Cash-strapped parents are racking up childcare fees and failing to pay them

PARENTS owing as little as $100 in unpaid childcare expenses are being chased by debt collectors as centres get fed up with unpaid fees.

PARENTS owing as little as $100 in unpaid childcare expenses are being chased by debt collectors as centres get fed up with unpaid fees.

In some cases centres are seeing parents rort the system by “centre hopping” children from location to location and leaving a trail of unpaid fees behind them.

Australia’s largest debt collection agency, Prushka, said unpaid childcare fees is becoming a huge problem, as parents remain crippled by the rising cost of living and childcare fees are pushing them to the brink.

Single parents, parents on benefits and those in casual employment are among the worst non-payers in the system.

Parents are feeling the financial pressure of childcare fees resulting in some leaving fees unpaid.

Industry experts say for many centres it’s not worth their while spending the time, effort and money trying to recoup unpaid fees.

Prushka’s data shows the average debt size for unpaid fees is about $1200.

The debt collector’s chief executive officer, Roger Mendelson, said the inability of centres to do “background checks” on parents made it impossible to distinguish who were the good and bad payers.

Prushka’s chief executive officer Roger Mendelson said unpaid childcare fees is becoming an increasing problem.

“We see a common issue of parents moving from centre to centre when they fall behind in payment,’’ he said.

“The fact parents with a bad payment record are able to get credit from another centre is indicative of the centre not carrying out proper credit checking.

“The impact is that the good payers need to pay more to subsidise the bad payers.”

He urged centre operators to “take action very quickly” when there is a default, to reduce the likelihood of the debts escalating.

Many debts are not chased until the parents are in arrears of between four and six months.

And among the worst offenders rorting the system includes one parent leaving debts owing of $1400 at one centre and than racking up $700 in unpaid fees at a kindergarten.

The average unpaid childcare fee amount is about $1400.

Another debtor, a single mother who has moved around the country, notched up debts of $450 and $1600 along the way.

Not-for-profit organisation Australian Childcare Alliance’s president Paul Mondo said constant financial household pressures had led to more families struggling with payments.

“In some cases families will leave a service with unpaid debt,’’ he said.

“Most services are supportive of families in these circumstances and will work with them to put arrangements in place to support families to catch up.”

Mr Mondo said there was no way centres could do credit checks on parents before they enrol a child.

The Child Care Rebate covers about 50 per cent of fees up to an annual cap of $7500.

A new scheme will begin on July 1 next year and be replaced with a new subsidy.

Unpaid childcare centre fees are becoming increasingly common among parents.

One of the nation’s largest childcare centre networks, Goodstart Early Learning, would not comment on the issue of unpaid fees but said childcare subsidies remained low on worldwide standards.

“We know the cost is a barrier for a number of families,’’ she said.

“The new child care subsidy starts next July and will leave a typical family around $30 a week better off.”

Brisbane mother-of-three Jocelyn Bezzina, 38, has nine-year-old twin boys and a five-year-old daughter and said childcare fees had been a challenge.

“When I just had my daughter Isla, as I was only on a maternity leave pay our twins Ryan and Jay were only able to go (to childcare) twice a week as we couldn’t afford double the costs on one income with a newborn,’’ she said.

“I know others struggle with the increasing costs.”

Financial Counselling Australia’s chief executive officer Fiona Guthrie said she was “not surprised” by the growing number of parents not paying childcare fees.

Financial Counselling Australia’s chief executive officer Fiona Guthrie said childcare fees were putting a huge strain on families.

“It’s becoming more a necessity for both parents where they both need to work and the cost of childcare is quite expensive,’’ she said.

If you are having financial problems contact the National Debt Helpline on 1800 007 007.

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@sophieelsworth