ECEC regulatory, financial and quality changes from July 1: Are you across them?

As we move into the new financial year it is quite striking how much change is taking place from an administrative, regulatory and financial perspective across the early childhood education and care (ECEC) sector. 

 

Whether it be a bumper increase in the Modern Award, rises in superannuation guarantee contribution rates, changes to National Quality Framework regulations, new paid parental leave scheme rules, a more streamlined provider and service approval process or increases in migrant salary thresholds, there is a lot going on.

 

As such, The Sector felt it would be useful to provide a quick summary of each change to ensure nothing is missed. Please note this is not an exhaustive list. There may be other changes that we are not aware of. 

 

1. Modern Award wages increase from 1 July 2023

 

As part of the Fair Work Commission’s Annual Wage Review all Award Minimum wages increased by 5.75 per cent.

 

The increases will come into effect on 1 July 2023 with team members on the Children’s Services Award 2010 and Educational Services (Teachers) Award 2010 seeing the 5.75 per increase passed through.

 

2. Paid Parental Leave scheme

 

From 1 July 2023, the Paid Parental Leave scheme changed.

 

For children born or adopted after 1 July 2023 parents can claim up to 20 weeks, which is 100 payable days, of pay based on the national minimum wage, up from the previous 18 weeks.

 

3. Superannuation guarantee increase

 

From 1 July 2023, the superannuation guarantee will increase to 11 per cent.

 

This means that employers have to pay superannuation contributions of 11 per cent of a part time and full time employee’s ordinary time earnings, up from 10.5 per cent before 1 July 2023. 

 

4. Migration income salary thresholds

 

From 1 July 2023 applications for 457 visas for team members who are migrants to Australia will need to receive a base salary of $70,000 or the annual market rate, whichever is higher.

 

A notice from the Department of Home Affairs has confirmed that migrant visa salary thresholds are to rise, with the minimum amount to be paid to migrant workers on 457 visas increasing from $53,900 to $70,000.

 

5. Streamlined application processes for new service opening

 

From 1 July 2023 prospective providers can apply to administer the Child Care Subsidy on the National Quality Agenda IT System (NQA ITS), the same portal as new service approval applications. 

 

The move is part of a broader effort to remove administrative inefficiencies in the new service set up process and for the vast majority of applications will see much less interaction with PRODA’s provider entry portal (PEP) and more with the NQA ITS. 

 

6. Changes to some rules in the National Quality Framework – centre based services 

 

From 1 July 2023 a round of changes to the National Quality Framework based on findings from the 2019 NQF Review will come into effect for centre based services. These include:

 

• Updated rules providing flexibility for services when replacing educators during short term absences and resignations.

 

• Broadening of the definition of ‘person with management or control’ of the service to better capture persons exercising significant influence over the operation of services, and closer alignment between the Education and Care Services National Law and the Family Assistance Law on matters relating to the ‘fitness and propriety’ of service providers.

 

• Require outside school hours care (OSHC) providers in Tasmania, South Australia, Western Australia and Victoria to keep ‘program level’ documentation about the educational program, rather than documentation at the ‘individual child level’.

 

7. Changes to some rules in the National Quality Framework – family day care

 

From 1 July 2023 a round of changes to the National Quality Framework based on findings from the 2019 NQF Review will come into effect for family day care (FDC) services. These include:

 

• Allow some adjustments to FDC services that have been operating for at least 12 months, when calculating family day care coordinator to educator ratios. 

 

• Require all FDC educators to hold the minimum Certificate III qualification requirement prior to commencing their role. Existing educators will have a period of up to 12 months to complete their qualifications (not applicable in South Australia).

 

8. Changes to some rules in the National Quality Framework – all services 

 

• Increase several prescribed fees as well as introduce a new category to differentiate fees applied to ‘large’ and ‘very large’ services.

 

• Extending the Excellent Rating period of approval from three to five years.

 

9. New financial reporting obligations for large providers

 

From 1 July large providers must now report financial information to the department, including information about revenue, profits, and leasing arrangements.

 

A large provider is defined as one that operates 25 or more services, shares operation of 25 or more services with another provider or plans to operate or share operation of 25 or more services.

 

10. Families must now pay the gap fee using electronic funds transfer, or EFT

 

From 1 July families must now pay the gap fee using electronic funds transfer, or EFT.

 

Approved providers are responsible for ensuring this obligation is compiled with the department conducting regular audits to ensure providers are collecting gap fees electronically. 

 

And finally the changes to the Child Care Subsidy which come into effect on 10 July 2023. These will impact parents and have been well covered by The Sector and other media outlets.