The government introduced the current child care system in July 2018. Over the past 12 months a number of systemic design flaws and administrative burdens on families and providers have become apparent.
Families and providers have experienced significant delays, confusion and additional paperwork to register for the Child Care Subsidy (CCS). This has often resulted in families CCS entitlements being over or underestimated, resulting in overpayments and debts for affected families. Providers have been forced by the government to act as debt collectors, and with the government commencing data matching with the Australian Tax Office families are being issued with unexpected debt notices.
The introduction of the new system has left a large number of families worse off. The government’s own figures estimated one in four families would be worse off under the new system.
The new system has also had a negative impact on families and children trying to access the Additional Child Care Subsidy – Child Wellbeing payment. The number of children, almost all of whom are vulnerable and at-risk, accessing the Child Wellbeing payment fell by over 20 per cent in the first months of the new system, and the latest data for March 2019 shows there are still 6 per cent less children approved for this payment compared to March 2018.
The government also claimed the new child care system would put downward pressure on fees. However, fees have actually increased 4.9 per cent in the 12 month period prior to March 2019 and have increased 30 per cent since the government was first elected.
After months of denying any problems, the government has tabled this Bill without warning or consultation. Nevertheless, the Bill improves some of the technical design flaws and problems in the childcare system, and has broad (in some cases qualified) stakeholder support.
Labor Senators note that a number of submitters who expressed qualified support for the amendments have requested that the Minister's Rules be clarified or expanded to include third party payments from non-government organisations and philanthropic funds to reduce out-of-pocket costs for vulnerable children and families. Labor Senators hope that these issues can continue to be worked through by the government.
Access to care and the increased administrative burden for Child Care Subsidy Claims
However, there is one amendment in the Bill that raises serious concerns.
The government argues items 35 to 38, 41, 42, 50 and 51 will simplify the system for families and providers. The amendments require that bank account and tax file number (TFN) details be provided at the time the claim is made, and not at another time. Currently, an individual has 28 days after the CCS claim is submitted to provide these details. This can result in a debt to families when CCS payments are made without information being provided within the required time frame.
While the government argues it is trying to avoid families acquiring this debt, Labor Senators note that these families are indeed eligible for Child Care Subsidy and for early learning and care, but may be unable to access urgent care because they don’t have immediate access to their personal information.
The government’s own majority report reveals submissions to the inquiry were overwhelmingly concerned about the negative impact this change could have on families in difficult circumstances who do have immediate access to their personal documents (e.g. families fleeing domestic violence or natural disasters).
Indeed, a number of submissions made the point that this change will actually remove flexibility currently in the system, and is designed to reduce complexity in the system for the government – not for families or providers.
Submitters who oppose the removal of the 28 day window period argued that removing this measure would be detrimental for vulnerable families.
Early Learning and Care Council of Australia (ELACCA) explained:
Currently, families making a claim for CCS have 28 days to provide a [TFN] or bank account details. In the current legislation, the provision of this information is required for the individual’s CCS claim to be effective, which affects their CCS eligibility. However, their eligibility is already verified, and this information is only required for the payment (and reconciliation) of subsidies. If the information is not provided within the 28 day window, a family is deemed CCS ineligible and may incur a debt with their provider.
The proposed changes may reduce administrative burden for the Department of Human Services but will increase the administrative burden for families. The reduced flexibility will have a disproportionately negative impact on families experiencing vulnerability or disadvantage, such as women and children escaping domestic and family violence who may not have ready access to their personal information.
Removing the 28-day period, and blocking families from registering for the CCS without bank account or TFN details immediately available will reduce access to early learning, is unreasonable and lacks compassion for the circumstances of families.
Labor Senators do not believe that the administrative convenience of government should be privileged above the needs of families and providers.
Labor Senators believe Bill should be amended to retain the current 28-day grace period for providing personal information to better meet the needs of families and providers.
Recommendation
Labor Senators recommend that the bill be amended to protect access to early education and eligibility for CCS by retaining the 28 day window period for the provision of bank account or tax file number (TFN).
Senator Louise PrattSenator Deborah O'Neill
Deputy ChairMember