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Australia

Will childcare changes lead to fee rises? Some operators quietly say yes


Updated

June 30, 2018 05:42:06

There are big changes coming to childcare payments for hundreds of thousands of Australian families — but changes are also coming to childcare providers.

Parents will be familiar with the new Child Care Subsidy (CCS), which comes into force on July 2. It replaces two different subsidies.

Across the country families have been registering for the new system and navigating through an activity test to determine how much of a subsidy they’ll receive.

For childcare providers — from the big operators that run hundreds of centres, to “mum and dad” operators that run just one — the CCS will also transform the way they run the business side of their centres.

And operators say those changes could lead to substantial fee increases.

What’s changing for childcare providers?

There will be a couple of changes happening at centres around the country from July 2. They include:

  • An electronic sign-in, sign-out register
  • Updates to IT systems

Most childcare centres run on thin margins. If administration and IT costs rise, operators say eventually they will have to raise fees to recover those costs.

Paul Mondo, president of the peak industry body Australian Childcare Alliance, said the implementation of the CCS had been a “difficult journey for service providers”.

“There are additional costs in implementing the requirements of the legislation,” he said in a statement.

“These requirements are ongoing and add to the ever-increasing costs.”

What’s changing for families?

  • Two federal subsidies that helped pay childcare fees are being combined into one, called the Child Care Subsidy, or CCS
  • The Education Department estimates close to 1 million families will be better off, but about 280,000 will be worse off
  • The new subsidy is means-tested — so families have to provide an estimate of income and work hours
  • Details must be updated via the MyGov website or the Education Department’s website
  • Low- to middle-income families where both parents work or with a single working parent will be better off
  • Lowest income families will be paid 85 per cent of their childcare costs
  • The annual cap on Government support will be abolished for most families

A change at drop off and pick up

The first change families will notice starts at the sign-in desk for drop off in the morning.

At centres such as Lady Gowrie in West Hobart, there’s no sign-in sheet. Instead, there’s a tablet.

Parents tap in their mobile number and then a PIN every time they drop off or pick up their child.

The system here has actually been in place for years. It will be coming to many childcare centres across the country with the transition to the new Child Care Subsidy on Monday.

“Embrace it,” said Sarah Walton, whose daughter Eadie attends Lady Gowrie. “It makes life so much easier. It streamlines the process of kid drop off and pick up.”

But for centres, the transition to electronic sign-in and out is expensive. Some operators estimate the costs could easily be more than $1,000 for each tablet.

“We’ve actually had to ensure that the iPad can have the software on the system. Plus, we need internet connection and secure stands,” said Shannon Allocca, who helps oversee the technical systems in Lady Gowrie’s 38 centres.

Operators were so concerned about this aspect of the CCS transition, the Government agreed to delay the electronic sign-in requirement until January 2019.

Detailing hours of care

The electronic change also does something else; for the first time, it lets the Government know exactly how many hours children spend in care.

The Child Care Subsidy covers up to a maximum 100 hours a fortnight, regardless of how long a child is actually in care.

“Looking at this data, when we submit it, they can see potentially we have children that are in care for five hours a day,” said Kathy Cripps, Lady Gowrie’s general manager of children’s services.

“We still get the 10 hours. But potentially, maybe down the track, the Government may only pay the five hours.

“I think this is something operators are thinking about.”

If childcare centres had to cover the difference, it would mean a huge extra cost. It’s likely that cost would be passed onto families in the form of higher fees.

Education Minister Simon Birmingham said the Government had no plans to end full-day subsidies.

“Centres are still entitled to charge for a full session of care for a day,” he said.

“Greater transparency in what’s reported to families will ensure that they do actually know how much they’re being charged for, rather than the current circumstance.”

Enrolling in the new system

Data from the old Child Care Benefit and Child Care Rebate has to be migrated over to the new CCS system.

In addition, families must complete what’s called a Compliance Written Arrangement (CWA) to trigger their enrolment registration with Centrelink.

Every time a child’s attendance hours are changed, the new “booking pattern” has to be entered and a new CWA is generated.

All of this means more IT resources and expense, which is especially hard for smaller operators to absorb.

At the end of June, the Federal Government said more than 960,000 families were registered for the Child Care Subsidy.

But there were still up to 200,000 families who had not yet made the transition.

That means many families could learn on July 2 they were no longer receiving a subsidy for their child care — and they will be charged full fees.

Childcare centres are bracing for a few weeks of chasing up families to make sure they are properly enrolled in the new system.

“I think there will be teething problems come the second of July and I think that will take a little while to navigate through,” Ms Cripps, from Lady Gowrie, said.

Minister confident issues will be resolved

The Government is also anticipating problems. It’s put in place a “back pay” provision that will allow families 12 weeks to claim back the CCS they are entitled to once they’re registered.

But Senator Birmingham is confident the transition problems will be solved. He believes it’s worth the trouble to replace the often-confusing old system.

“One single childcare subsidy … has got to be far simpler,” he said. “This is a vastly better system for the vast majority of Australian families.”

The Australian Childcare Alliance isn’t so sure.

“It would be incorrect to say that by simply combining the existing two payments into one, the system is simpler,” Mr Mondo said in a statement.

“For families, they will need to ensure that they are constantly meeting and reporting the requirements to maintain access to subsidy.”

Topics:

child-care,

family-and-children,

community-and-society,

federal-government,

government-and-politics,

australia

First posted

June 30, 2018 05:15:35



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