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JobKeeper to end in childcare sector in July

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
09 June 2020 1 minute readShare
childcare sector

The government will start scaling back JobKeeper in July, beginning with childcare workers, following a decision to end the free childcare system next month.

The government has announced JobKeeper payments for employees of a Child Care Subsidy-approved service and for sole traders operating a childcare service will end on 20 July to ensure government support is “appropriately” targeted.

In a statement issued on Monday, Minister for Education Dan Tehan said the temporary Early Childhood Education and Care Relief Package, introduced on 6 April, had done its job and would be turned off on 12 July, to increase childcare places as Australians return to work.

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As a result, from 13 July, CCS will return, along with new transition measures, arguably ending the need for JobKeeper.

According to the government, besides paying some $2 billion in CCS this quarter to eligible families, it will pay childcare services a transition payment of 25 per cent of their fee revenue from 12 July until 27 September.  

 

But the transitional package, worth an approximate $708 million, will impose some conditions on childcare providers, ensuring they keep their staff on post-JobKeeper and obliging them to cap childcare fees at the level of the reference period (17 February to 1 March).

“Our government will support families and services as we transition to the original CCS system,” Mr Tehan said.

“Stopping fee increases during the transition and relaxing the activity test will relieve financial pressure on families that may be doing it tough.”

The government also announced it will ease the activity test until 4 October to support eligible families whose employment has been impacted as a result of COVID-19.

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These families will receive up to 100 hours per fortnight of subsidised care during this period.

“The federal government supports families by providing more than $8.3 billion a year through the CCS to help them with the cost of childcare,” Mr Tehan said.

“Under the CCS, out-of-pocket costs were less than $5 per hour per child for the parents of 72.4 per cent of children in centre-based day care in the September quarter last year.”

He also noted that the new transitional package will “support” childcare businesses to remain viable.

Speaking about the results of the Early Childhood Education and Care Relief Package, Mr Tehan noted that it kept 99 per cent of around 13,400 services operational as of 27 May 2020.

“Because of our success at flattening the curve, Australia is reopening for business, and that means an increase in demand for childcare places, with attendance currently at 74 per cent of pre-COVID levels,” he said.

“I would like to thank everyone who works in our childcare sector for their hard work and commitment as we acted to contain the coronavirus. Ninety-nine per cent of services remained open and continued providing high-quality care to children while on our temporary relief package.”

JobKeeper to end in childcare sector in July
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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