Childcare sector waits to see if attendance will drop as childcare subsidy returns, free care ends

The childcare sector is nervously watching how families respond to the end of free childcare, as some industry leaders warn attendance rates may drop.

A government review of its coronavirus childcare relief package found 99.3 per cent of about 13,400 childcare services were operational on July 1. Picture: AAP

The childcare sector is nervously watching how families respond to the end of free childcare from Monday, as some industry leaders warn attendance may drop.

The government’s childcare relief package was switched off on Sunday and replaced by the pre-coronavirus childcare subsidy, with centres again charging parents for their services.

Childcare workers will also stop receiving the $1500 fortnightly JobKeeper payments from next Monday.

Instead, childcare centres will receive 25 per cent of their fee revenue from the government until September 27 as a “transition payment” and the activity test will be eased until October 4 so eligible families whose jobs have been impacted by COVID-19 can access up to 100 hours per fortnight of subsidised care.

The Australian Childcare Alliance said the model was not perfect but, in the midst of the pandemic, appeared fair and flexible. Alliance vice president Nesha Hutchinson said a majority of families did not fear going “back” to the pre-COVID system.

“If a family is in need, there’s no reason they should be struggling to afford childcare at the moment,” Ms Hutchinson said.

“It’s not quite a snapback, there are still safety nets in place. However, it‘s important the government ensures these protective measures work effectively.”

Early Childhood Australia chief executive Samantha Page said the attendance rates around the country, and before the second Melbourne lockdown, had reached 65-70 per cent of pre-coronavirus levels but it was unclear if that would increase or decrease as the childcare subsidy returned.

“Once fees kick back in families in difficult work arrangements and precarious arrangements might think it’s too much,” she said. “It may increase because services have the capacity to take more children, where they couldn’t under the emergency package. It’s likely to be different in different parts of the country. In parts of the country where they’re heavily reliant on the tourism and hospitality industries, with a lot of families out of work, it’ll probably drop in those communities because people can’t afford the fees.”

Ms Page said ECA members had expressed a high level of anxiety about the government’s transition payment and expected some families would reduce their child’s hours or withdraw them altogether, which could result in fewer jobs in the sector.

Education Minister Dan Tehan said a review of the government’s coronavirus relief package found 99.3 per cent of about 13,400 childcare services were operational on July 1 and the transition package would help centres remain viable as restrictions eased and parents returned to work. “Our government will support families and services as we transition to the original childcare subsidy system. Stopping fee increases during the transition and relaxing the activity test will relieve financial pressure on families that may be doing it tough,” he said.

“The government will pay approximately $2bn in childcare subsidy this quarter to eligible families. The childcare subsidy is means-tested to ensure those who earn the least receive the highest level of subsidy.”

Opposition early childhood education and development spokeswoman Amanda Rishworth urged the government to offer parents more JobSeeker and JobKeeper support or continue providing free childcare “while properly remunerating services”.

Goodstart Early Learning chief executive Julia Davison said the organisation’s 665 centres would closely monitor attendance levels and bookings as they returned to the childcare subsidy.