The Australian Government has announced an end to the free child care scheme introduced to support parents during the COVID-19 imposed shutdown.
Minister for Education Dan Tehan said this week the scheme will end on July 12, with the Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS) due to resume on 13 July.
The free child care scheme was initially introduced on 6 April to support early childhood services to stay afloat following the rapid removal of children from many services in response to COVID-19 and also to ensure services could stay open to provide education and care for the children of essential workers.
Response to the scheme was mixed with providers saying it was hard to stay open with significantly reduced operating budgets and reduced pay rates.
However, according to the Government a recent review of the emergency package showed that it had been successful in keeping early childhood services operational with 99 per cent of 13,400 services still open at 27 May 2020.
The Government says with the economy re-opening and more people returning to work, demand for child care is increasing and this means a return to the original CCS system.
How will it work?
Families will start paying fees under the CCS from 13 July.
However, the early childhood sector will enter a three-month transition period from 3 July, during which the government will pay services 25 per cent of their fee revenue. These payments will continue until the end of September.
This money is conditional on services capping fees at their February rates and maintaining staff numbers when the JobKeeper program is finished for early childhood workers.
The Government will also relax the activity test until 4 October to accommodate families whose employment status has changed as a result of COVID-19. These families will receive up to 100 hours per fortnight of subsidised care to make it easier for them to return to the work, study or training they were engaged in pre COVID-19.
Parents on JobSeeker payments still automatically receive 72 hours of subsidised care.
“Stopping fee increases during the transition and relaxing the activity test will relieve financial pressure on families that may be doing it tough,” said Mr Tehan.
