Free childcare as centres waive out-of-pocket fees in Australia’s lockdown hot spots

Families in Covid-19 hot spots will get free childcare if they keep their kids home. Here’s how the changes will work.

Families who keep their kids home will get free childcare during lockdowns lasting more than a week, under permanent pandemic changes announced by the federal government today.

Childcare centres can now waive “gap payments” for families in any area the federal government declares to be a Covid-19 hotspot for more than seven days.

Gap payments are the difference between the full fees charged by centres – typically $100 a day – and taxpayer subsidies of up to 85 per cent, or $85 a day.

The change is designed to stop parents cancelling their children’s daycare enrolments during lockdowns, to save paying gap fees.

Centres will be paid to reserve the children’s places when parents keep kids at home during lockdowns, so they can stay open and continue paying staff to care for the kids of essential workers.

Parents will still have to pay full fees for children who continue to attend daycare during lockdowns.

Federal Education Minister Alan Tudge announced the childcare changes. Picture: NCA NewsWire / Gary Ramage

The gap waiver will cover long daycare, family daycare and out of school hours care (OSHC), which can decide if they want to charge full fees or cut fees to the same level as government subsidies.

Parents will have to pay full fees for the first week of a lockdown, but can then have out of pocket costs cancelled from the eight day onwards.

But free daycare will start from the first day of lockdown when a state or territory government ordering that childcare centres can only care for vulnerable children, or the children of essential workers.

Daycare providers can also receive JobSaver payments, which cover 40 per cent of the weekly payroll for locked-down businesses.

Federal Education Minister Alan Tudge said that the gap fee waiver, combined with JobSaver, meant that the average childcare centre will continue to receive 80 per cent of revenue, even if no children attend.

Parents in lockdown areas will get free childcare even if they keep their kids at home.

He said the change – which extends Sydney’s childcare changes to all locked down Covid-19 hot spots across Australia – would immediately benefit families in metropolitan Melbourne, the ACT and regional NSW.

“This will take some additional financial pressure off families who are struggling during Covid-19 lockdowns,’’ Mr Tudge said.

“It is also good for services because it means families are less likely to pull their children out of care altogether.

“Services still get the government subsidy, even if children aren’t attending.’’

Stricken childcare centres have been lobbying for financial support for more than a month, as parents cancelled enrolments to keep their kids at home during lockdowns.

Seventy per cent of children in western Sydney have been kept home from daycare, with one in three kids across Sydney pulled out of childcare during the long lockdown.

Mr Tudge said the gap fee payment, along with JobSaver, would help centres stay open.

“The measures will give providers more certainty, to help them plan and keep their staff employed so business can continue as usual when the stay at home orders end,’’ he said.

The Parenthood lobby group wrote to Mr Tudge and Prime Minister Scott Morrison two weeks ago that waiving that gap fee waivers in Sydney were not enough to keep centres afloat.

The Parenthood executive director Georgie Dent said the childcare situation in Sydney was “nothing short of a crisis’’.

KEY QUESTIONS ANSWERED

Q: I’ve decided to keep my child home with me during Covid-19 lockdowns. Do I still have to pay for childcare?

A: Childcare services in Covid hot spots can waive gap fees for families who keep their kids home during lockdown. Parents won’t pay any out-of-pocket costs on the days their kids don’t use child care, so it is essentially free to families

Q: What is the gap fee?

A: The Government pays a percentage of child care fees (usually up to 85 per cent) through the Child Care Subsidy (CCS). The gap fee is the difference between what the service charges and what the Government covers under CCS – essentially it is the family’s out-of-pocket costs.

Q: Do I have to apply?

A: No. Childcare centres that choose to waive the gap fees will arrange this. The Government will continue to pay the CCS to your service.

Q: Is it compulsory for centres to lower their fees?

A: No, so check with your centre.

Q: How long do I have to wait?

A: Services can waive gap fees after the first week of a lockdown, or from day one of a lockdown if your state or territory has ordered that centres can only care for vulnerable children, or the children of essential workers.

Q: I’m still sending my child to daycare. Do I have to pay full fees?

A: Yes. If your child is still using child care you will still pay normal gap fees.