COVID-19 Introduction to Childcare Relief Payments
By Paolo Coniglio, 09.04.2020
The Australian Government has introduced a number of legislative amendments to the Family Assistance Law to help families and Childcare Centres overcome the impact of the Coronavirus on their financial resources.
Centres Opening Requirements
Education Minister Dan Tehan has stated that the current medical advice is for the childcare sector to remain open, except where individual services are directed to close by health authorities. The number of assistance measures implemented by the Government to support Childcare Centres are all provided based on the condition that the centre stays open during this time (unless closed by Government mandate).
Where the standard 42 days of absence have been used, an additional 20 absences days have been made available for the 2019-2020 Financial Year.
If additional absence days are needed due to being ill from COVID-19 or where self-isolation is required, these can be taken without the support of a medical certificate until 31 December 2020.
Gap Fees and Re-enrolments
Services will not be required to recover gap fees between the period from the 23 March to the 31 December 2020.
All enrolments terminated since the 17 February 2020 can be re-instated without charging gap fees or the requirement to attend the childcare (by taking advantage of the 62 days of absence for the financial year). Re-starting the enrolment will automatically secure the place for the child allowing him/her to return to the centre at the end of the pandemic period.
Early Childhood Education Relief Package
Prime Minister Scott Morrison has announced the introduction of a new child care subsidy system called Business Continuity Payment (BCP). This new measure will guarantee free childcare access to working parents currently under pressure during the Coronavirus pandemic.
The Australian Government will subsidise half of the operating costs for the nation’s childcare services providers to keep the industry afloat. This measure is estimated to cost the Australian Government $1.6 billion over the estimated period.
The new relief package is set to temporary replace the Child Care Subsidy (CCS) and Additional Child Care Subsidy Payments. This system has been implemented from the 23 March 2020 to 28 June 2020 with a possible 3-month further extension. Monthly reviews will also be conducted to assess the viability of this new measure.
Childcare Centre Payments
The Government will subsidise 50% of the Childcare fee revenue up to the existing hourly rate cap. Childcare centres are not allowed to charge gap fees to families during this time. The payment is calculated at a reference fortnight, based on an hourly fee which is 50% of the lesser of:
- the hourly fee of the session of care, or
- the relevant CCS hourly rate cap.
Services that require a higher level of support will be able to request a higher percentage of funding. An application form will soon become available to centres.
The Funding will apply from the 6 April 2020 on the number of children who were in care during the fortnight leading to into 2 March 2020. Payments will be made on a weekly basis and they will come directly from the Government, not the Commonwealth Childcare Subsidy. This means that from Sunday 5 April 2020, centres will not be able to upload session reports to the Child Care Subsidy System.
Until the payments come into effect, childcare services will be allowed to waive the gap fees for families who are keeping their children at home.
The Child Care relief package will be provided at the following conditions:
- The Centre must stay open (unless closed by health authorities);
- The Centre must continue to record all bookings and attendance for enrolled children;
- Children must still have a valid CCS enrolment and the Centre must still issue them through CCS.
This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.