ATO extends time to enrol for the JobKeeper scheme
On Monday, 27 April 2020 the Australian Taxation Office (ATO) announced that they are extending the time to enrol for the initial JobKeeper periods. The enrolment deadline has been extended from 30 April 2020 to Sunday,31 May 2020.
If you are eligible for the JobKeeper payment and enrol by 31 May 2020 you will be able to claim for the fortnights in April and May, provided you meet all of the eligibility requirements for each of those fortnights.
Your calls and written feedback have indicated you are experiencing a great deal of frustration clarifying your eligibility for JobKeeper. As per our FDCM last week, Family Day Care Australia (FDCA) is acutely aware of the significant gaps in the JobKeeper program as it applies to the family day care sector and given that this program is a key pillar in the overarching package design to support the ECEC sector, resolving these issues is our number 1 advocacy issue at present. We have raised your concerns directly with the ATO and the Department of Education, Skills and Employment (DESE) and we are still waiting for clarification on some important issues. A summary of the matters raised and their status is as follows:
Issue: 12 March 2020 tax lodgement requirement for educators
Status: Through negotiations with the ATO, FDCA has flagged the issue as a matter of significance for the family day care sector, and the ATO has since updated the eligibility criteria for sole traders to allow for some discretion where sole traders:
did not have a requirement to lodge your 2018-2019 return until after 12 March 2020
have deferred your lodgment under an extension of lodgment date we initiated.
You are included in a registered agent’s lodgement program whereby your lodgement due date is after 12 March 2020.
You have an automatic ATO lodgement deferral in place as you were affected by the Australian bushfires in late 2019, and you are not registered or required to be registered for GST, so will not have lodged a BAS before 12 March 2020.
FDCA is awaiting more information from the ATO around how the discretion process will actually work and will inform members as this is made available.
Issue: whether ECEC Relief Package payments are counted as income for the purpose of JobKeeper eligibility
Status: For services, the entire amount of the business continuity payment or exceptional circumstances payment received by the services provider is not counted in calculating the GST turnover as the payments are not for a supply.
For educators, who are sole traders, the disbursement of these payments is consideration for a supply of services the educator makes to the Services Providers. This income will need to be counted by the educators in calculating if they have a decline in GST turnover for the purposes of JobKeeper. DESE’s documentation makes it clear that the business continuity payment is paid at the Provider/Service level and not to the educators. The approved Providers use these funds to pay their contractual arrangements with the educators. However, it is not foreseeable that an educator could receive more than 70% of their pre COVID-19 revenue, therefore should not be an issue in relation to JobKeeper eligibility.
Issue: Ineligibility of educators for JobKeeper as result of not having an ABN
Status: Due to the integrity mechanisms embedded in the JobKeeper Package, this matter is unlikely to be resolved through the program itself. However, it may be resolved through application for supplementary payment. FDCA is awaiting a response to our request to Minister Tehan guaranteeing a "JobKeeper equivalent" through the supplementary payment mechanism under the ECEC Relief Package. FDCA has been advocating and negotiating around this issue on an ongoing basis with the Department and the Minister's office and we expect a resolution very soon. Please see FDCA's letter to Minister Tehan in the story below.
Issue: The position of new educators and services that cannot show a 30% reduction in revenue due to having commenced operations after 30 April 2019
Status: Awaiting response. However, if this cannot be resolved through the JobKeeper program itself, FDCA will ensure that the matter is considered through equivalent supplementary funding.
As outlined in FDCA's most recent correspondence with Minister Tehan, the matter of ineligibility for JobKeeper due to structural oversights is a significant and fundamental outstanding issue which remains before the Minister, as it has the potential to be is a catastrophic failing of the system for family day care. In the absence of an adequate solution via the JobKeeper program, a provision for a "JobKeeper equivalent" must be guaranteed under the ECEC Relief Package supplementary payment mechanism. Again, please see the letter to Minister Tehan in the story below for more detail in relation to these matters.
For more information on the JobKeeper payment, click here.
Letter to the Minister
In an email sent to all members on Monday, FDCA shared correspondence that was sent to the Hon Dan Tehan MP, Minister for Education last Friday, 24 April 2020, citing the fundamental gaps that remain within the current funding model as it applies to family day care.
In the letter, FDCA made three evidence-based recommendations to Minister Tehan to adjust the funding model to better support family day care. The three core recommendations are:
Guarantee provision for a JobKeeper equivalent via supplementary funding for ineligible educators and services
Apply a loading to the base ECEC relief payment to account for 50% of service revenue usually sourced from educator/parent levies, thereby allowing closer to the full 50% of pre-COVID revenue to flow to educators
Commit to a transitional support package to assist in the return to CCSS and pre COVID-19 activity levels
To view the letter sent to Minister Tehan, click here.
ECEC Relief Package survey sent to services
The Department of Education, Skills and Employment has engaged ORIMA Research to undertake a “pulse survey” of the ECEC sector to get your feedback on the ECEC Relief Package. On Friday 27 April service providers were sent an email inviting them to share their experiences.
Initial feedback from members on the survey indicates that, as with the funding system in its entirety, the survey is not adequately and appropriately tailored for the family day care service type. This is a matter we will raise with the Department this afternoon in our scheduled meeting.
In the meantime, we know there are significant and complex issues with the ECEC Relief Package as it has been applied to the family day care sector. Despite its flaws, the survey remains a valuable opportunity for you to have direct input to the Department on the specific issues facing your service. FDCA continues to engage with the Department on a daily basis, collating and presenting the issues facing the sector and offering appropriate informed, evidence-based solutions; however, it is vital they also hear the direct experiences of those on the ground.
Given the link to the survey was sent only to providers, we strongly suggest that educators engage with their service to ensure the impacts on educators are heard; or, conversely, services actively collate and include the impacts they are seeing on their educators.
ECEC Relief Payment Disbursement: Practice Guidance for Services
FDCA recently commissioned Deloitte Australia to develop independent Practice Guidance to assist family day care services in the distribution of funds under the ECEC Relief Package.
The Practice Guidance has been informed by advice from the Department of Education, Skills and Employment and the Australian Taxation Office on some specific details, while FDCA's COVID-19 Advisory Committee, which is comprised of stakeholders from services across the country, provided valuable input in the development of the Practice Guidance.
We must emphasise that this is guidance only and ultimately discretion lies with each service on how they distribute funds under the ECEC Relief Package.
Why has FDCA published this Practice Guidance?
The complexities of the funding model for family day care are evident and the administrative burden that it presents is significant.
It is also evident that the interests of services and educators need to be balanced in order to achieve equity for all stakeholders. As such, it was an ethical imperative that FDCA engage independent expert advice, and through an external tender process, Deloitte was appointed.
We realise that the funding model as a whole is not ideal for family day care. We are all dealing with a system that was imposed upon the sector without any consultation with the primary national ECEC advisory committee, of which FDCA is a representative. However, in the context of the model as it currently stands, the best outcome for all parties will be achieved through working together for a fair go for everyone.
To view the Practice Guidance, please see your Family Day Care Matters email.
FDCA is aware of a number of issues regarding the hotline and the Child Care Finder for family day care and we are working with ACEQCA on these matters. One such matter is that the Child Care Finder only displays results for the family day care service, and not educators; as such the sector is under-represented in its national footprint, as is its vast capacity to support parents and children. FDCA has shared its own FDCA locator tool with ACECQA and has invited the hotline team to use it as a reference in its enquiries.
FDCA has also reiterated family day care’s capacity to support essential and frontline services workers via the provision of non-standard hours care. We have asked that hotline operators be reminded of the sector’s capacity in this space. More broadly, we have advised that unless otherwise stated, family day care services are willing and able to field enquiries for care, including new enrolments.
ECEC Relief Package feedback form closing soon
We would like to advise members that we will be closing our ECEC Relief Package feedback form at 5.00pm AEST this Friday, 1 May 2020.
Thank you to the hundreds of members who, over the past month, have shared their feedback on the ECEC Relief Package via the feedback form and provided details of the very real impacts this has had on their businesses and livelihoods.
Sharing your feedback and stories assists in informing our advocacy efforts and adds to our evidence base as we continue to advocate on behalf of our members and the sector. Your feedback also helps us ensure that our COVID-19 information hub continues to provide the most relevant information for our members and the sector. However, PLEASE NOTE: the purpose of the feedback form is to coherently track trends at a macro-level across the sector in the initial stages of the ECEC Relief Package - if you have specific questions that require a response, please email email@example.com.
If you would like to take the chance to further inform FDCA's consultation with the Australian Government around the way forward for family day care, or provide detail around your experiences in this first month post-implementation, please complete the online feedback form available through our COVID-19 landing page at www.fdca.com.au/covid-19 before 1 May 2020.
Members will of course still be able to provide their feedback on the ECEC Relief Package by contacting FDCA by email at firstname.lastname@example.org.
FDCA COVID-19 information hub
To help members stay up to date with the latest information on the COVID-19 crisis we have developed a COVID-19 information hub with information specific to family day care educators and services.
The hub contains information, support links and resources available to family day care educators and services during the COVID-19 crisis.
The hub includes:
frequently asked questions, including general FAQ’s and FAQ’s specific to educators, services and relating to the National Law;
a list of key advocacy points that FDCA has raised with the Department of Education, Skills and Employment;
links to all FDCA bulletins sent to members regarding COVID-19, and;
additional links and resources relating to COVID-19.
We will continue to update these pages as new information comes to hand. Please be aware that the situation continues to evolve rapidly.
To view the FDCA COVID-19 information hub, click here.