ACA has received numerous questions from our members about how the new ECEC Relief Package applies to a multitude of difference circumstances across our sector.
The following Q&A's have been developed in response to these specific questions, to assist service providers in navigating their way through the new financial measures over the coming weeks and months.
Quick overview of ECEC Relief Package for service providers
- The ECEC Relief Package was not designed to generate 100% of the revenue generated prior to COVID-19.
- It will impact each service differently.
- Those who may be more negatively impacted include:
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- Those with payroll expenses in excess of 75% of revenue;
- Those with lease costs that exceed 15% of revenue;
- Those who are considerably higher than the hourly rate cap
- The ECEC Relief Package will only work for services if combined with the JobKeeper Payment package, along with the other Federal Government support for businesses in the context of COVID-19.
- It is important to take into account State and Territory support including payroll tax deferrals, rebates & waivers. Get in touch with the relevant departments of your State/Territory Government to find out what is available. Additionally some local councils are providing business assistance.
- Additionally please be aware that the Australian banking sector has introduced a range of support measures to help business affected by COVID-19. The type of assistance will depend on individual circumstances. In particular, Australian banks will defer loan repayments for 98% of all businesses affected by COVID-19 for six months. We encourage you to speak directly to your bank as soon as possible to allow you to access this support.
Finer Detail
- Begins from Monday April 6, 2020.
- Each service will receive a lump sum payment from the Australian Government.
- The payments will be made weekly in advance.
- The first payment is due Thursday April 9.
- The payment will replace existing CCS and ACCS payments.
- No CCS will be recovered for any child who was absent from March 23 and does not return.
- Absence days are not counted throughout the term of the relief package..
- CCS enrolments that were active as of April 6 will be still be active as the package concludes.
- No parent fee contributions are allowed (ie. gap payment).
- An application process will be available for services who are not adequately funded across both ECEC Relief Package and JobKeeper Payment.
An application form will be available on Thursday 8th April on the DESE website.
Questions and Answers (Q&As)
What is the duration of the ECEC Relief Package?
The ECEC Relief Package is for an initial term of 3 months, with a likely extension for another 3 months, depending on a range of factors determined by Government. Payments will commence from the week beginning 6 April 2020 until the week ending 28 June 2020.
How much will you receive?
- The payment will be calculated on your revenue between 17 February and 28 February 2020.
- If your hourly rate is under the $11.98 rate cap and your total revenue was $50,000 for that fortnight, the Government will pay you $25,000 per fortnight, or $12,500 per week.
- If your hourly rate is above $11.98 then the payment amount will be proportionately less than 50% depending on how far above the rate cap your fees are.
- This calculation is based on the number of booked sessions between 17 February and 28 February 2020.
- Your payment will be capped at $11.98 per hour based on the number of sessions you have for the same reference period.
- Services with a high proportion of ACCS families will receive a top up payment.
- ACA has emailed members a Calculator of Business Continuity Payment, which we encourage you use as a starting point in determining what sort of amounts you can expect to receive under the new ECEC Relief Package and other financial measures.
What if it’s not enough?
- Services may determine that the combination of ECEC Relief Package, JobKeeper Payment and other Business Stimulus package items is still not enough to break even.
- Services have the opportunity for review whether the new measures provide adequate assistance on a case by case basis.
An application form will be available on Thursday 8th April on the DESE website. - Meanwhile the ECEC Relief Package is to be reviewed in four weeks from the commencement date, to ensure that it is supporting services adequately.
So hang on… the Government will pay 50% of all fees based on attendance at services in fortnight ending 1 March 2020.
Does that mean the other 50% will not be paid?
Yes - only 50% of your revenue up to the CCS rate cap is covered. However the ECEC Relief Package has been designed to work hand in hand with the JobKeeper Payment package, along with the other Federal Government support for businesses in the context of COVID-19. It is important to take into account State and Territory support including payroll tax deferrals, rebates & waivers. Get in touch with the relevant departments of your State/Territory Government to find out what is available. Additionally some local councils are providing business assistance.
Banking sector support measures
Australian banks have hardship teams ready to help business affected by COVID-19. The type of assistance will depend on individual circumstances. In particular, Australian banks will defer loan repayments for 98% of all businesses affected by COVID-19 for six months. ACA encourages you to speak directly to your bank as soon as possible to allow you to access this support. You can read more about how the Australian banking sector is offering assistance in this context here.
Leases
We encourage all providers who may be experiencing financial hardship or to proactively engage with their landlords to request some rental relief.
What is the next operational step for service providers after calculating the estimated business continuity payments?
ACA encourages all service providers to undertake a COVID-19 Risk Assessment in the context of ensuring you offer the best and safest care possible, to inform future practices and decision making. You can access ACA's
document
template document for this purpose here
.
This assessment should take into account the latest guidance from the Australian Health Protection Principal Committee (AHPPC) about the management of early learning services in relation to the community transmission of COVID‑19, available here.
Please note that is now only a recommendation (ie. not mandatory) that educators be vaccinated against influenza (after 1 May 2020).
This risk assessment may determine that your service can only provide access to a limited number of children as opposed to your approved licenced places number.
What if my attendance figures are or become higher than the reference period?
DESE will acknowledge that some services may have a greater number of enrolments that the reference period and are likely to support increased payment figures based on new information, which is up to service providers to provide.
Can services waive the gap fee for sessions before Friday 3 April?
Services can waive gap fees between 23 March and 3 April – this is an individual decision for each service.
Cessation of Care - what happens with that?
Cessation of care does not apply for children absent in that period.
Will Centrelink be recovering CCS from centres if they choose to refund the gap fee for families for last week?
No – CCS will not be recovered for absent children for services from March 23, regardless of whether the service chooses to waive the gap fees or not.
Do we still manually bill non-residents?
No, under the ECEC Relief Package access to early learning is free for all families.
How do I determine which parents are essential workers and therefore require priority care?
Under the direction of the Australian Government, if there are more applications for places than our service can accommodate, service providers are required to prioritise care to essential workers, vulnerable and disadvantaged children and previously enrolled children.
There are no specific guidelines on this, so it is up to the discretion of each service provider to use common sense and their understanding of which vocations would be most important in the context of the current health crisis. There is no requirement for written evidence regarding your families’ career type.
When a service is considering which enrolments to accept, it is important for that service to consider whether accepting any new enrolment allows for adequate social distancing measures where possible as well as supporting the increased hygiene measures advised by the Australian Health Protection Principal Committee (AHPPC) about the management of early learning services in relation to the community transmission of COVID‑19, available here.
Please note that is now only a recommendation for educators to be vaccinated against influenza (after 1 May 2020).
As previously stated, ACA encourages service providers to undertake a COVID-19 risk assessment to inform its practices and decision making. This risk assessment may determine that your service can only provide access to a limited number of children as opposed to your approved licenced places number.
Am I obliged to take on new enrolments under the ECEC Relief Package? And what if existing working parents are trying to book extra days to take advantage of free childcare?
There is no obligation for providers to accept additional bookings. Furthermore services have the discretion of deciding the number of children they can accommodate, based on their COVID-19 Risk Assessment, which we highly recommend. This risk assessment may determine that your service can only provide access to a limited number of children as opposed to your approved licenced places number.
How do we maintain ratios with 'free childcare' now being offered to previously enrolled children?
This risk assessment should determine the number of children and therefore educators that you require at this time. Please ensure that the services if complying with the prescribed ratios as as set out under the National Quality Framework (NQF). If you can’t meet these ratios you will need to apply to apply a waiver via your State Regulatory Body.
What if a parent has lost their job and has unenrolled their child, can they re-enrol even if they don’t have employment?
Yes – as the Activity Test is not applicable during the term of the ECEC Relief Package, any family can enrol to your service. This is a decision for the centre in the context of the service’s COVID-19 Risk Assessment.
How do we get paid for new enrolments or increased days of care? If we allow new children enrol, we will have higher costs and no mechanism to recover them.
If your enrolment exceeds the number within the reference period, you will be able to apply for additional funding.
Do the CCS hours that families had prior to this still apply with the new rules?
No – as the Activity Test does not apply under the ECEC Relief Package, CCS hours do not apply and families can have access to as many days or hours as your service determines.
Can the Centre alter their trading hours if families are not using the hours we open, or would this affect the amount of CCS we could claim?
Yes - the centre can alter their hours. The service provider would need to notify the relevant State Regulatory Body of this change.
If families remain enrolled but are choosing not to attend, can I offer these days to other families on a casual basis?
Yes - you can offer these days to other families on a casual basis. However we recommend these decisions are made in line with your COVID-19 Risk Assessment.
If a family has reached their cap of CCS does the free care apply and would we get the CCS for those families?
The CCS cap does not apply under the ECEC Relief Package and all families are eligible for no cost access.
Do we have to manually adjust the individual accounts to waive the gap fee?
You should seek guidance from your third party software provider as this will differ among software packages.
Our service commenced operations on 2 March 2020. Will the first week of operations be used as the baseline for the CCS + gap fee replacement amount? If not, what does this mean for us?
For providers which were not operational during the reference period, we would encourage you to contact DESE via the CCS Helpdesk to assist you in determining how much you will receive due to these individual circumstances.
How are absences handled?
This is a new system which temporarily replaces existing CCS and ACCS payments:
- Absence days are not counted throughout the term of the relief package.
- No CCS will be recovered for any child who was absent from March 23 and does not return.
- CCS enrolments that were active as of April 6 will be still be active as the package concludes.
Do we need to continue keeping attendance records?
Yes. Under the NQF services are obliged to maintain accurate attendance records.
What if families have a debt relating to periods prior to 6 April?
Services can continue to collect any monies owing prior to this period.
What happens if a service accepts new families, becomes full and then old families want to return and there is no availability?
Services can offer places to new families on a temporary basis if they intend to guarantee availability to existing or previously enrolled families not currently attending. If your service has capacity to offer permanent positions to new families we suggest you consider this in the context of your centre’s COVID-19 Risk Assessment.
What about new centres just opened or about to open?
DESE is in the process of determining how new services will be funded if they are opening during the period of the ECEC Relief Package. We will provide further updates when known.
What is the calculation method for vacation care & OSCH care payments under the ECEC Relief Package?
The payment will be based a reference fortnight, and calculated as 50 per cent of the lesser of:
- the hourly fee for the session of care, or
- the relevant CCS hourly rate cap.
The reference fortnight is as follows:
- For an Outside School Hours Care Service that provides only vacation care – the fortnight starting on the first Monday of the school holidays between school Term 3 and Term 4 in 2019 in the state or territory in which the service is located.
- For all other services, it is¬ the fortnight starting 17 February 2020.
- Where a service charged fees for only one week of care during the fortnight starting 17 February 2020, or in the school holidays between Terms 3 and 4 in 2019, the amount will be calculated on the week in which care occurred and the amount doubled.
Do we need to return the fees to the parents that we collected from 23rd March to 3rd April?
This is a business decision for the service as to whether they hold fees in credit or refund families.
Does the ECEC Relief Package apply to services that have voluntarily temporarily closed?
A service that voluntarily closes is not eligible for funding under the ECEC Relief Package but will need to determine eligibility for the range of other financial measures in place including JobKeeper Payment.
Do you have a choice to opt out of the ECEC Relief Package?
It is our understanding that providers can choose to opt out of this package, albeit the previous CCS will not be available whilst this package is in place, meaning that service providers will need to charge full fees to families.
Does this new system effect a service from receiving Inclusion Support Funding for children who are currently attending?
No – Inclusion Support Funding will still apply. DESE is still working on a mechanism for payment with no interruptions in funding expected.
Do the state/territory No Jab No Play immunisation requirements for children still apply in each state?
Yes - these laws still apply in each state.
Will all childcare services now be automatically entitled to the JobKeeper payments?
A significant majority of service providers will automatically be eligible by virtue of the government capping the revenue as a result of the ECEC Relief Package.
If the early learning service is part of a larger org such as a council, school or church, where early learning revenue only makes up a small percentage of the whole orgs revenue, they may not qualify for JobKeeper Payments. Those organisations should apply for an Exceptional Circumstances consideration through DESE.
It’s unclear as which category of visa holders if any, are eligible for JobKeeper Payments. ACA will provide more advice once legislation has passed.
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