The Child Care Package

In our capacity as the national peak body for family day care, Family Day Care Australia (FDCA) engaged our stakeholders in a diverse and broad range of consultative processes throughout the passage of the New Child Care Package legislation to advocate for the best outcomes for the family day care sector.

For more information about the new child care package please visit the Australian Government Department of Education and Training website.

27 March 2017

Jobs for Families Child Care Package legislation passed in both Houses

On the 27th of March 2017, the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 was officially passed by both Houses of Parliament.

The Bill is largely indistinguishable from its previous iteration; however, some amendments were proposed by the Derryn Hinch Justice Party and agreed to by the Senate and House of Representatives. The amendments will see the third income threshold reduced from $250,000 to $200,000, and families earning over $350,000 are now entitled to 0% of the Child Care Subsidy (CCS).

The new subsidy structures are due to come into effect from 1 July 2018.

FDCA maintains our concerns in relation to the implementation of the Bill as it currently stands, namely that:

• The activity test may lead to disengagement with the Early Childhood Education and Care (ECEC) system which will impact most on vulnerable children and, as such, we continue to recommend that there be minimum hours of access to ECEC fee assistance that is not subject to an activity test.
• While FDCA supports the overarching intent of the introduction of the CCS, we maintain that the current cap calculation is inequitable and will disproportionally affect the family day care sector.

22 March 2017

Omnibus Bill split into two separate Bills

After deliberations in the Senate, the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 was split into two separate Bills – the original Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 and the new Social Services Legislation Amendment Bill 2017.

9 February 2017

Senate Inquiry into the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017

On 9 February 2017, the Senate referred the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 to the Senate Community Affairs Legislation Committee for inquiry and report. FDCA provided a submission to the Committee on behalf of our membership on Friday 3 March 2017.

View FDCA’s submission.

As the Bill presented no major amendments to the Jobs for Families Child Care Package legislation, the submission was primarily a reiteration of the key positions initially provided in our submission to the Senate Inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016.

The Senate Committee report on the findings of the inquiry was released on 21 March 2017.

8 February 2017

Child care legislation re-introduced to Parliament in an Omnibus bill

The Jobs for Families Child Care Package was re-introduced in the House of Representatives in the form of a combined bill entitled the Social Services Legislation Amendment (Omnibus and Child Care Reform) Bill 2017.

The Bill contained both the original proposed child care legislation and the Family Tax Benefit (FTB) changes to fund the Package. Proposed changes to the FTB system included phasing out FTB supplements, increasing maximum fortnightly payments for families on FTB part A by up to $20 a fortnight per child, and single parent families now able to receive FTB Part B until their youngest child turns 16 years of age. These changes, combined with other Budget savings measures contained in the Bill, were expected to provide savings of more than $5.5 billion to pay for the incoming child care reforms.

15 September 2016

Senate Inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016

On 15 September 2016, the Senate referred another inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 to the Education and Employment Legislation Committee.

FDCA made a submission to the Committee, largely through a reiteration of our original submission to the Senate Inquiry into the Jobs for Families Child Care Package Bill 2015 as well as including developments related to the Bill that occurred since January 2016.

View FDCA's submission.

FDCA also appeared at the Senate Inquiry hearing on 3 October 2016 to give evidence regarding elements of the Package, and reaffirmed our support of the passage of legislation subject to minor (albeit important) amendments, namely the proposed activity test, inequitable cap pricing, and the delayed implementation date of the CCS until 1 July 2018. The Senate Committee report on the findings of the inquiry was released on 10 October 2016.

29 January 2016

Senate Inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015

FDCA provided a submission to the Senate Inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 on behalf of our membership.

View FDCA’s submission.

The Jobs for Families Child Care Package was tabled in Parliament on Wednesday, 2 December and outlines a new child care subsidy system and safety net package. The Bill will be reviewed by the Senate and if passed later this year, will come into effect in July 2017.

FDCA also performed significant financial modelling to determine the difference between the current and proposed child care subsidy.

The main findings are:

• The majority of families will be better off, but those who use non-standard and part-time care may, in some cases, be worse off.
• The cap price for family day care ($10.70 per hour) is restrictive and does not account for the additional costs associated with providing part-time or flexible care outside of standard hours.
• While FDCA agrees with some of the additional regulatory powers contained within the new legislation, others are unfairly directed specifically at family day care and have the potential to impact on the viability of our sector.

3 December 2015

A Bill to amend Family Assistance Law to allow for the implementation of the Australian Government’s Jobs for Families Child Care Package was introduced into Parliament. Significant changes to the current child care assistance system proposed in this Bill include:

Child Care Subsidy (CCS)

• The new CCS is a single, income-tested subsidy paid directly to ECEC providers, based on a cap price that is different for each service type.
• The cap price for family day care is $10.70 in 2017/18. The maximum subsidy is 85% of this cap ($9.10), paid to those families with a household income of under $65,710 and decreasing as per the graph below, with those at incomes over $185,710 having their subsidy capped at $10,000 per annum.
• If the hourly rate of the service is above the subsidy price, the family will have to pay the gap amount.

FDCA's Position: FDCA is concerned with the differential calculation of the cap between service types, resulting in disadvantage for families and children who use family day care, and devaluing family day care in the early childhood care and education sector. As the integrity of the child care subsidy relies on the cap price, FDCA advocates for a review of the cap price and the methodology behind it prior to the introduction of the new child care system.

Activity Testing

• Families who have an income under $65,710 per annum will be eligible for 24 hours per fortnight subsidised child care.
• To be eligible for the new CCS in a household where the income is over $65,710, the least active parent will be subject to stringent activity testing, with activity hours required for hours of subsidy proposed as follows:

Activity (per fortnight) / # of hours of subsidy (per fortnight)

8-16 hours / Up to 36 hours

17-48 hours / Up to 72 hours

49 hours /Up to 100 hours

• Eligible activities include work, training, study or any other recognised activity such as volunteering.

FDCA's Position: FDCA does not support the proposed activity test; the proposal is complex and is more restrictive than the current system. Most concerning is the negative effect that disengagement with the ECEC system will have on disadvantaged children and that the government’s proposal goes against international best practice.

Child Care Safety Net

The Child Care Safety Net is designed for vulnerable children and disadvantaged communities. It comprises:

• An Additional Child Care Subsidy (ACCS) to replace current SCCB, which will see top up subsidies to 120% of the cap price for ACCS recipients (budgeted $60 million p/a).
• A new Inclusion Support Programme aims to remove the administrative burden of the current ISP. The proposed implementation date is July 2016 (budgeted $136, 33 million p/a). FDCA will assess the impact of the proposed single Tier ISP and the loss of funding for an additional carer to accompany children on excursions.
• The Community Child Care Fund (CCCF) provides competitive grant funding for services to reduce barriers to access child care, particularly in disadvantaged, regional or remote communities and in areas of demonstrated high demand but with low child care availability ($135 million p/a).

FDCA's position: FDCA will closely analyse the requirements to access the ACCS and, as further details of the new Inclusion Support Programme become available, will work to ensure that children currently in receipt of Tier 1 subsidies are not disadvantaged in the transition to the new Inclusion Support Programme.

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