ECA calls for funding guarantees in Relief Package review

Early Childhood Australia (ECA) has published their submission to the Department of Education, Skills and Employment (DESE) in response to their call for feedback to inform the four week review of the Early Childhood Education and Care (ECEC) Relief Package launched in response to the COVID-19 pandemic in April. 

The eight page document provides a breakdown of the ECA’s position on the current package, as well as eleven recommendations addressing policy shortcomings and opportunities to improve outcomes such as funding guarantees, activity test changes, a new funded transition period and more. 

This article aims to summarise the key points highlighted in the submission and will be broken down into three sections consistent with the structure of the used in the submission itself. 

Services struggle as supply and demand dynamics upended by ECEC Relief Package 

Although the ECEC Relief Package and the financial support it provided the sector was acknowledged as meeting an urgent need due the sudden onset of COVID-19 and stay at home requests from state and territory Governments, the ECA noted that the impact of the Relief Package has been highly differential due to the diversity of the ECEC sector and the specific circumstances that providers across different settings have experienced. 

To highlight the range of outcomes in attendance and enrolments across its member base, the ECA conducted a survey of 511 members in long day care, outside school hours care and family day care settings, asking them to comment on attendance levels in the last week of April, compared with ‘pre-pandemic’ levels. 

70 per cent of all services surveyed reported attendances 74 per cent or lower than pre-pandemic levels and 43 per cent reporting enrolments at 74 per cent or lower than pre pandemic levels. 

The submission then goes on to note that the rules around JobKeeper eligibility and also “top up” payment availability had severely disadvantaged some members of the ECEC community and to some degree limited the effectiveness of the two schemes working together. 

In addition, the submission highlights that their member base had responded to the cuts in revenue by rebasing their operations to ensure income matched expenses. The consequence of these actions saw opening hours shortened and / or the availability of places reduced, which, when combined with increased enquiry levels from families seeking “free” care, created a supply / demand squeeze that were causing “great difficulty for services, families and children” as they manage difficult decisions around attendances.  

The ECA made the following recommendations to address ECEC Relief Package problems:

1. Guarantee additional funding (via Exceptional Circumstance Supplementary Payments) to all approved providers that are ineligible for JobKeeper, including providers operated by state, territory and local governments. 
2. Provide clear guidelines to early education and care providers on how to prioritise enrolments for the remainder of the Relief Package period.
3. Design and implement a transition period, to realign demand, supply and funding before the CCS system recommences.

Proposed new funded transition period to prepare sector and families to CCS return

The ECA has called for a “transition period” to be created post the scheduled cessation of the ECEC Relief Package on 28 June 2020 to enable parents, educators and families to prepare for the resumption of the CCS system and the end of “free childcare”. 

The transition period would run from 29 June to 28 September.

During this period services would continue to receive ECEC Relief Package payments but the submission proposed that the amount received in this period be explicitly tied to the real time occupancy levels relative to their reference period occupancy levels so the higher occupancy the higher the percentage of reference period revenue they would receive.  

For example, if attendance was 50 per cent or below the reference period attendance levels then the service would continue to receive a 50 per cent of revenue relief package payment plus JobKeeper. 

But if attendance was between 51 per cent and 65 per cent of the reference period they would receive 75 per cent of the revenue plus JobKeeper in the reference period, instead of 50 per cent with contributions rising as occupancy rises. 

This calibrated approach would enable services to cater for higher occupancy, as higher income would enable higher expenses, and ensure that more families can access the education and care they require without putting significant pressure on service managers. 

Recommendations to support transition period proposal:

1. Make transition payments to service providers, with the size of the transition payment determined by attendance numbers at each service.
2. Maintain the Exceptional Circumstance Supplementary Payment fund for providers who require extra assistance.
3. Maintain fee-free attendance for all children.
4. Suspend the activity test until 1 January 2021 

Fine tuning the CCS system to account for a post COVID-19 world

In the submission’s final section the ECA highlighted that operating conditions post the COVID-19 pandemic will be different and called on decision makers to use the transition period to ensure that the reinstated CCS system is fit for purpose for the future. 

A key focus is to ensure that families who have not managed to transition back to consistent and stable work are able to still access care, and in order to do that the ECA is calling for 20 hours per week of subsidised care and the removal of the associated activity tests for these hours. 

In addition, and in recognition of the challenges faced by services not being able to waive parent gap fees as the pandemic hit attendance, a call to provide services with the authority to waive gap fees should they need to, as well as a reconsidering of how funding is allocated to more vulnerable groups, including Aboriginal and Torres Strait Islander communities. 

As such, ECA made the following recommendations: 

1. Restructure the CCS to provide 20 hours of early childhood education and care to all children (from the end of paid parental leave to the transition to school) with no out-of  -pocket costs to parents. 
2. Provide services with the authority to waive the parent component of the fee when children are absent.
3. Consider the potential benefit of community-based responses funded on a population basis, rather than an individual funding model for vulnerable groups.
4. Abolish the activity test for at least 20 hours of care per week.

To read the ECA submission please click here.