Parents across Australia face a troubling dilemma as they weigh up job losses and health concerns, about whether to abandon a hard-won childcare place.
- The Government will assist families in financial distress with childcare expenses for up to 13 weeks
- It has also increased the number of allowable absences from 42 to 62 days
- The industry has asked the Government to waive the fee gap for children who aren’t attending
Mums and dads have been urged by state premiers to keep their children home from school, and many have applied the same logic to their younger children.
Previously, the demand for child care meant parents in some areas were on waitlists of up to two years.
Now, these waitlists have been dramatically slashed, with an estimated one-in-three children no longer attending care.
“It is entirely unsurprising that families are applying these messages to their younger children, and keeping them home from early learning and care,” Early Childhood Australia (ECA) CEO Samantha Page said.
“The implications for the broader economy are significant: a slow or incomplete resumption of early learning and care service operation will hamper or prevent parents’ return to work.”
Who pays for child care?
With household budgets under strain and kids kept at home because of health concerns, families have to decide whether to keep paying the gap fee to hold their spot, or to cancel their enrolment altogether.
Parents share the cost of child care with the Federal Government, except for very low or very high-income earners, where either Government or the family pays the entire cost.
On average, the Federal Government covers 60 per cent of the cost through its Child Care Subsidy (CCS) which is paid directly to childcare centres.
Parents pay the remainder, and for a couple earning the average wage whose child attends care five days a week, the gap fee is $5,782 annually — meaning parents are out of pocket $111.19 per week.
Should parents keep paying fees or cancel enrolment?
Currently, if your children are at home and you’re struggling to make rent, you may have no choice but to stop paying the gap fee and let your childcare spot go.
“Having made the decision to keep their children at home, most families are then acting very rationally [in economic terms] by cancelling their child’s enrolment,” Ms Page said.
But there is help available for families who want to keep their children enrolled, even if they’re not attending during the pandemic.
Prime Minister Scott Morrison says child care is an essential sector crucial to keeping the economy running, and Federal Education Minister Dan Tehan has already announced one assistance package for parents and industry.
Additional to this, parents can also access a COVID-19 financial hardship Child Care Subsidy.
Under this scheme, eligible families who can prove loss of income can have their entire childcare costs paid by the Government for up to 13 weeks.
“These reforms will support the families of the 1.3 million children in child care, and the 200,000 staff in the early childhood education and care sector,” Mr Tehan said.
But the industry said it was taking around two weeks for applications to be processed, and that operators needed the revenue more urgently.
The Government also tried to keep children in the system by extending the number of allowable absences from 42 to 62 days.
This meant they could keep kids home while they were worried about them being sick without losing their subsidy.
They do still have to pay their gap fee, even when the children are at home.
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Saving your childcare centre
Much of the industry said it would shut down if too many parents chose to stop paying and forfeited their spot in child care.
When parents cancel, the childcare centre loses not just the parental payment but the Federal Government’s CCS money too.
Childcare centres across the country have let casual staff go and many are warning they are days away from having to close their doors.
The industry and academics said the situation was creating the industry’s biggest-ever crisis.
“Previously, the biggest-ever crisis was over 1,000 childcare centres at risk of closure in 2008, when major provider ABC Learning was in financial trouble,” Dr Jen Jackson from the Mitchell Institute said.
“The Government stepped in to reduce the impact on families with a $22 million bailout. The COVID-19 crisis is even bigger, and needs a bigger response.”
The industry is appealing for immediate aid, warning the future impact on parents could be severe and long lasting.
“In the short-term there will be fewer jobs to go around in the early-learning sector [and] the big structural problem is that operators will leave the sector and not come back,” Ms Page said.
“The other factor is the ragged nature of the economic recovery after the pandemic.
“It will be very difficult to forecast the resumption of employment by parents, and this will make it very difficult for … operators of early-learning and care services to invest in opening or reopening for business.”
Dr Jackson has long argued for Early Childhood Education to be funded like primary schools, to insulate parents from shocks like COVID-19.
She said this was the industry’s second major crisis in a decade.
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“Childcare provision in Australia is a patchwork of private businesses and not-for-profit services,” she said.
“Its funding is stitched together from Commonwealth childcare subsidies, state government preschool funding, and substantial fees charged to families.
“When a patchwork sector is under pressure, the seams come apart. Businesses fail and not-for-profit services are no longer viable.”
The Federal Opposition and the states have been lobbying for a decision to be made quickly, arguing the situation is so time sensitive centres will not survive until the Government’s recently announced JobKeeper payment begins to flow.
“Unfortunately the JobKeeper payment announced yesterday will not support businesses with their payroll until May,” Labor’s Shadow Minister for Early Childhood Education, Minister Amanda Rishworth, said.
“We are hearing this is not soon enough for centres to keep their doors open.”
How to keep childcare providers afloat
Some operators would like the Federal Government to waive the gap fee for parents when children are not attending so they still received the CCS.
That would mean parents could keep their place without sending their children, and money would still flow to childcare centres.
The industry is also lobbying for the subsidy to be paid to childcare centres for six months at attendance levels on March 2, regardless of how they have fallen since.
They believe required services need to be able to afford to retain 80 per cent of their staff.
There is evidence parents who are health workers are being forced to stay home in the UK because childcare services have closed.
Extra relief was discussed at last week’s meeting of state and federal ministers with the Commonwealth and the states clashing over when and how relief would flow.
The ministers meet again this week, but it now appears any relief for parents will not be formalised until the National Cabinet meeting on Friday, at the earliest.
Prime Minister Scott Morrison said the advice remained the same – that attending school and child care was safe.
“Previous advice on schools has not changed,” he said in a statement.
“National Cabinet agreed to consider arrangements for early-childhood and childcare facilities at their next meeting on Friday [April 3].”
There is evidence Early Childhood Education and continuity could be valuable for young children during times of trauma and disaster.
“Skilled early childhood educators can build children’s resilience to stress. They teach children how to stay calm, promote curiosity instead of fear, and develop their confidence in coping with challenges,” Dr Jackson said.
Dr Jackson addded children were always learning and if you did opt out, parents should aim to keep things rolling at home.
“Ask lots of questions and invite the child to think for themselves. Playful learning experiences like make-believe also help children learn and make sense of their world,” she said.
“Young children learn while they are playing, and a caring, interested adult is the best learning resource that they can have.”
Parents wondering whether to stay or go should stay tuned.
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