Transition payment advice as Vacation Care services gear up for winter break
A number of outside school hours care services who operate “vacation care only” programs have been left confused by the timing of transitional payment arrangements, which for some states commence in the middle of the winter school holiday break, meaning families will have one week of free care, and one week of CCS funded care.
The information and advice given below is specific to those services who offer Vacation care only. While the information and advice given is consistent with all Child Care Subsidy (CCS) funded services, there is specific detail given for services delivering vacation care only.
The Early Childhood Education and Care Relief Package (Relief Package) has been extended until 12 July 2020, after which time the CCS and Additional Child Care Subsidy (ACCS) will recommence along with a range of new measures to support the sector and its families through the transition, including a relaxed activity test for families and a new Transition Payment for providers.
From 13 July 2020, providers will once again receive CCS payments on behalf of families, and parents will return to making their co-contribution to childcare fees.
In addition to CCS, the Government will provide a Transition Payment to all approved providers that previously received CCS and new providers that were approved during the Relief Package period. The same arrangements will apply to privately run services, those providers operated by state, territory and local governments, and not for profit providers.
In practice, this will mean that those currently eligible and being paid the Relief Package payment will receive a Transition Payment offer in the first instance. Transition Payments are up to 25 per cent of providers’ fee revenue or the existing hourly rate cap, whichever is lower, in the relevant reference period.For most Vacation Care only services will be the Easter/April holiday period.
Action required by providers
Recognising the unique situation of Vacation Care, the Department of Education, Skills and Employment (the department) will work with Vacation Care only providers directly to manage the process, a factsheet from the Department reads.
Vacation Care providers will receive an email to offer an Australian Government grant for a Transition Payment relevant to the vacation periods falling between 13 July and 27 September 2020. The department has established an online process, using DocuSign, for providers to review and agree to this offer. The email will outline how to review and sign the offer.
Once the grant agreement has been signed and returned, transition payments will be into the bank account currently nominated for a provider’s service in the Child Care Subsidy System (CCSS). Providers are responsible for ensuring their bank account details in the CCSS are correct.
To receive and maintain the Transition Payment providers must offer an Employment Guarantee by continuing to employ those employees over the transition period who were working or being paid JobKeeper in their relevant Employment Guarantee fortnight, and cap fees to the level in the relevant Relief Payment reference period.
Providers must also not claim JobKeeper for ineligible employees. JobKeeper will cease from 20 July 2020 for employees and business participants of a CCS approved provider and childcare service.
A condition of receiving the Transition Payment is that providers must maintain the same fees charged in the relevant reference period, which for most Vacation Care only providers this will be the Easter/April Holidays.
The intent of this restriction, the Department said, is to support both childcare service viability and help families access quality childcare without the burden of fee increases while they are increasing their workforce participation activities after the COVID-19 crisis. Additionally, providers receiving the Transition Payment should not be changing their service offering or increasing or adding new administrative fees, the Department said.
During the transition period (from 13 July 2020 to 27 September 2020), employers must continue to employ those employees who were working or being paid JobKeeper during the Employment Guarantee fortnight (remembering that for most Vacation Care only providers this will be the Easter/April Holidays).
The Employment Guarantee includes all employees who worked any hours in the Employment Guarantee fortnight plus any JobKeeper recipients who did not work during that fortnight.
All of these employees must continue to be employed, including being offered work during the transition period of 13 July to 27 September 2020. The Employment Guarantee does not include contractors and does not include employees on long-term leave.
It does include employees on short term leave, such as annual and sick leave. Providers must take all reasonable and proportionate steps to continue to employ the relevant staff and offer them work.
The department will monitor compliance with the conditions, including responding to complaints made to the tip-off line and by sharing data with other government agencies, a statement noted. The department may ask providers at any time to provide supporting documentation that shows they are meeting their conditions.
Given that JobKeeper payments for ECEC services receiving the relief package will cease from 20 July, providers must not continue to claim JobKeeper for employees who are not eligible. Providers will not be able to recover JobKeeper payments paid to employees after this date.
The Department will also undertake compliance and assurance action in relation to the transition arrangements, working with partner agencies including the ATO.
The Tax Commissioner, a departmental statement read, may make an entity that has made a false statement or engaged in fraud liable to repay the amount. This liability applies on top of the existing significant criminal or administrative penalties for false statements and fraud.
JobKeeper Payment obtained by fraud or misstatement will be recovered from wrongdoers even where the payment has passed through entities not involved in the fraud. In addition, sanctions under the Family Assistance Law, including cancellation of provider approval, may apply.
Timelines for transition
The fortnight covering 6-19 July is the final fortnight during which employees of a CCS approved service and business participants (for example sole traders) operating a childcare service are eligible for JobKeeper.
For the fortnight 20 July – 2 August employers are no longer required to meet the wage condition (i.e. $1500 per fortnight) for employees.
Employers must make the JobKeeper Business Monthly Declaration for July fortnights (22 June – 5 July and 6– 19 July) between 1 – 14 August. Employees already receiving JobKeeper will continue to be eligible for the purposes of submitting this declaration. Payments should be made to employers from the ATO around four business days after the declaration.
Between 1-14 September employers must make the JobKeeper Business Monthly Declaration for August fortnights (20 July – 2 August, 3–16 August and 17–30 August). This declaration must not include any employees that will be ineligible for JobKeeper.
The ATO may also require providers to provide additional information in relation to employees and JobKeeper. More information will be available soon on the ATO website.
This information was last updated on 17 June 2020. Please regularly check dese.gov.au/covid19/childcare to help ensure that you are using the latest version of this information.