must do so by 30 June 2020. If they don't, their CCS and ACCS will not start again on 13 July 2020.
Parents and their partners confirm their income with Centrelink by either:
It’s important to know that if a family’s CCS and ACCS stops they will not be back paid for the period between when it stops and when they confirm their income. Families will need to pay full fees during this time. There’s more information about time limits for confirming income for CCS on the Services Australia website.
Where families have trouble meeting these requirements, they can contact Services Australia to discuss.
How much CCS a family can get is based on their individual circumstances. You can find information about eligibility and how much CCS families can get on the Services Australia website.
How can eligible families get the 100 hours activity test result that applies during the Transition period?
Temporary changes to the Activity Test have been made to help families impacted by COVID-19 to get back into their workforce participation activities, for up to 12 weeks from 13 July 2020 to 4 October 2020.
During this period, families can access up to 100 hours of subsidised child care per fortnight where they now have a reduced number of hours of work, training, study or other recognised activity, compared to their activity level prior to COVID-19.
For example, prior to COVID-19, a single person worked 30 hours per fortnight, entitling them 72 hours per fortnight, but now works 15 hours per fortnight entitling them to 36 hours per fortnight. From 13 July 2020, this person can apply to Services Australia through their Centrelink online account through myGov or the Express Plus Centrelink mobile app and be entitled to 100 hours of subsidised care per fortnight.
This is also available for two-parent families, where one or both parents have reduced activity compared to their activity level prior to COVID-19, and both parents are still engaging in at least 8 hours of recognised activity per fortnight.
What if a child is absent on their last day of enrolment?
If an enrolment ended on or prior to 5 April 2020, and the child was absent on the last day, normal absence rules apply. That is, if an individual has confirmed their child’s last day at a service, but that child does not attend their last booked session(s) of care, no Child Care Subsidy (CCS) will be paid for any days after the child’s last physical attendance at the service.
If absences are reported in the above circumstances and CCS has been previously paid, these amounts will be recovered from the service once the enrolment ceases.
If a child was absent on their last day of enrolment in the period between 6 April 2020 and 12 July 2020, the CCS amount which has been paid to the service will not be recovered from the service or the family.
For example, if an individual ceases their child’s enrolment on 8 May 2020, and the child has been absent for the two weeks immediately prior to this date, the CCS amount which has been paid to the service over the period up to 8 May 2020, will not be recovered from the service or the family.
From 13 July 2020, CCS will be payable if a child is absent up to seven days before or after an enrolment (including the first/last day of care), for any of the following reasons:
What if I need to amend a session report for a session of care prior to 6 April 2020?
After 12 July 2020, providers will be able to submit sessions of care for periods prior to 6 April 2020, and to make resubmissions to correct already submitted sessions.
These submissions and resubmissions will be monitored to ensure providers remain compliant with legislation.
The enrolments in my service have not dropped. In fact they have increased and some of my educators are providing more care out of standard hours. Can we receive more than the formula used to calculate the ECEC Relief Package payments?
FDCA raised this issue with the Department as soon as the details about the Relief Package were released.
The Government has acknowledged that not all aspects of the package align with the family day care service model and they are working through these issues.
In recognition that not all ECEC services have suffered severely decreasing enrolments and attendance, especially in the family day care sector, the Department has made a commitment to make payments at a higher rate available in some circumstances such as where greater funding is required due to an increase in enrolments to meet demand to address the needs of essential workers or vulnerable children; or where a provider or a service were not in operation during the reference fortnight.
The Government has developed a new online “Supplementary Payment Form” for use by services in these situations. To access the form, click here (scroll to the bottom of the page). Note that the eligibility criteria for the Supplementary Payment have been expanded as of Thursday 30 April 2020. We recommend reading our email bulletin sent to members on Friday 1 May as well as the Department’s latest fact sheet on the Supplementary Payment eligibility criteria before completing the form.
What do Family Day Care services have to do to receive payments under the Early Childhood Education and Care Package?
To receive the ECEC Relief Package payments providers/services are required to:
- remain open and provide sessions of care to at least one child, unless closed on public health advice or by a state regulatory authority for COVID-19 health and safety reasons
- ensure families and carers are not charged fees in relation to sessions of care provided to children during the period the provider receives the payments
- priority of access is given to children of essential workers, vulnerable and disadvantaged children and previously enrolled children
- continue to record attendance of children
- where children enrol at a service who otherwise would be considered ‘at risk’ for the purposes of ACCS (child wellbeing) services are required to make a referral to an appropriate support agency as per the existing ACCS (child wellbeing) referral requirements
- comply with all other Family Assistance Law and National Law requirements, including remaining eligible for the CCS.
See the DESE fact sheet on the Early Childhood Education and Care Relief Package Conditions for more detailed information. Note that, with the exception of providing reports of sessions of care during the period 6 April 2020 to 28 June 2020, providers must continue to comply with all existing record keeping and notice giving requirements of Family Assistance Law and the National Quality Framework.
Services do not need to apply for the ECEC Relief Package payments. Payments will be made on a weekly basis until 21 June 2020 unless notified by the Department. To assist services with cash flow while they apply for the JobKeeper Payment scheme and/or apply for a higher rate of payment through the Supplementary Relief Payment (if required), the department is combining the second and third ECEC Relief Package payments to services (to be paid at the time of the second payment). This advance payment means there will be one less weekly payment at the end of the twelve week payment period, meaning payments will conclude 21 June 2020, instead of 28 June as previously stated.
Will payments be subject to Child Care Subsidy Balancing (i.e. reconciliation)?
No. The Department advises that “payments made under the Early Childhood Education and Care Relief Package for the period 6 April 2020 to 28 June 2020 will be quarantined from the reconciliation process and will not be included in a parent or carer’s end of year balancing.”
Can I still charge late fees?
According to the DESE fact sheet on the Early Childhood Education and Care Relief Package Conditions, families must not be charged any child care fees during the period 6 April – 28 June, including the co-contribution or ‘gap fee’ amounts from families or carers.
While providers receive the Relief Package payments, they “should not be changing their service offer as agreed with families prior to 6 April 2020, and/or increasing or adding new administrative fees. It is a condition of the payment that providers will not seek to replace the gap fee amount through new and additional charges to parents and carers."
However, “services may continue to charge administrative fees that do not form part of the session of care fee that a family’s Child Care Subsidy was calculated on, for example, late pick-up fees. However, services are not to increase these fees for the duration of the Relief Package or add new fees that were not listed in a family’s Complying Written Agreement.”
Is there any guidance on how to distribute the ECEC Relief Package payments equitably to my educators?
The Government has not issued any specific rules for services regarding the distribution of the ECEC Relief Package payments to educators.
While FDCA has raised this issue with the Department we have recently commissioned Deloitte Australia to develop independent Practice Guidance for the distribution of funds under the ECEC Relief Package. This Practice Guidance has been distributed to members.
In the meantime, FDCA strongly encourages all services to be mindful that while the lump sum payments are distributed to services, these payments are designed to provide financial assistance to both services and their educators.
What is the incentive for family day care services and educators to offer non-standard care with the way the new ECEC Relief Package payments are being calculated?
Currently the calculation of the average service fee takes into account non-standard hours care provided during the reference fortnight (beginning 17 February 2020).
FDCA has sought advice from the Department about the potential negative impact of the new ECEC Relief Package on availability of non-standard care. The Department has advised that if you have increased non-standard care delivery since the reference fortnight your service is able to apply for a higher payment level to account for this.
The Government has developed a new online “Supplementary Payment Form” currently for use by services in these situations. To access the form, click here (scroll to the bottom of the page). Note that the eligibility criteria for the Supplementary Payment have been expanded as of Thursday 30 April 2020. We recommend reading our email bulletin sent to members on Friday 1 May as well as the Department’s latest fact sheet on the Supplementary Payment eligibility criteria before completing the form.
The Department has also informed FDCA that they are also looking at alternative funding mechanisms to incentivise the delivery of additional non-standard hours care to frontline workers. We will update members as soon as we know more on this.
What are the current requirements about collecting gap fees? I thought that only applied if your service was closed by a health authority?
This section only applies for care provided between 23 March 2020 and 5 April 2020.
Following the Government’s announcement of the ECEC Relief Package on 2 April 2020, the Government is now allowing services to waive the out-of-pocket charges they would normally follow up on, where a service remains open but children aren’t attending. Where a service remains open but children are not attending. This new rule is designed to provide some fee relief for parents and at the same time encourage families not to withdraw their children from child care and to make use of absences and additional absences. This change applies retrospectively from 23 March 2020 and extends on the rule previously announced which allowed services who had been directed to close by a public health authority to waive the gap fee for parents.
While centre-based care services are able to waive these fees automatically, family day care providers are being asked to apply to the Department of Education, Skills and Employment by emailing firstname.lastname@example.org “if they believe their service or families need this assistance”. Note that services that do this will first undergo a compliance check.
As a family day care service, are we allowed to keep charging our educators the fees that keep our service running?
Internal fee arrangements between a family day care service and an educator are a commercial business arrangement. As such, the Government does not regulate or intervene on these matters. However the Government has, as part of broader messaging around the COVID-19 response, appealed to all businesses to look at their rate of fees and charges and see if they can reduce them in recognition of the unprecedented times being experienced, and also in consideration of other complementary government initiatives such as the JobKeeper Payment Scheme. The ATO is administering the JobKeeper Payment scheme, so for the latest information on eligibility rules and how the scheme will work, go to www.ato.gov.au/General/JobKeeper-Payment/.
When will my service start to receive the ECEC Relief Package payments?
Payments commenced from the week beginning 6 April 2020 and will continue until the week ending 21 June 2020, unless otherwise notified by the department. To assist services with cash flow while they apply for the JobKeeper Payment scheme and/or apply for a higher rate of payment through the exceptional circumstances Supplementary Relief Payment (if required), the department combined the second and third ECEC Relief Package payments to all services, including family day care .
The Department advises that other subsequent payments will stay on a weekly cycle at this stage. Note that this advance payment will mean there will be one less weekly payment at the end of the twelve week payment period, meaning payments will conclude 21 June 2020, instead of 28 June 2020 as previously stated.
Will my service continue to receive payments under the ECEC Relief Package if my service is directed to close by health authorities due to COVID-19?
Yes. You are still eligible to receive this payment if your service is directed to close on public health advice or for other valid health and safety reasons.
Many parents have contacted my service saying they want access to the free childcare announced by the Government. Do I have to accept new enrolments at this time?
In short, the answer is no. Services and educators are not compelled to accept new enrolments from families as a result of the new package. On this matter the Government has advised that under the new ECEC Relief Package “services must prioritise care to children of essential workers, vulnerable and disadvantaged children, and children who were previously enrolled. There is no obligation for services to take on new families, increase hours of care or re-enrol those that have withdrawn if services do not have enough staffing to provide care or cannot meet health and safety obligations. Prioritising of new children (if capacity exists) is a business decision.”
How do I know if my service is eligible for the JobKeeper Payment scheme?
The ATO is administering the JobKeeper Payment scheme, so for the latest information on eligibility rules, how the scheme will work, and to apply go to www.ato.gov.au/General/JobKeeper-Payment. Eligibility rules include:
- the business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month), or
- the business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month), and
- the business is not subject to the Major Bank Levy
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are also eligible to apply for JobKeeper Payments.
In order to receive JobKeeper Payments, employers must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged.
PLEASE NOTE: As a result of the announcement of a return to the Child Care Subsidy System (CCSS) from 13 July 2020 and the commencement of Transition Payments, JobKeeper will cease from 20 July 2020 for employees of a CCS approved provider and for sole traders operating a childcare service (including family day care educators).
I am a Council Service. I have heard that I might NOT be eligible for the JobKeeper Payment scheme. What's the state of play?
FDCA has continued to raise this matter with the Department of Education, Skills and Employment. It has been a complex issue to address. . On Thursday 30 April, the DESE clarified that “state and local government services can continue to apply for support through the Supplementary payment process where they have more children attending and/or a significant increase in the hours of attendance compared to the reference period. However, these services cannot get extra support on the basis of JobKeeper ineligibility.”
State governments are instead being encouraged to meet the extra costs for local council and state government providers unable to access JobKeeper. The New South Wales Government has already committed to doing this. The Government is encouraging other states to do the same.
What financial assistance is available to me if I voluntarily choose to close my service?
The majority of initiatives that the Government has announced to assist small businesses responding to the challenges of COVID -19 emergency, such as the recently announced Early Childhood Education and Care Relief Package and the JobKeeper Payment scheme are targeted at keeping businesses open.
If you make a business decision to close your service voluntarily, and you have not been directed or advised to close by a health agency or state regulator, no payments will be made under the ECEC Relief Package.
Therefore we encourage you to talk to your accountant in the first instance to investigate how you might be able to stay open while this current crisis exists. Bear in mind you may have additional obligations to your staff during the COVID-19 emergency so do visit www.coronavirus.fairwork.gov.au to check.
Remember if you decide to close your service, either voluntarily or as advised, you must notify your state and territory regulatory authority within 24 hours.