Economics
LDC attendance records another new record in Q4 2019
Jason Roberts
Jul 14, 2020
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The total number of children attending long day care (LDC) services in the three months ended December 2019 reached another new record according to the latest release of the Department of Education, Skills and Employment’s (DESE) Child Care in Australia report. 
The increase is most likely driven by a better understanding by both families and services of the new rules that came into effect in July 2018 and more efficient processing occurring at Centrelink. 
The report, which is issued quarterly but with a significant time lag, aims to capture the key trends in play across the early childhood education and care (ECEC) sector using data extracted from the child care subsidy (CCS) database.
As well as the continued growth in LDC demand other notable highlights in this release were entitlement spending of in excess of $2 billion for the second consecutive quarter, fee increases at the higher end of the last three year range and an increase in the number of children accessing additional child care subsidy (ACCS) for the fifth consecutive quarter, to levels last seen prior to the CCS regime being introduced.
LDC enrolment increases to new highs, but OSHC rate of growth slows materially
The number of children enrolled in an LDC service in the three months ended December 2019 was 797,760, up 3.6 per cent on the same period last year, and 2.1 per cent higher than the previous record attendance recorded in Q2 2019, with the average weekly hours spent in care at 29.8, up 1.0 per cent from last year.
The number of families using care also saw another large jump cementing a trend that has been in place since the introduction of the child care subsidy in July 2018.
Outside school hours care (OSHC) attendance in the period was 465,370 children which represents an increase of 2.7 per cent year on year, substantially lower than that recorded in the last four years which averaged a 7.5 per cent increase in the December quarter.
It is unclear why OSHC growth levels pulled back to such a degree versus previous years.
CCS entitlements top $2 billion for second consecutive quarter
A total of $2.1 billion was distributed in CCS and ACCS in the December quarter. This was the second highest amount on record, just behind the $2.2 billion distributed in Q3 2019 and 9.3 per cent ahead of last year.
The spread of total entitlements was as expected heavily weighted to LDC which took 81 per cent of all CCS, around $1.7 billion and 81 per cent of all ACCS, around $15.5 million.
OSHC received 9 per cent of all CCS equal to around $0.2 billion and 5.5 per cent of ACCS, around $1.1 million.
ACCS continues to rise driven by child wellbeing and temporary financial hardship
A total of 20,060 families accessed ACCS through the child wellbeing and temporary financial hardship categories combined, a 52 per cent jump on the same period last year and 28 per cent higher than prior to the implementation of the CCS subsidy in July 2018.
The increase is most likely driven by a better understanding by both families and services of the new rules that came into effect in July 2018 and more efficient processing occurring at Centrelink. Notably, the main driver of the increase is coming from the Child Wellbeing category which has seen a doubling of the number of children accessing the subsidy in the last eighteen months.
Increases of this scale have not been replicated in the grandparent, temporary financial hardship of transition to work categories, all of which are at or a bit below the last quarters levels.
LDC fees hold steady in middle of last six years range with 5.1 per cent gain
Hourly gross fees at LDC services rose to $10.25 per hour, an increase of around 5.1 per cent compared to last year and around 14 per cent lower than the CCS fee cap of $11.98 per hour.
Overall the rate of increase is in the middle of the increases recorded in the last 6 years but is still at the top end of the range since the implementation of the CCS subsidy in July 2018.
The total percentage of LDC services with fees above the CCS fee cap has held steady again for the third consecutive quarter at 13 per cent. This measure provides a useful indication as to whether fees are rising at a rate higher than the fee cap inflation.
The current readings suggest an element of stability in that regard with fee increases tracking the CCS increases.
Family day care (FDC) now has 23 per cent of all services charging more than the hourly rate and OSHC 16 per cent. These numbers are consistent with previous quarters.
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