By CELA on 5 Aug, 2019

Recently Community Early Learning Australia enlisted your help to respond to the next stage of research in the evaluation of the Australian Government’s ‘Jobs for Families’ package, more simply described as the rollout of the Child Care Subsidy, or CCS.

While the Australian Institute for Family Studies (AIFS) evaluation of the CCS continues through until 2021, it has now released a new Early Monitoring Report on the CCS impact so far for Australian families.  The results? It depends on who you are.

Broadside analysis underway

CELA CEO Michele Carnegie says this week’s Broadside (sent out to members first) will put a spotlight on the CCS and the growing evidence that the system is failing our most vulnerable children.

“As more data becomes available, it’s increasingly clear that the new package simply doesn’t deliver quality education and care for the children who are most in need and would most benefit,” Michele says.

“And services are again carrying the load associated with implementing reforms with no administrative compensation. This takes them away from their core role of providing quality early education.

“The safety net provisions aren’t working and the terrible truth is that more and more educators report families are simply walking away from ECE altogether rather than get lost in the administrative nightmare.

“There is a generation at risk here, and they need our attention.”

Early results

The AIFS report shows that nearly half of all families find the new Child Care system difficult to understand. This is strongly reflected in the feedback we hear from CELA members.

Megan O’Connell, CELA’s Policy and Research Consultant, says that while some families find the costs of child care have reduced or stayed the same, unfortunately one in three parents report an increase in costs. This includes one in four low income parents.

Megan is preparing the Broadside report with a full analysis of the CELA survey and breakdown of the AIFS Early Monitoring Report in more detail. She says the responses in the AIFS early report were also reflected in the CELA survey.

“The CELA survey feedback reflects an increased burden on many service providers, who are supporting vulnerable families to access benefits,” Megan says.

“Service providers have raised concerns regarding viability as they support families for a long period of time to access payment.

“Several administrative issues were also raised, such as the eight-week rule which creates difficulty for occasional care providers, and the issue of backdating payments going to parents.

“This feedback has been provided as part of the AIFS feedback survey, and will be used in our ongoing liaison with Government.”

Sign up here to make sure you are getting Broadside and other CELA Member benefits.

Achieving aims?

The new CCS package has many policy aims.  One was to reduce out-of-pocket fees for employed or student parents who need care for their children. Another was to encourage more parents – women in particular – to add to the nation’s productivity by engaging in paid work, more often. A third was to simplify the payment structure and attempt to remove ‘gouging’ opportunities for providers to raise fees over and above the subsidy increases from government.

In a protracted – even tortuous – political process that outlasted several parliaments, the CCS package began national implementation in 2018.

The ECE sector on the whole supported many aspects of the legislation but one area remained almost universally condemned: the mechanism behind the new CCS Activity Test was believed to be particularly disadvantageous to children already affected by social and economic disadvantage.

Evidence base

There was, after all, an impressive evidence base even then to show that vulnerable children have the most to gain from access to quality early childhood education – yet the new Activity Test would reduce the subsidised hours available to parents and guardians experiencing disadvantages such as unemployment, under-employment, chronic illness, or other social and economic disadvantages.

The federal government countered this criticism with the inclusion of volunteering as a formal measure of productivity in the new Activity Test, and offering a series of safety net provisions to boost the available subsidised hours for disadvantaged families.

Philosophical position

Philosophically, this sits well with the current Australian Government’s position on overcoming disadvantage: once people are given an incentive to start volunteering, studying, or working, they are on a safe path to a more positive future, and they may then meet the Activity Test requirements on their own terms.

A respondent to CELA’s recent survey provided such an example:

… for some it has made our service less affordable but for another single parent family who is studying it has meant that she can [now] send both her children for five days.

Anecdotally, many ECE service directors and others have observed a reverse effect. The Activity Test is too complicated, they say, and the safety net provisions are beyond the administrative navigation skills of many of the families who need them.

This comment on the CELA survey supports the perception of an administrative barrier:

As much as I appreciate that families need to apply themselves for the special child care benefit … I think it is a disadvantage to them. When I (provider) had to complete the form with the parent (paper copy), it was done each time, but since the families [now] need to apply themselves, our families have not used it (even after guiding them as to how to do it).

The system’s ability to cater for casual employment hours or seasonal work has also been questioned in the past and appears to be a real problem in implementation in some families.

For example, a comment on CELA’s survey reads:

Families who are disadvantaged through lack of employment are not eligible for enough care to seek work. Students lose their entitlements during the December to March period, which means they cannot access casual work as they cannot retain their care placements.

Parents’ perceptions

In the latest AIFS report, parental understanding of their eligibility for the CCS is one of the lowest reported outcomes.

Parent understanding CCS

Graphic source: AIFS

ECE respondents to CELA’s recent survey also reported this lack of parent and guardian understanding of entitlements in the new CCS.

Comments recorded in the CELA survey included:

  • There are now more steps in order to complete the enrolment process requiring greater coordination between the families and the service. Many families do not seem well informed about their myGov page requirements.
  • I have spent HUNDREDS of UNPAID hours setting up and trying to ensure all families receive eligible Subsidy. The eight week rule does not suit OSHC in regards to the many casual bookings during term time and Vacation Care. Families need a great deal of ‘scaffolding’ to complete the enrolment process.
  • Constant chasing up for families who cannot (or are unable to) access or receive the CCS they are entitled to.

Measuring consequences

Recently CELA’s CEO Michele Carnegie shared an about the CCS evaluation and this one about the Front Project’s report into ECE’s economic value. She reminded readers that the Child Care Package is one of the biggest reforms to funding the sector has seen.

“Many families are financially better off as a result, and many are not,” Michele wrote.

In fact, more than a quarter of a million families around Australia are worse off according to the Department of Education’s own calculation (see the table below). That number includes 88,000 families with children deemed to be disadvantaged (see top line of table below).

CCS Table

Source: ABC News and Department of Education

Fear for children

An ABC News report covering the AIFS early evaluation release shared an example from a southern Brisbane service which reported 20% of all families had ‘dropped out when the CCS came into effect last year’. This was, they said, a direct result of many low-income families losing subsidised hours if one or both parents were unemployed.

The effect on children who lose access to quality early childhood education is becoming better understood every year.  One standout report is Australia’s Lifting Our Game.

Just recently, a new and fully Australian research report demonstrated that children who do access quality ECE are building a foundation for more productive participation in school and work that lasts well into adulthood.  The report, from The Front Project, found that in Australia every one dollar invested in quality ECE (with the emphasis on quality) delivers $2 in benefits to the government, business and the wider community.

Driven forward

Looking at the impact of the CCS so far in the latest AIFS report we can see around 66% of families are either paying less or the same amount for fees after CCS as they did before. And, as of November 2018, 70% of families say they use about the same amount of formal childcare as they did before the CCS was implemented.

ABC News reports that data released by the Government shows average hourly fees for long day care increased by 4.8% between December 2017 and December 2018.

Federal Education Minister Dan Tehan told the ABC that some childcare operators had increased fees above the hourly rate funded by the Government, eating into the increased subsidies.

“Providers in some capital cities and mining regions are charging above the subsidy cap,” Mr Tehan said.

“But across the nation, 89% of providers are charging under the subsidy cap [and] that’s why we’ve seen a 7.9% reduction in out of pocket expenses.”

Why is it so?

But can we tell, yet, if those paying less are in some cases doing so because they now have fewer hours?

Yes, and no.

While the AIFS Early Monitoring Report’s authors are careful to point out the ‘limited data’ currently available, their current feedback from ECE services shows 58% of respondents either agree or strongly agree that families are ‘withdrawing children or reducing hours’ as a result of the new CCS (below).

Parent hours CCS

Graphic source: AIFS

CELA’s recent survey showed a similar perceived outcome by directors, providers and others who responded.

Here’s a selection.

  • For families at risk the reduction in hours and the delay and complexities in approval for CCS has seen those families either leave the centre or not enrol their child. Working disadvantaged families have seen a minimal impact. The children in at risk families are however a real concern.
  • We are located in [an] area with high unemployment and under-employment. 24 hours does not cater for these families. Our centre only charges $80 per day and families still struggle with accounts at this rate.
  • In our service, great stress has been placed on a particular disadvantaged family using our service – extended wait times to have eligibility assessed, despite the family and child being known to Child Protection, back payment of fee reduction amounts made to the family, creating great financial stress with the obligation to repay the Centre – setting the family up to fail, and to create conflict in an otherwise supportive relationship with the service. This has also meant that the child’s access to the program has been reduced due to the parent’s response to the debt. This is is direct opposition to the experience of state funding received to support an indigenous family to access the service.

Sign up here to make sure you are getting the full report in Broadside, and other CELA Member benefits.

Meet the author


Bec Lloyd is the founder and managing director of Bec & Call Communication, providing professional writing, editing and strategy services to the school and early childhood education sector since 2014. In 2018 she launched UnYucky mindset and menus for happier family mealtimes. Formerly the communications lead at ACECQA and BOS (now NESA), Bec is a journo and mother of three who produces Amplify for us at Community Early Learning Australia.

About CELA

Community Early Learning Australia is a not for profit organisation with a focus on amplifying the value of early learning for every child across Australia - representing our members and uniting our sector as a force for quality education and care.

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