Coronavirus: What the PM’s new free childcare system means for parents

Australia’s childcare system overhaul will offer children and their parents free care during the coronavirus pandemic.

From Sunday night, the old childcare system will be turned off and the new system will turn on. Picture: iStock

Australia’s childcare system will be overhauled from Sunday night for at least six months to offer children and their parents’ free early education during the coronavirus pandemic.

The Morrison government on Thursday announced a three-month, $1.6bn package for the sector’s 13,000 centres.

Childcare educators will also be eligible for about $1bn through the fortnightly $1500 JobKeeper scheme.

How will the new childcare system work?

From Sunday night, the old childcare system will be turned off and the new system will turn on.

The government normally pays early childhood education and care services the childcare subsidy and additional childcare subsidy but from April 6 this will be replaced by weekly payments made directly to the providers.

The amount paid to each provider will be worth 50 per cent of their fee revenue - up to the childcare subsidy hourly rate cap - based on how many children they had in their care in the fortnight leading up to March 2.

The government estimates these new payments will be worth $1.6bn over three months. The arrangements will be in place for at least six months, meaning the final package could cost in excess of $3bn. The first payments are due to start flowing to providers before Easter.

Is the new system free for parents?

Yes. Services can choose to waive the gap fee parents pay (the difference between the government-funded childcare subsidy and what the childcare facility charges) due to the impact of the coronavirus, with the measure to be backdated to 23 March.

Is it free for parents even if they’re not working?

Yes. While the government wants to prioritise the children of essential workers, vulnerable children and those families who have an existing relationship with a childcare centre, any parent who can find a placement for their child will be able to access free childcare for the next six months. The parent does need need to be working to qualify.

Will after school and vacation care be free too?

Yes. Any service provider that receives the childcare subsidy will be free for parents during the coronavirus pandemic from April 6.

Which centres will be eligible for the new childcare payments?

Any of Australia’s 13,000 childcare centres will be eligible.

To receive the weekly payments, a centre must remain open and provide care for those parents who need children cared for during the coronavirus crisis.

The government wants to prioritise children of essential workers and vulnerable children.

Childcare centres must also seek to re-enrol children whose parents already withdrew them from the facility.

Do childcare workers get the JobKeeper payment?

Yes. The government said early childhood education and childcare services do not need to apply for the payments, they will be paid automatically.

This is because once the government begins paying providers 50 per cent of their fee revenue instead of the childcare subsidy, their annual turnover will be reduced by 50 per cent and they will become eligible for the JobKeeper scheme.

It is still unclear whether Goodstart Early Learning, whose annual turnover is more than $1bn, will qualify for the JobKeeper payments as it would have to prove its turnover has been reduced by 50 per cent or more under the eligibility guidelines.

Sources: Department of Education, Skills and Employment, Education Minister Dan Tehan’s office