The Australian Government will invest around $37 billion on child care support over the next four years. This significant investment includes an increase of around $2.5 billion to support the implementation of the new child care package.

The package will make child care more flexible, more accessible, more affordable and targeted to those who need it the most.

The key elements of the package are:

From July 2018, a new streamlined Child Care Subsidy will roll two payments into one.

The Child Care Safety Net, progressively rolled out from July 2016, will improve accessibility, and includes the:
- o Additional Child Care Subsidy
- o Community Child Care Fund
- o Inclusion Support Programme

Key changes for service

Increased flexibility
The package removes requirements for hours of operation per day or days per week. From July 2018, services will be required to operate for a minimum of 48 weeks per year, or 7 weeks per year if the service only provides outside school hours care, with the number of hours of care provided per day, or days per week, a matter for the child care provider to determine.

Streamlined process

The package changes the current approval process for child care services and introduces requirements that more clearly focus on the approval of providers to administer subsidies in respect of the services they operate. This aligns more closely with the approach taken in the Education and Care Services National Law Act 2010, and National Quality Framework requirements.

Strengthened compliance

The package also introduces a series of new obligations on services to comply with the Family Assistance Law and a number of key changes support a strengthened compliance framework to protect payment integrity. A range of new obligations will apply, including:

the ability for the Department of Education and Training to reassess a service approval at any time
an improved approval process as a result of changes to eligibility criteria
a requirement for an approved provider to report educator ‘Working with Children Check’ details
a 28-day limit on backdating children’s attendance records
the ability for the Minister to make legislative instruments to place a pause on child care service applications, in defined circumstances.

New IT system
A new IT system will support the major changes to the child care package and will positively impact child care services, families and all levels of government with streamlined processes, reduced administrative and regulatory burden and increased information sharing.

Transition

The Government recognises that the transition from the existing child care system to a new package will be a significant change for Australian families.

Under the new package, existing child care payments will be replaced with the Child Care Subsidy and Additional Child Care Subsidy. Families and services will have time to adjust to the new model and we are working towards a seamless introduction of new systems and arrangements.

All families who use, or need to use, child care in the future will be kept informed of the progress of the changes and given timely information on how they may be affected.

Centrelink will contact families directly to provide information on current entitlements and how they may change under new arrangements. This may include asking families for additional information, to ensure that they move onto the new payment system smoothly.

Implementation Timeline

July 2018

Child Care Subsidy and Additional Child Care Subsidy commence (replacing Child Care Benefit and Child Care Rebate)
Community Child Care Fund commences
New Compliance Framework commences