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Free childcare will dry up on 12 July: Here’s what it means for you

Federal Education Minister Dan Tehan has announced free childcare will come to an end on 12 July 2020. (Source: Getty, AAP)

Australia’s free childcare scheme, which was introduced at the beginning of April to keep struggling childcare centres afloat, will officially come to an end on 12 July, Federal Education Minister Dan Tehan has announced.

Speaking at a press conference from Canberra this morning, Tehan said the Australian government’s successful job at containing Covid-19 had seen demand  for childcare services grow by 75 per cent at more than 40 per cent of surveyed providers.

“We need to put together a package which is sustainable into the future and what we have seen is demand grow and grow over the last few weeks so that we needed to change the system,” Tehan said.

“This system was designed for when demand was falling. Now we are seeing demand increasing and we think that we have the balance right to support families.

“Given this, the government has taken the decision that the temporary childcare package, which includes free childcare, will end on July 12.”

If you’re a parent who uses childcare centre services or a worker at a childcare centre, here’s what this means for you:

If you’re a parent…

Childcare will resume as normal from 13 July, which means you’ll see a return of the Child Care Subsidy, which depends on your family’s income and the type of childcare you use.

However, the eligibility criteria for the Child Care subsidy will be relaxed somewhat given many parents may be struggling to find employment at the moment.

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

To qualify for the Child Care Subsidy, a parent must be working, studying or volunteering for a minimum number of hours.

“These families will receive up to 100 hours per fortnight of subsidised care during this period. This will assist families to return to the level of work, study or training they were undertaking before COVID-19.”

So whatever fees you were paying for before the free childcare scheme will return. However, if you’ve seen reduced income, the eased activity test means you will only pay the gap between the subsidy and the cost of childcare, Tehan said.

Parents who are on JobSeeker automatically qualify for 72 hours of subsidised care, Tehan added.

If you’re a childcare provider...

JobKeeper payments to people from the childcare sector will stop flowing from 20 July.

But you won’t be without financial support: the government will implement a $708 million transition package starting from 13 July to 27 September to support the transition to the Childcare Subsidy system.

Under the package, the government will give childcare centres a transition payment of 25 per cent of their fee revenue, but in return, the government expects childcare fees to remain capped.

“What we are asking of the sector is that childcare fees will remain capped … and services will need to guarantee average employment levels over the three months to protect staff who will move off the JobKeeper payment.”

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