Childcare centres failing to sign up to new system

CHILDCARE centres could leave up to 127,000 families significantly out of pocket as a result of their failure to sign up to the new subsidy system.

EXCLUSIVE

LAZY childcare centres risk leaving up to 127,000 families significantly out of pocket as a result of their failure to sign up to the new subsidy system.

With less than three weeks to go until the government’s childcare changes come into force, 707 centres are still yet to switch over to the new system.

This means even if families using those centres have updated their details and registered for the new subsidy, they may still face huge bills by missing out on their rebate because of the failure of their centre to also sign up.

MORE: Families paying more than their mortgage on childcare

MORE: Parents forced to work extra jobs to deal with cost of living

MORE: The number of kids spending 50-hours plus in childcare growing

A total of 12,183 childcare providers have already signed up to the new system but those dragging could impact thousands of parents.

Depending on income level, families usually get 50 per cent or more of their daily childcare fee subsidised by the government, with many opting to have fees paid direct to their centre.

Some centres charge up to $200 per child, per day before any subsidy.

Departmental staff have been personally calling the lagging centres up to twice a day to encourage them to switch over — but many are busy and think they can leave it to the last minute. Some just don’t understand the new system or are having trouble getting together everything they need to sign up.

A total of 12,183 childcare providers have already signed up to the new system but those dragging could impact thousands of parents.

Up to 320,000 parents — one in three accessing childcare — are also still not registered.

Nesha Hutchinson from the Australian Childcare Alliance said there were often up to 180 families per centre, varying by state and size of the facility.

Families could be hit with huge bills if their child care centre fails to sign up.

She said some childcare providers had failed to switch over to the new system due to being busy, not organised or motivated enough or just forgetful.

“The reality is there are going to be families who will be overcharged or centres who simply won’t be able to pay their staff as a result of leaving it this late,” Ms Hutchinson said.

Education Minister Simon Birmingham said where necessary his department would book in times for the department to personally walk centres through the transition.

“The government is actively working with the remaining 5.5 per cent of services yet to make the switch, including personally ringing them,” Senator Birmingham said.

Alys Gagnon, executive director of The Parenthood, said the government needed to step up and make sure there were contingencies in place if centres and families didn’t get their admin done on time.

“The government has known there will be difficulties with transition process from the get go and there ought to be contingencies in place to make sure the transition is as smooth as possible and there is not an increased financial burden on families or staff,” she said.

Opposition early childhood spokeswoman Amanda Rishworth said the government’s cumbersome system was to blame for centres not signing up.

“Providers have told me when I visit child care centres they have to spend hours of staff time doing the paperwork to register … many of these centres are small, not for profits who just don’t have the resources or time,” she said.

Education Minister Simon Birmingham and Minister for Human Services Michael Keenan visit the Acacia Children's Centre in Canberra.

The new subsidy is the biggest change to the childcare system in 40 years and replaces a multi-payment system with one streamlined subsidy.

It will give largest relief to those on the lowest incomes but is enforcing a strict activity test criteria.

Hard working families, with a combined income of more than $185,000 — slightly double the average individual income of $84,869 (ABS, Average Weekly Earnings, November 2017) — will receive an increase in the rebate cap from $7613 (correct) to $10,000 a year, but no reduction in fees.

Households with a combined family income of less than $185,000 will have no cap on the rebate and may see a reduction in their fees based on income and support need.

The government says families, on average, will be $1300 better off a year.

However an estimated 279,000 families across all income brackets could actually be worse off under the new system.

Has your centre signed up to the new subsidy system? If not, let us know:

@pollietracker

Originally published as Childcare centres failing to sign up to new system