EXPLANATORY STATEMENT

Issued by the authority of the Minister for Education

A New Tax System (Family Assistance) Act 1999

Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022

AUTHORITY

The Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022 (Amendment Rules) are made under subsection 85GB(1) of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) as construed in accordance with subsection 33(3) of the Acts Interpretation Act 1901 (Acts Interpretation Act).

Under subsection 33(3) of the Acts Interpretation Act, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke and amend or vary any such instrument.

PURPOSE AND OPERATION

The Amendment Rules amend the Child Care Subsidy Minister’s Rules 2017 (Principal Rules) to provide continued targeted COVID-19 and emergency support for child care services and families.

These amendments provide certainty and flexibility to families and services impacted by emergencies (such as natural disasters) and COVID-19, retaining measures that encourage families to maintain enrolments, give services flexibility to offer fee relief when children are unable to attend, and support service viability.

The COVID-19 related amendments include:

• Providing 10 extra allowable absence days, from 42 days to 52 days, in the 2022-23 financial year, recognising the continued impact of COVID-19 on child care attendance.
• Until 30 June 2023, providing additional absence days once a child’s 52 allowable absence days have been exhausted, if a child is absent because the child, or a member of that child’s household, has returned a positive COVID-19 test result in the seven days prior to the absence.
• Providing an additional circumstance in which Child Care Subsidy (CCS) is payable in respect of sessions of care that the service did not provide, but would have otherwise provided, because it was closed or partially closed. Namely, where the service is unable to meet required child-to-educator ratios because its educators have COVID-19.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of child care ‘gap fees’ (the difference between the child care fees charged by the provider and an individual’s entitlement to CCS in relation to those fees, i.e., the individual’s ‘co-contribution’ to child care fees) when the service is unable to meet child-to-educator ratios because its educators have COVID-19.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of gap fees if a child is absent because a child, or a member of that child’s household, has returned a positive COVID-19 test result in the seven days prior to the absence.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of gap fees for children not attending care because they are at higher risk of severe disease from COVID-19.
• Extending from 30 June 2022 until 30 June 2023, payment of CCS for absences up to 7 days prior to a child’s first attendance, or after their last attendance, when a child or a member of the child’s household has returned a positive COVID-19 test result.

The emergency support related amendments include:

• Clarifying the circumstances in which additional support is available during periods of emergency. Clarifying that a service is eligible to receive CCS only if the service is closed as a direct result of an emergency, during the emergency.
• Continuing as an ongoing measure, a previously temporary measure that provided extra allowable absences for families during a period of emergency.
• Continuing as an ongoing exemption, a previously temporary exemption from the requirement on services to enforce the payment of gap fees for children not attending care during a period of emergency.

The Amendment Rules also make it a condition of a provider’s continued approval that providers not offer inappropriate benefits or inducements to entice families to enrol their children at child care services.

REGULATORY IMPACT

The Office of Best Practice Regulation (OBPR) has advised no Regulatory Impact Statement is required for the Amendment Rules and assessed the Amendment Rules as having a no more than minor regulatory impact (OBPR22-02894 for Schedule 1 and Schedule 2; OBPR22-02752 for Schedule 3).

COMMENCEMENT

Sections 1 to 4, Part 2 of Schedule 1, and Part 2 of Schedule 2 of the Amendment Rules commence on the day after registration.

Schedule 3 of the Amendment Rules commences on 1 January 2023. This future commencement date is to ensure providers are given sufficient time to change any existing practices to ensure compliance with the new condition of continued approval that providers not offer inappropriate benefits or inducements to entice families to enrol their children at child care services.

Part 1 of Schedule 1 and Part 1 of Schedule 2 commence on 1 July 2022.

The provisions that commence retrospectively have a beneficial effect on stakeholders and do not affect a person’s rights so as to disadvantage the person, or impose a relevant liability on that person.

Part 1 of Schedule 1 contains provisions relating to coronavirus measures that commence on 1 July 2022.

Part 1 of Schedule 2 contains provisions relating to emergency support measures that commence on 1 July 2022.

Both Parts make amendments to the Principal Rules that provide support to families and services adversely impacted by the COVID-19 pandemic or emergencies, including natural disasters.

These include amendments that:

• provide extra allowable absence days to ensure families continue to receive CCS for days the child cannot attend child care due to COVID-19 reasons;
• provide for CCS to be paid where a service is closed or partially closed, and cannot meet required child-to-educator ratios due to its educators having COVID-19;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee if an individual or child has COVID-19, or the child is at higher risk of developing serious illness as a result of COVID-19;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee where they have insufficient educators to provide care due to those educators having COVID-19;
• provide extra allowable absence days to ensure families continue to receive CCS for days when the service is closed as a result of an emergency, or a child cannot attend care as a direct result of an emergency;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee if a service is closed as a result of an emergency or a child cannot attend care as a direct result of an of emergency.

These measures are entirely beneficial as they protect service viability and provide financial benefits for families using child care.

Item 40 of Part 2 of Schedule 2 inserts new clause 3.3 of Schedule 3 to the Principal Rules, which will have application on a date before the Amendment Rules are registered. Specifically, the measure provides, for the purposes of subsection 10(3A) of the Family Assistance Act, that a service does not need to be provided with a medical certificate under section 10(3)(e) of the Family Assistance Act, in order to access additional allowable absences, where the child, the individual in whose care the child is in, the partner of that individual, or an individual with whom the child lives, receives a positive COVID-19 test result, and the service has been given evidence of that positive COVID-19 result. This is a beneficial measure as this evidence would be accepted in lieu of a medical certificate, which reduces the administrative and financial burden for families.

CONSULTATION

The Department of Education (department) consults regularly with stakeholders in the early childhood education and care sector through the Early Childhood Education and Care Reference Group and the Early Childhood Policy Group on COVID-19 and emergency issues to ensure the support is appropriately tailored.

The department also engaged with representatives from the states and territories on the 2022-23 COVID-19 settings to ensure support measures aligned with expected public health directions and advice.

Stakeholders were receptive to the measures and welcomed greater alignment between COVID-19 and natural disaster support measures.  

The department also consulted the National Recovery and Resilience Agency and the Department of Health to ensure measures were consistent with the whole of government approach and with Services Australia to ensure the changes could be implemented.  

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022

The Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022 (the Amendment Rules) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Amendment Rules amend the Child Care Subsidy Minister’s Rules 2017 (Principal Rules) to provide continued targeted COVID-19 and emergency support for child care services and families.

These amendments provide certainty and flexibility to families and services impacted by emergencies (such as natural disasters) and COVID-19, retaining measures that encourage families to maintain enrolments, give services flexibility to offer fee relief when children are unable to attend, and support service viability.

The COVID-19 related amendments include:

• Providing 10 extra allowable absence days, from 42 days to 52 days, in the 2022-23 financial year, recognising the continued impact of COVID-19 on child care attendance.
• Until 30 June 2023, providing additional absence days once a child’s 52 allowable absence days have been exhausted, if a child is absent because the child, or a member of that child’s household, has returned a positive COVID-19 test result in the seven days prior to the absence.
• Providing an additional circumstance in which Child Care Subsidy (CCS) is payable in respect of sessions of care that the service did not provide, but would have otherwise provided, because it was closed or partially closed. Namely, where the service is unable to meet required child-to-educator ratios because its educators have COVID-19.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of child care ‘gap fees’ (the difference between the child care fees charged by the provider and an individual’s entitlement to CCS in relation to those fees, i.e., the individual’s ‘co-contribution’ to child care fees) when the service is unable to meet child-to-educator ratios because its educators have COVID-19.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of gap fees if a child is absent because a child, or a member of that child’s household, has returned a positive COVID-19 test result in the seven days prior to the absence.
• Extending from 30 June 2022 until 30 June 2023, the exemption from the requirement on services to enforce the payment of gap fees for children not attending care because they are at higher risk of severe disease from COVID-19.
• Extending from 30 June 2022 until 30 June 2023, payment of CCS for absences up to 7 days prior to a child’s first attendance, or after their last attendance, when a child or a member of the child’s household has returned a positive COVID-19 test result.

The emergency support related amendments include:

• Clarifying the circumstances in which additional support is available during periods of emergency. Clarifying that a service is eligible to receive CCS only if the service is closed as a direct result of an emergency, during the emergency.
• Continuing as an ongoing measure, a previously temporary measure that provided extra allowable absences for families during a period of emergency.
• Continuing as an ongoing exemption, a previously temporary exemption from the requirement on services to enforce the payment of gap fees for children not attending care during a period of emergency.

The Amendment Rules also make it a condition of a provider’s continued approval that providers not offer inappropriate benefits or inducements to entice families to enrol their children at child care services.

Human rights implications

The Amendment Rules engage the following human rights:

• Article 3 of the Convention on the Rights of the Child (CRC) which recognises that in all actions concerning children, the best interests of the child shall be a primary consideration;
• Article 18 of the CRC, which requires States Parties to take all appropriate measures to ensure that children of working parents can benefit from child care services and facilities; and

Article 3 of the CRC

Article 3 of the CRC recognises that in all actions concerning children, including those undertaken by administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.

The Amendment Rules make changes to the Principal Rules to provide continued financial support to providers of child care services and families who continue to be affected by COVID-19 and emergencies including natural disasters. The measures promote the best interests of the child by helping to maintain enrolments in child care services, reducing disruptions to children’s lives and promoting the wellbeing of children and their families.

Article 18 of the CRC

Article 18 of the CRC, and particularly paragraph 3 of article 18, requires States Parties to take all appropriate measures to ensure that children of working parents have the right to benefit from child care services and facilities for which they are eligible.

The Amendment Rules provide financial relief to providers of child care services and help ensure services can continue to operate to provide child care services and facilities to families in light of ongoing disruptions from COVID-19 and other emergencies.

Accordingly, these Amendment Rules support children and families to continue to be able to access child care in a safe and sustainable manner.

Article 24 of the CRC

Article 24 of the CRC recognises the right of the child to the enjoyment of the highest standard of health.

To this end, the Amendment Rules promote the right of the child to enjoy the highest standard of health by helping to minimise children’s exposure to COVID-19 at child care centres. While ordinarily families would be disincentivised from keeping their child at home for a booked session of child care because they would still be charged for these sessions, these measures allow families to keep their child at home when a member of the household has returned a positive COVID-19 test result, without incurring a financial disadvantage by not attending child care. The Amendment Rules promotes the right of the child to the enjoyment of the highest standard of health by ensuring child care services maintain the highest standard of health possible.

Conclusion

The instrument is compatible with human rights because it promotes the protection of human rights.

Minister for Education, Jason Clare

Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022

EXPLANATION OF PROVISIONS

Section 1: Name

1. This is a formal provision specifying the name of the instrument as the Child Care Subsidy Amendment (Coronavirus Response, Emergency Support and Other Measures) Minister’s Rules 2022 (Amendment Rules).

Section 2: Commencement

2.         Sections 1 to 4, and Part 2 of Schedule 1 and Part 2 of Schedule 2 and Schedule 3 of the Amendment Rules commence on the day after registration.

3.         Schedule 3 of the Amendment Rules commences on 1 January 2023. This future commencement date is to ensure providers are given sufficient time to change any existing practices to ensure compliance with the new condition of continued approval that providers not offer inappropriate benefits or inducements to entice families to enrol their children at child care services.

4.         Part 1 of Schedule 1 and Part 1 of Schedule 2 commence on 1 July 2022.

5.         The provisions that commence retrospectively have a beneficial effect on stakeholders and do not affect a person’s rights so as to disadvantage the person, or impose a relevant liability on that person.

6.         Part 1 of Schedule 1 contains provisions relating to coronavirus measures that commence on 1 July 2022.

7.         Part 1 of Schedule 2 contains provisions relating to emergency support measures that commence on 1 July 2022.

8.         Both Parts make amendments to the Principal Rules that provide support to families and services adversely impacted by the COVID-19 pandemic or emergencies, including natural disasters.

9.         These include amendments that:

• provide extra allowable absence days to ensure families continue to receive CCS for days the child cannot attend child care due to COVID-19 reasons;
• provide for CCS to be paid where a service is closed or partially closed and cannot meet required child-to-educator ratios due to its educators having COVID-19;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee if an individual or child has COVID-19, or the child is at higher risk of developing serious illness as a result of COVID-19;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee where they have insufficient educators to provide care due to those educators having COVID-19;
• provide extra allowable absence days to ensure families continue to receive CCS for days when the service is closed as a result of an emergency, or a child cannot attend care as a direct result of an emergency;
• provide that child care providers are not obligated to take reasonable steps to enforce the gap fee if a service is closed as a result of an emergency or a child cannot attend care as a direct result of an of emergency.

10.     These measures are entirely beneficial as they provide financial benefits for families using child care and protect service viability.

11.     Item 40 of Part 2 of Schedule 2 inserts new clause 3.3 of Schedule 3 into the Principal Rules, which will have application on a date before the Amendment Rules are registered. Specifically, the measure provides, for the purposes of subsection 10(3A) of the Family Assistance Act, that a service does not need to be provided with a medical certificate under section 10(3)(e) of the Family Assistance Act, in order for a family to access additional allowable absences, where the child, the individual in whose care the child is in, the partner of that individual, or an individual with whom the child lives, receives a positive COVID-19 test result, and the service has been given evidence of that positive COVID-19 result. This is a beneficial measure as this evidence would be accepted in lieu of a medical certificate, which reduces the administrative and financial burden for families.

Section 3: Authority

12.     This provision provides that the Amendment Rules are made under subsection 85GB(1) of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act), which allows the Minister to make rules required or permitted to be prescribed by either the Family Assistance Act or the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act).

Section 4: Schedules

13.     This section provides that the Child Care Subsidy Minister’s Rules 2017 (Principal Rules) are amended as set out in the Schedules to the Amendment Rules. 

SCHEDULE 1, PART 1 – Coronavirus response measures commencing on 1 July 2022

Item 1

14.     Item 1 inserts a definition of ‘COVID-19 test’ into section 4 of the Principal Rules.

15.     ‘COVID-19 test’ is defined to mean ‘a rapid antigen test to detect COVID-19 or a reverse transcription polymerase chain reaction test to diagnose COVID-19’.

16.     This definition captures rapid antigen tests (RATs), which are commonly available at pharmacies and can be self-administered at home as well as reverse transcription polymerase chain reaction tests (PCR tests), which are administered by health professionals.

Items 2 and 3

17.     Paragraph 8(1)(g) and subsection 8(4B) of the Principal Rules provide that CCS is not payable for a session of care that was not provided because a service is closed, unless an exception applies.

18.     Items 2 and 3 amend subparagraph 8(4B)(b)(vi) to ensure that if a service does not provide care to a child on a day between 27 January 2022 to 30 June 2023 because it has insufficient educators to meet the educator to child ratio required under the Education and Care Services National Law, due to one or more of their educators testing positive to COVID-19, then that child is still eligible for CCS for that session of care. In order for this provision to apply to a day, the educator must have returned a positive COVID-19 test within a seven day period ending on the day.

19.     Item 2 replaces ‘30 June 2022’ with ‘30 June 2023’ in subparagraph 8(4B)(b)(vi) to extend this measure for another year to 30 June 2023 due to the ongoing impact of COVID-19.

20.     Item 3 amends subparagraph 8(4B)(b)(vi) to change the exception to include educators who have tested positive to COVID-19 in the previous seven days, rather than who are required to isolate. This will provide greater certainty to families and the sector.

21.     The extension of this measure recognises the continued impact of COVID-19 on the child care sector workforce. In combination with the amendments made by items 5 to 9, it supports sector viability by allowing services to receive the CCS component of their fee when they are unable to offer their usual service due to COVID-19 impacts on their staff.

Item 4

22.     Item 4 removes the reference to Part 4 of Schedule 3 to the Principal Rules, which item 42 repeals, from the note at section 57AA.

Items 5 to 8

23.     Subsection 201B(1A) of the Family Assistance Administration Act allows the Minister’s rules to prescribe particular events or circumstances in which a provider is not required to take reasonable steps to enforce payment of gap fees (the difference between the child care fees charged by the provider and an individual’s entitlement to CCS in relation to those fees, i.e., the individual’s ‘co-contribution’ to child care fees) from families.

24.     Clause 2.1 of Schedule 3 to the Principal Rules prescribe the events or circumstances in which a provider is exempt from enforcing payment of hourly session fees.

25.     Item 5 extends the end of the period in which clause 2.1 applies from 30 June 2022 to 30 June 2023.

26.     Items 6, 7 and 8 amend subclause 2.1(13) to provide that child care providers can choose not to enforce the payment of gap fees in the following circumstances:

1. The session of care is on a day between 9 November 2021 and 30 June 2023; and
2. A child does not attend any part of the session of care on that day; and
3. The service is not closed on the day that session of care was provided, or the service is closed on the day the session of care was provided and it mostly provides care to Indigenous children, and
4. The individual, the child, or another member of the child’s household has returned a positive COVID-19 test within a seven day period ending on that day.

1. Currently, this exemption applies between 9 November 2021 and 30 June 2022, where the individual, the individual’s partner, the child or another member of the child’s household was required to isolate or self-quarantine by a health agency. These amendments provide greater certainty to families and the sector in ensuring that providers can choose not to enforce the gap fee in these circumstances until 30 June 2023, when an individual, the child or a member of the child’s household test positive for COVID-19 in the seven days ending on the day of the session of care.
2. These measures promote a safer child care environment (children aged under five are currently unable to be vaccinated, but may still become ill or transmit the virus), empower families to make decisions about their children’s wellbeing and support families through COVID-19 disruptions (for example, where families may be unable to take their children to child care if the child or member of their immediate household has COVID-19).

Item 9

29.     Item 9 amends subclause 2.1(14) of Schedule 3 to the Principal Rules to extend the exemption on providers to enforce payment of gap fees in circumstances where:

1. The session of care is on a day between 27 January 2022 and 30 June 2023; and
2. A child does not attend any part of the session of care on a day; and
3. The service is not closed on the day that session of care was provided, or the service is closed on the day the session of care was provided and it mostly provides care to Indigenous children, and
4. A medical practitioner has certified that, on the day, the child has a medical condition or disability that makes the child at higher risk of developing serious illness from COVID-19, or the child is an Indigenous child.

30.     As it is anticipated that COVID-19 will continue to cause disruptions to families and services over the next year, this exemption has been extended for another year until 30 June 2023 (from 30 June 2022).

31.     These measures provide additional flexibility and fee relief for families with children who are at higher risk of severe disease from COVID-19.

Item 10

32.     Item 10 removes the term ‘services advised or required to close’ from the heading at clause 2.2 of Schedule 3 of the Principal Rules and replaces it with ‘services closed because educators or members of educator’s household return a positive COVID-19 test result’.

33.     This amendment to the heading reflects the changes being made to clause 2.2 under the Amendment Rules.

Item 11

34.     Clause 2.1A of Schedule 3 to the Principal Rules prescribes the COVID-19 pandemic as the particular event or circumstance in which a provider is exempt from enforcing payment of hourly session fees. Clause 2.2 of Schedule 3 to the Principal Rules prescribes conditions for the that particular event or circumstance to be met.

35.     Currently, subparagraph 2.2(1)(a)(iv) prescribes that if an educator for an FDC service at a particular location, or a member of that educator’s household, was required to isolate or self-quarantine by a government agency, then the provider would not be obligated to collect the gap fee from families.

36.     Item 11 amends subparagraph 2.2(1)(a)(iv) to now prescribe that a provider is not obligated to collect the gap fee from families on a day if an educator for an FDC service at a particular location, or a member of that educator’s household, returns a positive COVID-19 test result in the seven day period ending on that day.

37.     For example, if an FDC educator or a member of their household returns a positive COVID-19 result on a Monday, the provider is not obligated to collect the gap fee from families until the following Monday.

38.     This measure acknowledges that FDC is a unique setting, and the location (which is often the educator’s place of residence) impacts the risk of COVID-19 transmission.

39.     Where an FDC service location is closed because a person living at the location has COVID-19, it is important for FDC services to have the option not to enforce the collection of gap fees as they are unable to provide care. As CCS will still be paid, families will not be required to pay full fees, and these measures will further protect service viability.

40.     This measure has been amended to ensure that providers will not be required to enforce collection of gap fees where the educator at the FDC location has COVID-19, rather than where the educator must isolate due to a government requirement. This measure will provide certainty to families and the sector, over the next year.

Item 12

41.     Subparagraph 2.2(1)(a)(v) currently prescribes an exemption on In Home Care (IHC) services from enforcing the payment of the gap fee in circumstances where the IHC educator is required to isolate or self-quarantine by a government agency.

42.     Item 12 amends this subparagraph to prescribe that the provider is not obligated to collect the gap fee from families on a day if the IHC educator received a positive COVID-19 test result in the seven day period ending on the day.

43.     For example, if the IHC educator returns a positive COVID-19 result on a Monday, the provider is not obligated to collect the gap fee from families until the following Monday.

44.     Where IHC educators have COVID-19, it is important for IHC providers to have the option not to enforce the collection of gap fees as they are unable to provide care. As CCS will still be paid, families will not be required to pay full fees, and these measures will further protect service viability.

45.     This measure has been amended to ensure that providers will not be required to enforce collection of gap fees where the IHC educator has COVID-19, rather than where the educator must isolate according to a government requirement. This measure will provide certainty to families and the sector, over the next year.

Item 13

46.     Item 13 repeals subparagraph 2.2(1)(a)(vi) of Schedule 3 as this provision is now redundant, as services are no longer required to close to undertake an activity required by a government agency to respond to health risks associated with COVID-19 (for example, deep cleaning of the service).

Items 14 and 16

47.     Items 14 and 16 amend paragraph 2.2(2)(a) and subparagraph 2.2(2)(b)(ii) to amend the prescribed period during which the exemption from enforcing the gap fee prescribed by clause 2.2 applies.

48.     Currently, that period:

1. begins on the day that the child care service, or part of the service, closed, and
2. ends on the last day on which one of the exemptions at paragraph 2.2(1)(a) applied to the service, or 30 June 2022, whichever is earlier.

1. Items 14 and 16 amend subclause 2.2(2) to provide that the period now begins on the day on which the positive COVID-19 test referred to at paragraph 2.2(1)(a) was returned, and ends on the last day on which one of the exemptions under paragraph 2.2(1)(a) applies to the service, or 30 June 2023, whichever is earlier.
2. For example, if an educator returns a positive COVID test result on Thursday, 14 July 2022, the exemption begins to apply from that day. The exemption ended on Wednesday, 20 July 2022, meaning that the provider needs to resume collecting the gap fee from families from Thursday, 21 July 2022.
3. This period has been extended to protect service viability and provide greater certainty to families and the sector, over the next year due to the impacts of COVID-19.

Item 15

52.     Item 15 makes a technical amendment to substitute ‘subparagraph’ with ‘paragraph’.

Item 17

53.     Item 17 amends the heading of clause 2.3 of Schedule 3 to reflect updated clause 2.3.

54.     The item amends the heading from ‘Exemption from enforcing payment of hourly session fees—services reduce care provided due to educators isolating’ to ‘Exemption from enforcing payment of hourly session fees—services required to reduce care because educators return a positive COVID-19 test result’.

Items 18 and 19

55.     Clause 2.3 of Schedule 3 prescribes conditions for when providers are exempt from enforcing payment of hourly session fees where services reduce the care they provide because there are insufficient educators to provide care due to COVID-19.

56.     Item 18 amends paragraph 2.3(1)(b) of Schedule 3 to amend the condition, from the service having insufficient educators because of government isolation or self-quarantine requirements, to educators returning a positive COVID-19 test result in the last seven days.

57.     Item 19 replaces ‘30 June 2022’ in subclause 2.3(2) with ‘30 June 2023’ to extend the measure for a further year.

58.     Where a service reduces the care provided because educators have COVID-19, it is important for providers to have the option to not enforce the collection of gap fees from families. As CCS will still be paid, families will not be required to pay full fees, and these measures will further protect service viability.

59.     This measure has been amended to ensure that providers will not be required to enforce collection of gap fees where the educator has COVID-19, rather than where the educator must isolate due to a government requirement. This measure will provide certainty to families and the sector, over the next year.

Items 20 to 22

60.     Part 3 of Schedule 3 to the Principal Rules prescribes the circumstances, for the purposes of subparagraph 10(2)(c)(ii) and subsection 10(2AA), that a session of care will be taken to be provided to a child. These are known as ‘allowable absences’.

61.     Clause 3.1A of Schedule 3 prescribes the circumstance to be the COVID-19 pandemic and the condition is that the session of care would have been provided in the 2021-2022 year.

62.     Item 20 amends paragraph 3.1A(3)(a) of Schedule 3 to make it a condition that the session of care would have been provided in the 2021-22 financial year or the 2022-2023 financial year, to ensure this measure also applies in the 2022-2023 financial year, due to the ongoing impact of the COVID-19 pandemic.

63.     Item 22 inserts new subclause 3.1A(5) to prescribe the number of allowable absences for the COVID-19 pandemic for the 2022-2023 financial year is 9 days.

64.      While the number of days prescribed under paragraph 10(2AA)(b) is 9, this in fact allows the child to access 10 days of extra allowable absences. This is because section 10(2AA)(b) allows for an extra absence if ‘no more than 9’ extra absences have been used for the financial year. This means that on the tenth such absence, exactly 9 extra absences have been used and as exactly 9 is ‘no more than 9’, the tenth extra absence is allowed.

65.     The effect of these amendments is there are 10 extra allowable absence days available to families in the 2021-2022 and 2022-2023 financial years because of the ongoing impact of the COVID-19 pandemic.

66.     These extra allowable absences mean that, during the 2022-2023 financial year, the child can have up to 10 extra absence days, in addition to the 42 days already provided under subparagraph 10(2)(c)(i) of the Family Assistance Act. If a family uses an allowable absence, this means that the service is taken to have provided a session of care to that child, and the family can still receive CCS for that session.

67.     It is anticipated that COVID-19 and influenza, and vigilance with cold and flu symptoms will continue to increase absenteeism over the next year.

68.     Extra allowable absences are being provided for the 2022-23 financial year to provide flexibility to services and families given these ongoing disruptions.

69.     Item 21 repeals the note at subclause 3.1A(4) as the note, which only refers to the 2021-2022 financial year, no longer applies, as the measure now applies to the 2022-2023 financial year as well as the 2021-2022 year.

SCHEDULE 1, PART 2 – Coronavirus response measures commencing on the day after registration

Item 23

70.     Item 23 removes three redundant definitions from section 4 of the Principal Rules: ‘in a COVID-19 hotspot,’ ‘in a restricted COVID-19 hotspot’ and ‘relevant person.’

71.     Previously, a child care service or an individual’s principal place of residence was considered to be ‘in a COVID-19 hotspot’ if the location was subject to a State or Territory public health order restricting the movement of persons, or was within a COVID-19 hotspot as determined by the Commonwealth Chief Medical Officer.

72.     Similarly, a child care service or an individual’s principal place of residence was considered to be ‘in a restricted COVID-19 hotspot’ if it was ‘in a COVID-19 hotspot’, and that children in that area were prohibited from, or advised not to attend, child care by the state or territory government.

73.     These definitions are no longer required as ‘COVID-19 hotspots’ no longer exist, since states and territories are no longer making public health orders restricting the movement of persons and the Commonwealth Chief Medical Officer is no longer determining ‘COVID-19 hotspots’.

74.     Item 23 also repeals the definition of ‘relevant person’ as the term is no longer used in the Principal Rules. The term was previously used in (former) paragraph 6(1)(f) of the Principal Rules. The provision ceased to have effect after 31 December 2020 and was subsequently repealed by Child Care Subsidy Amendment (Coronavirus Response Measures No. 6) Minister’s Rules 2021.

Item 24

75.     Item 24 is a consequential amendment that amends a note in subsection 5B(2) to remove reference to ‘COVID-19 hotspots’, which is a term no longer used in the Principal Rules.

Item 25

76.     Item 25 is a consequential amendment that removes subsection 6(2), which references ‘relevant persons’, which is a term no longer used in the Principal Rules.

Item 26

77.     Item 26 repeals subparagraphs 8(4B)(b)(iii) to (v), which are provisions that applied until 30 June 2022. These provisions related to government requirements in relation to COVID-19 that required services to close or undertake particular activities to respond to COVID-19.

Item 27

78.     Item 27 repeals Part 1 of Schedule 3 to the Principal Rules. Part 1 was introduced to support child care providers and families in New South Wales subject to ‘stay at home’ restrictions during the July 2021 COVID-19 outbreak. These measures included allowing approved providers to choose not to enforce the payment of gap fee while ‘stay at home’ restrictions were in force. As this period has passed, Part 1 is repealed.

Item 28 to 30

79.     Subsection 201B(1A) of the Family Assistance Administration Act allows the Minister’s rules to prescribe particular events or circumstances in which a provider is not required to take reasonable steps to enforce payment of gap fees.

80.     Clause 2.1 of Schedule 3 to the Principal Rules prescribe the conditions for the exemption from enforcing payment of gap fees during the COVID-19 pandemic.

81.     Item 30 repeals subclauses 2.1(5) to (12) of Schedule 3 to the Principal Rules, and item 28 removes references to those subclauses from paragraph 2.1(4)(c).

82.     Subclauses 2.1(5) to (7) are being repealed because these provisions applied when the child care service or an individual’s place of residence was located in a ‘COVID-19 hotspot’ or a ‘restricted COVID-19 hotspot’, which are terms that are now redundant and are being repealed from the Principal Rules.

83.     The exemption outlined at subclause 2.1(8) only applies where a provider and a service meet the eligibility criteria in clause 4.5, which is also being repealed from the Principal Rules, and accordingly this condition is no longer applicable.

84.     The condition outlined at subclauses 2.1(9) to (12) all expired on either 30 November 2021 or 30 June 2022, and accordingly are repealed from the Principal Rules.

85.     Item 29 repeals subsection 2.1(4A) to remove the condition that the service must be closed on the day of the session of care and the service predominantly provides care to Indigenous children. The condition is removed because the exemption from enforcing payment of gap fees under clause 2.1 of the Principal Rules no longer requires the service to be closed – clause 2.1 now only applies where an individual, child or child’s household member returns a positive COVID-19 test result within the seven day period ending on the day of the session of care (subclause 2.1(13)) or where the child has a higher risk of developing serious illness from COVID-19 or is an Indigenous child (subclause 2.1(14)).

Items 31 to 33

86.     Subsection 201B(1A) of the Family Assistance Administration Act allows the Minister’s rules to prescribe particular events or circumstances in which as provider is not required to take reasonable steps to enforce payment of gap fees.

87.     Clause 2.2 of Schedule 3 to the Principal Rules prescribes conditions for exemption from enforcing payment of gap fees during the COVID-19 pandemic.

88.     Item 31 repeals subparagraphs 2.2(1)(a)(i), (ii) and (iii), to remove conditions that no longer occur, namely:

1. Where the service is closed because a government agency has advised or required the service to close as a result of the COVID-19 pandemic;
2. Where the service is an outside school hours care service that is located on a school campus – the school campus is closed to students because a government agency has advised or required the school to close because of COVID-19;
3. Part of the service is closed because a government agency has advised or required that part of the service close as a result of the COVID-19 pandemic;
4. The service, or part of the service, is closed for a reasonable period in order for the service to undertake an activity required by a government agency to respond to health risks associated by COVID-19 (such as deep cleaning the premises).

1. Item 33 removes paragraph 2.2(1)(d) which requires services to retain a copy of the government agency advice or requirement to close as a result of the pandemic, which is referred to at subparagraph 2.2(1)(a)(i). Since this subparagraph is being removed, paragraph 2.2(1)(d) becomes redundant.
2. Item 32 is a technical amendment resulting from the repeal of paragraph 2.2(1)(d).

Item 34

91.     Item 34 repeals clause 3.1 of Schedule 3 to the Principal Rules. Clause 3.1 currently sets out the circumstances for allowable absences for services in COVID-19 hotspots and for certain periods of high COVID-19 case numbers. These measures were put in place to support families through the disruptions of health measures which are no longer in effect.

92.     Clause 3.1 is repealed as the period for which it applied has now ended.

Item 35

93.     Item 35 amends subclause 3.1A(3) of Schedule 3 to remove reference to clause 3.1 which is being repealed by item 34.

Item 36

94.     Item 36 amends the heading of clause 3.2 of Schedule 3 to refer to a child or member of the child’s household returning a positive COVID-19 test result, rather than services in COVID-19 hotspots and certain periods of high COVID-19 case numbers. This heading is amended to reflect the amended clause 3.2.

Item 37

95.     Subparagraphs 10(2)(b)(ii) and (iii) of the Family Assistance Act provides that a child care service is taken to have provided a session of care on a day on which the child did not attend the session of care if the day is not before the child’s first day of attendance and not after the child’s last day of attendance.

96.     Clause 3.2 sets out the circumstances where subparagraph 10(2)(b)(ii) or (iii) of the Family Assistance Act do not apply, for the purposes of subsection 10(2A).

97.     Item 37 repeals subclauses 3.2(2) to (5), which set out circumstances where the child care service was located in a COVID-19 hotspot for a continuous period of more than 7 days, or the individual’s place of residence was in a COVID-19 hotspot for a continuous period of more than 7 days.

98.     These provisions are repealed as these measures expired on 30 June 2022 and applied to ‘COVID-19 hotspots’, which is now a concept that does not apply and is being removed from the Principal Rules.

Item 38 to 40

99.     Item 38 amends paragraph 3.2(6)(a) of Schedule 3 to provide that families can access an allowable absence on a day before the child’s first day of attendance or after the child’s last day of attendance, if the child, or someone who lives with the child, tests positive to COVID-19 in the seven day period ending on the day. This means that, in these circumstances, the child care service is considered to have provided a session of care on that day, and the family will still receive CCS.

100. Items 39 and 40 amend subparagraph 3.2(6)(b)(i) and subparagraph 3.2(6)(c)(i) respectively, to provide this measure will be in place between 1 December 2021 and 30 June 2023. This measure had previously expired on 30 June 2022.

101. Together, these amendments ensure families can access allowable absences, and receive CCS, before the first day of attendance or after the last day of attendance at the service where a child is unable to attend care due to a member of the child’s household testing positive for COVID-19.

102. For example, if Jane is enrolled with a child care service and is due to attend her first day of child care at that service on Thursday, 14 July 2022, but tests positive to COVID-19 on Wednesday 13 July 2022 and does not attend care until Thursday 21 July 2022 (her first day of attendance), then Jane’s family will be able to access allowable absence days for sessions of care in the seven days ending on Wednesday 20 July 2022, and therefore still receive CCS.

103. Ensuring that families receive CCS for absences before the child’s first day of attendance or after their last day of attendance where a child absence is unexpected due to testing positive to COVID-19, supports families by ensuring they receive subsidised fee relief.

104. This amendment ensures that allowable absences under clause 3.2 will apply where a child or child’s household member returns a positive COVID-19 test result, rather than where the child or child’s household member is required to isolate according to a government requirement. This will provide certainty to families and the sector, over the next year.

Item 41

105. Subsection 10(3) of the Family Assistance Act provides that an additional allowable absence (an additional absence once an individual’s annual allocation of allowable absences has been exhausted) is available if, among other things, the absence is for a reason specified in subsection 10(4) of the Family Assistance Act.

106. Paragraphs 10(4)(a) and (b) of the Family Assistance Act provides reasons including that the child is ill, or the individual in whose care the child is, the individual’s partner, or the child’s household member, is ill.

107. Paragraph 10(3)(e) of the Family Assistance Act provides that for these illnesses, the service must be given a medical certificate.

108. Subsection 10(3A) of the Family Assistance Act provides the Minister’s rules may prescribe circumstances in which paragraph 10(3)(e) of the Family Assistance Act does not apply (in other words, in which a medical certificate is not required).

109. Item 41 inserts new clause 3.3, for the purposes of subsection 10(3A) of the Family Assistance Act, to provide that a service does not need to be provided with a medical certificate under section 10(3)(e) of the Family Assistance Act, in order for a family to access additional allowable absences, where the child, the individual in whose care the child is in, the partner of that individual, or an individual with whom the child lives, receives a positive COVID-19 test result, and the service has been given evidence of that positive COVID-19 result.

110. This means that if one of the above-mentioned individuals tests positive to COVID-19, and the family has exhausted their annual allocation of allowable absences, then the family is able to access additional absences and still receive CCS for these absences, as long as the service is given evidence of the positive COVID-19 test result. Acceptable evidence includes a positive test result from a pathology service or notice of the positive test result by a government agency.

111. The amendment ensures this evidence would be accepted in lieu of a medical certificate, which reduces the administrative and financial burden for families.

112. These measures maintain the integrity of evidence requirements, and concurrently reduces burden on the health care system, by reducing the number of people seeking medical certificates for duplicative administrative processes.

Item 42

113. Item 42 removes Parts 4 and 5 of Schedule 3 to the Principal Rules.

114. Part 4 was introduced to provide for the making of business continuity payments, called COVID‑19 viability support payments, to approved child care providers affected by the COVID‑19 pandemic. Providers who met the eligibility criteria could receive COVID‑19 viability support payments at certain times. Because the eligibility criteria included being located in a ‘COVID-19 hotspot,’ a concept which is now redundant as it is being repealed from the Principal Rules, and the eligibility period for these payments ended on 30 November 2021, these measures are now being removed from the Principal Rules.

115. Part 5 was introduced so that where a service or an individual’s place of residence has been in a COVID-19 hotspot for at least 10 continuous weeks, then all of the full weeks in which the service or place of residence has been in the COVID-19 hotspot are to be disregarded for the purposes of counting whether 14 weeks have passed since the child last attended care. This was designed to ensure that the enrolments of children are not automatically cancelled under paragraph 200B(1)(b) of the Family Assistance Administration Act due to non-attendance at child care services during extended lockdowns. If enrolments were cancelled under subparagraph 200B(1)(b)(iii), individuals would not be eligible for sessions of care at that service until they were re-enrolled. This amendment prevented enrolments ceasing where the child has been unable to attend due to a local COVID-19 hotspot, ensured children stay enrolled in care and that CCS would still be paid.

116. Because the eligibility criteria in Part 5 include being located in a ‘COVID-19 hotspot,’ a concept which is now redundant as is being repealed from the Principal Rules, and these measures expired on 30 June 2022, these measures are now being removed from the Principal Rules.

SCHEDULE 2, PART 1 – Emergency support measures commencing on 1 July 2022

Item 1

117. Item 1 repeals section 5C of the Principal Rules to make ongoing a measure that allows families to continue to receive extra allowable absences during periods of emergency where the emergency results in the service closing or prevents the child from attending care. This measure was previously temporary and applied from 23 February 2022 to 30 June 2022.

118. Under the amended section 5C, from 23 February 2022 onwards, if a service is closed during a period of emergency, or the child cannot attend the session of care during a period of emergency or as a direct result of the emergency, then the child care service is still taken to have provided a session of care on that day, so the family can still access CCS.

119. This measure ensures that families have allowable absence days available for use during an emergency that do not count towards a child’s ordinary annual allocation of absence days (note item 22 of Schedule 1 amends the Principal Rules to add 10 more allowable absence days to the usual 42 allowable absence days for the 2022/23 year, due to the COVID-19 pandemic) and so ensuring that allocation remains available for routine use following an emergency. The measure provides fee relief for families and supports services’ viability, along with the amendments made by item 2 that allow providers to choose not to enforce the payment of gap fees during periods of emergency.

120. The measure also removes a disincentive that might otherwise discourage services and families from following health and safety advice in an emergency.

121. The item also provides an example of where the service is flooded and is not able to open, or if staff members are not able to travel to the service because the roads are flooded, to illustrate when a service would be considered closed as a direct result of a period of emergency.

Item 2

122. Item 2 inserts a new heading ‘54AA  Purpose of Division’ after the heading to Division 1A of Part 5 of the Principal Rules to make the text below the Division heading a substantive section. This amendment is consistent with drafting practice and ensures that this provision can be more easily referred to and amended in future if needed.

Item 3

123. Item 3 repeals section 54B of the Principal Rules and replaces it with a new section 54B to provide that from 23 February 2022 onwards, providers are not obligated to enforce payment of gap fees when a child did not attend any part of a session of care because the service, or part of the service, is closed during periods of emergency, or the child did not attend any part of a session of care as a direct result of a period of emergency.

124. This measure was first introduced during the New South Wales and Queensland flood emergency in early 2022, and expired on 30 June 2022. However, in order to continue to provide this additional support to families during future emergencies, this measure has been extended.

125. This means that child care services may choose not to enforce payment of gap fees during periods of emergency to alleviate the financial pressure on families during periods of emergency.

126. The circumstances under which this measure may apply include where:

1. A child is not able to attend child care due to any impact of the emergency;
2. A child is not able to attend because the service had to temporarily reduce the number of children it provides cares to as a result of the period of emergency. (Note: Under section 175 of the Education and Care Services National Law, a provider must notify the Regulatory Authority of the State or Territory of any incident that requires the provider to close, or reduce the number of children attending, the service for a period).

1. The amendment makes this measure ongoing as the frequency and intensity of natural disasters is increasing. Families and the child care sector require certainty about the support that will be available in the event of an emergency.
2. Providing fee relief where a child is unable to attend care during an emergency will support families, maintain enrolments and maintain stability for children.

SCHEDULE 2, PART 2 – Emergency support measures commencing on the day after registration

Item 4

129. Item 4 inserts a new definition of ‘emergency’ into section 4 of the Principal Rules. ‘Emergency’ is used in the definition of ‘period of emergency’, which is a new definition inserted by item 5.

Item 5

130. Item 5 replaces the definition of ‘period of local emergency’ in section 4 of the Principal Rules with a new definition of ‘period of emergency’.

131. Currently, there are two situations in which a period is considered a ‘period of local emergency’.

132. The first is a period in respect of which an event occurred which affected a widespread area, had a severe impact on the lives of a significant number of the inhabitants of the area, and prevents, or may prevent, children from attending the child care service, or may make such attendance hazardous.

133. The second is a period in respect of which a disaster declaration is made by a state emergency service, the police, or another Commonwealth, State, or Territory agency and the disaster prevents, or may prevent, children from attending the child care service, or would make such attendance hazardous.

134. The new definition of ‘period of emergency’ removes the reference to disaster declarations made by state emergency services, the police, or Commonwealth, State or Territory agencies as there are many disaster declarations are made by these bodies where the support for the sector during a period to which the disaster declaration relates is not appropriate. This is because these declarations are made for many different reasons that are not appropriate as a trigger for a period of emergency (and therefore financial support), particularly in cases where the geographical location or timeframe may be too broad.

135. Any disaster declaration, which would require policy supports triggered under a period of emergency, would be captured by the criteria set out in the new definition, which retains paragraph (a) of the definition of ‘period of local emergency’.

136. The item also includes a note that clarifies that the department may list the period of emergency on its website. This is to provide certainty to the sector about when rules relating to periods of emergency apply.

137. These changes will provide increased certainty and consistency to the sector, which will assist in emergency preparedness and emergency management responses.

Item 6

138. Item 6 amends paragraph 5B(2)(c) of the Principal Rules to ensure section 5B (which sets out the circumstances for allowable absences before a child’s first attendance or after a child’s last attendance) applies to circumstances where a child attending an Family Day Care (‘FDC’) service or In-Home Care (‘IHC’) service attends a session of care provided by another location of the FDC service or IHC service.

Item 7

139. Item 7 inserts new section 5BA into the Principal Rules to provide clarity in relation to when a FDC service or an IHC service is considered ‘closed’ for the purposes of the Principal Rules.

140. An FDC or IHC service is considered ‘closed’ in relation to a particular session of care that was to be delivered at a particular location, if the whole service is closed; or in relation to a session of care that the service provides or is taken to provide at a particular location, there is no educator at the service who is willing and able to provide the session at that location.

141. An educator is ‘willing and able’ to provide care if the educator is both prepared and genuinely disposed to provide care to children who are booked for in sessions of care.

142. A child may be booked in to attend a session of care at a particular location (Location A) of the service, but if there are no educators at that location who are ‘willing and able’ to provide care (for example, because of scheduled leave), the family may agree that the child attends another location of the service (Location B) so that another educator (‘back-up’ educator) can provide the session of care. As there are no educators willing and able to provide session of care at Location A, the service (in relation to a session of care provided at Location A) would be taken to be closed. As the ‘back-up’ educator is willing and able to provide the session of care at Location B, the service (in relation to the session of care provided at Location B) would not be closed.  

143. Certain rules apply to 'closed’ services.  For example, section 8 of the Principal Rules provides that there is no eligibility for a session of care if on the day, a session of care is not provided because the child care service that would otherwise provide that session is ‘closed’, subject to certain exceptions. Section 54B provides an exemption to the provider’s obligation to enforce payment of gap fees, one condition of which is the service is ‘not closed’.

144. It was previously unclear from the Principal Rules how these rules apply to services that operate out of multiple premises, in particular FDC and IHC services, where only some of the premises are closed. Under the FDC model, the provider of a service has a principal office and engages one or more educators to care for children in the educator’s own home (family day care residence).  Under the IHC model, the provider of service has a principal office and engages one or more educators to care for children in the child’s own home.

145. This amendment provides clarity by providing that a service is taken to be closed in relation to a particular location, where there is no educator at the service who is willing and able to provide the session at the location where the session of care has been agreed to be provided, notwithstanding that the provider’s principal office is open, or that care continues to occur at the service’s other locations. 

146. An FDC service or IHC service that is closed at one location has no bearing on whether the service is open or closed at other locations.  The ‘willing and able’ test must be applied for each location.

Item 8

147. Item 8 amends paragraphs 6(1)(c), (d) and (e) of the Principal Rules by substituting all references to ‘period of local emergency,’ which is being removed, with ‘period of emergency.’

Item 9

148. Paragraph 8(1)(g) and subsection 8(4B) of the Principal Rules provide that CCS is not payable for a session of care that was not provided because a service is closed, unless an exception applies.

149. Item 9 repeals subparagraph 8(4B)(b)(ii) and replaces with a new subparagraph to clarify the exception applies when a service is closed ‘during a period of emergency, as a direct result of that emergency’.

150. This means that if a child did not attend child care because the service was closed during a period of emergency, as a direct result of that emergency, then the family will be eligible for CCS for that session of care under section 85BA of the Family Assistance Act.

151. Child care is an essential service that many families rely on, including emergency services workers. During periods of emergency, it is important that services that can safely open, do so. This measure is an integrity mechanism that ensures services do not close, and receive CCS, unless they are unable to open for reasons directly relating to the period of emergency.

Item 10

152. Item 10 repeals Division 2 of Part 6 from the Principal Rules. This division provided for a one off, business continuity payment of $10,000 (called the South East Queensland and NSW Flood Support payment) to providers of child care services that closed for eight or more consecutive days commencing on a day the service would normally open, or any eight or more total days (whether consecutive or not) on which they would ordinarily provide care, during the Local Area Emergency, as a consequence of the impacts of the flood events in New South Wales and South East Queensland in February and March 2022.

153. Division 2 of Part 6 is repealed as the eligibility period for this payment ended on 30 April 2022.

SCHEDULE 3 – Condition of continued approval to not offer certain inducements

Item 1

154. Item 1 inserts new section 48B into the Principal Rules.

155. New subsection 48B(1) imposes a condition on the providers’ approval that providers not offer inducements or cause inducements to be offered to secure enrolments. For example, offering cash incentives or shopping vouchers in exchange for enrolment, or offering inducements such as free tablet devices, would be within the ambit of the new prohibition. Contravention of this provision could result in compliance action being taken against a provider, which may include suspension or cancellation of the provider’s approval.

156. New subsection 48B(2) provides that the prohibition on inducements contained in subsection 48B(1) does not apply in relation to the following benefits, for example:

1. Amount charged for care (noting that CCS is paid as a percentage of hourly fee the parents are charged by the child care service (up to a cap), so a reduction in fees will also reduce subsidy);
2. Quality of care, which may include educator-to-child ratios, qualifications and experience of educators; specialist education programs or inclusion support; cultural or religious accommodations such as languages spoken or food that meets religious dietary restrictions;
3. Location of the service, quality of facilities, including play areas and drop off areas, accessibility and equipment for disabled students;
4. Availability of places (without wait times), availability of preferred days and times, operating hours of the service;
5. Inclusions relating to the basic needs of the child while in care, such as meals or nappies. This exclusion is intended to apply to benefits that it would be standard industry practice for a child care service to provide to a child for an additional fee. A smart watch, for example, does not serve the basic needs of the child and it would not be standard industry practice to provide smart watches to children.

1. New subsection 48B(2) also does not prevent existing benefits that are provided for under the Family Assistance Law to help parents with the cost of child care, such as CCS or ACCS, not collecting the gap fee (where permitted under the legislation), and certain third party payments that are permitted under the legislation without reducing the parents entitlements to subsidy, such as State and Territory payments for pre-school programs (see section 16A of the Principal Rules).
2. Payments that are made to the provider, such as business continuity payments and grants under the Community Child Care Fund, are not within the ambit of the new provision as the payments are to the provider, not the individual.
3. The intent of new section 48B is to ensure that parents are not induced to enrol their children for inappropriate benefits or inducements, while ensuring providers can continue to engage in legitimate price and quality competition.