Evidence of moderating ECEC demand continues to build says DoE’s latest Child Care in Australia report
The Sector > Provider > General News > Evidence of moderating ECEC demand continues to build says DoE’s latest Child Care in Australia report

Evidence of moderating ECEC demand continues to build says DoE’s latest Child Care in Australia report

by Jason Roberts

March 07, 2023

The number of children attending an early childhood education and care (ECEC) service has failed to meaningfully increase above previous high levels achieved in 2019 across all settings according to the latest Child Care in Australia report from the Commonwealth Department of Education.


A total of 1,335,660 children attended either a long day care (LDC) service, family day care (FDC) service or outside school hours care (OSHC) service in the first quarter of 2022 continuing a string of reports with numbers in and around that level Q2 2019. 


The data used to compile the reports is sourced from the Child Care Subsidy (CCS) administrative systems and is released quarterly but with a nine month lag. 



Across the three settings, FDC enrolments remain pressured by an ongoing reduction in schemes and corresponding attendance, OSHC enrolments in the most recent quarter have reached a new high level by a very small margin and LDC demonstrated similar characteristics with a marginal new high recorded in Q4 21. 


However, despite a moderation in the absolute number of children attending care there has been a continuation in the trend to place children in care for longer over the course of a given week. 


On average children are now spending 31.9 hours per week in a LDC service. This is a new high and meaningfully above the previous high water mark registered in the September quarter in 2018, just after the new CCS legislation was implemented. 



It seems like the trend towards longer hours in care per week started to accelerate post the COVID-19 outbreak and has continued to build momentum ever since. 


That being said, the pick up in hours has not been sufficient to reverse recent declines in the total levels of CCS entitlements the Government pays over a given quarter. 


Overall CCS levels fell for the second consecutive quarter and at $2.26 billion are materially low the high point registered in 2021. 



From a setting perspective, LDC still dominates the disbursement of CCS with 83 per cent of all CCS and 85 per cent of all additional child care subsidy (ACCS) going to children in LDC with OSHC, the next largest setting, accounting for just seven per cent of CCS and four per cent of ACCS. 


ACCS, which is only a small fraction of all entitlements disbursed, has also seen reductions in the number of children and families receiving the subsidy and dollar amounts disbursed. 



Overall, the number of children receiving ACCS benefits fell to 41,100 in the quarter and the number of families to 29,190 with the main driver of falls being continued reductions in the temporary financial hardship and transition to work categories.  


And finally, another key standout in this recent release was the continued expansion in the percentage of FDC, and LDC, services that have set their fees above the CCS fee cap. 


38 per cent of all FDC services are now priced above the fee cap and 19 per cent of LDC services with both seeing substantial increases in the most recent quarter reported. 



It should be recalled that the CCS included, by design, a fee cap for its CCS entitlements that was supposed act as a disincentive for providers to raise fees above it as the proportion of daily fee above the caps would not attract any CCS and therefore see costs borne by parents and not the Government. 


It seems that overtime that this particular mechanism has not acted as hoped, with an increasing proportion of providers prepared to price their services at levels above the cap. 


To read the latest DoE report and access relevant data tables please see here.

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