Important changes to the incentives and inducements space – ECEC providers take note

Freya Lucas

Nov 24, 2022

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Early childhood education and care (ECEC) providers will no longer be able to offer some types of incentives (also known as inducements) to encourage families to choose their service and enrol their children from 1 January 2023, in a bid to “support a fairer market across the sector”.

Services will no longer be able to offer families incentives which are financial (for example cash back, vouchers to external providers) or incentives that are not directly associated with the quality or provision of education or care, for example iPads, tablet computers, or other electronic devices.

Other incentives, like holidays, will also no longer be allowed from the start of next year.

Discounted or free care is not affected by this ban and may still be offered. However, fee discounts must be reported correctly if any child care subsidy (CCS) is being claimed.

Services are still free to advertise to prospective families, and to offer free site visits or trial periods. Marketing merchandise to the value of $30 per complying written arrangement is also an option for services - for example a coffee mug with the service’s name, or a tee shirt for a child.

By 1 January 2023, services must:

stop offering inducements that are not allowed
ensure any services or educators under an approved providers remit stop offering inducements that are not allowed
update marketing material, both printed and online, to remove inducements not allowed.

The measure is part of the Australian Government's commitment to improving the transparency of ECEC fees. It supports a fairer market across the sector. The Department of Education has warned that it may take action against providers that continue to offer inducements not permitted under the law. This could include:

putting conditions on provider approval
issuing an infringement notice and penalty
suspending or cancelling approval.

Questions should be directed to the CCS Helpdesk on 1300 667 276 or by email. For those who are concerned about activity, post 1 January 2023, which breaches the new inducement rules, a tip-off line is available - 1800 664 231.

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