Prime Minister announces suspension of CCS system
The Sector > COVID-19 > Prime Minister announces suspension of CCS system

Prime Minister announces suspension of CCS system

by Freya Lucas

April 02, 2020

Almost one million Australian families are set to receive free childcare for the duration of the COVID 19 pandemic, under a plan announced moments ago by Prime Minister Scott Morrison and Federal Education Minister Dan Tehan in a press conference.


Key points of the announcement include: 


  • Temporary measures are being put in place to protect and ensure the viability of the early childhood education and care (ECEC) sector


  • All children are able to receive free education and care, with priority of access given to the children of essential workers, vulnerable children, and children who cannot be cared for at home


  • ECEC services will receive direct payments from the Government, meaning there are no financial contributions put forward from families for the duration of the changes


  • Families who have already withdrawn from care will be able to re-enrol without having to attend care, at no cost, to secure their place for the end of the pandemic


  • Services who need extra payments for exceptional circumstances – such as a high population of vulnerable children, or those working with many families in frontline services – will be eligible for additional support


The plan will see the Government pay 50 per cent of a services revenue, up to the existing hourly rate cap, based on a point in time before parents started withdrawing their children in large numbers, but only so long as services remain open and do not charge families for care, the Prime Minister said.


The funding will apply from 6 April based on the number of children who were in care during the fortnight leading into 2 March, whether or not they are still attending services.


Until the payments arrive, services will be able to waive gap fees for families who keep their children home, and families will be able to use the 20 extra absence days the government has funded for coronavirus related reasons without giving up their place in a child care centre.


“Re-starting your enrolment will not require you to send your child to child care and it certainly won’t require you to pay a gap fee” the Prime Minister said.  


It is hoped by the Prime Minister that the plan will support families while also ensuring as many of the sector’s 13,000 child care and early learning services as possible could keep their doors open for workers and vulnerable families who need those services.


Priority of access rules


Expanding on this, Mr Tehan said that services would be asked to prioritise the attendance of essential workers, and those children who were unable to be cared for at home, as well as those children from vulnerable circumstances. After those children had been supported, he said, services should re-engage with any families who had withdrawn their enrolments, and encourage them to re-enrol. 


When will payments be made? 


The new system will see payments start flowing at the end of next week. The system will be reviewed after one month, with an extension to be considered after three months. The payments will be paid in lieu of the Child Care (CCS) and Additional Child Care Subsidy payments.


An important point, emphasised by both the Prime Minister and Mr Tehan, was that the changes will work in tandem with the JobKeeper payment, “at a time where enrolments and attendance are highly unpredictable.”


“This plan complements more than $1 billion we expect the sector to receive through our new JobKeeper payment to help ensure many of the 200,000 vital early education workforce can stay connected to services” Mr Morrison said.


By making the payments based on the March 2 baseline, the Prime Minister noted, the sector will receive up to $1.6 billion over the coming three months from taxpayer subsidies, as opposed to an estimated $1.3 billion if current revenues and subsidies had continued based on the existing system and the significant reduction of enrolments the sector has seen.


Assessment and Rating visits


Hinting at the burden of regulation during the pandemic, the Prime Minister noted that “the states and territories are looking at how to reduce the regulatory burden on the child care services which will further help them to remain viable” and that the Education Council of the country’s education ministers, as well as National Cabinet, will address regulation this week.


Preschools and OSHC


Both the preschool sector and the outside school hours care (OSHC) sector were recognised in the press conference, with the Prime Minister noting that the Government is “providing certainty to the preschool sector in recognition of its importance to a student’s formal education” by providing $453.2 million for preschools in 2021 to support almost 350,000 children to attend preschool. 


For the OSHC sector, Minister Tehan confirmed that the new system will extend to OSHC, encouraging providers to look into the measures, and assuring them that measures can be implemented for the upcoming Vacation Care period, with figures from Vacation Care in Term 3 2019 to be used as a metric. 


Additional support available to the sector


There is a range of government assistance available to early learning and child care operators outside of the changes announced today, the Prime Minister said, noting that most services operate as small businesses, with 79.9 per cent of providers operating a single service, while 95.9 per cent operating fewer than five. The available assistance includes:


  • The $130 billion JobKeeper payment
  • A cash flow boost of at least $20,000 and up to $100,000 with payments equal to 100 per cent of businesses’ and not-for-profits’ salary and wages withheld
  • Loan guarantees so businesses can get working capital


The National Cabinet is also considering short-term intervention for commercial tenancy arrangements when they meet tomorrow, the Prime Minister said. 


Child care services seeking health and situation information about COVID-19 should contact the 24/7 National Coronavirus Health Information Line on 1800 020 080. 

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