Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. Josh Frydenberg MP)Chapter 9 Child care
Outline of chapter
9.1 Schedule 9 to this Bill amends the Family Assistance Act and Family Assistance Administration Act to provide limited flexibility to manage the impact of the Coronavirus, as well as future disasters, on families and on business continuity for child care services.
Context of amendments
9.2 Legislative amendments to the Family Assistance Act and Family Assistance Administration Act are required to provide the Government with limited flexibility to manage the impact of the Coronavirus, as well as future disasters, on families and on business continuity for child care services.
Summary of new law
9.3 The amendments allocate extra allowable absence days, in addition to the current 42 days, for an event or circumstance specified in the Minister's rules. The allocation of extra allowable absence days is intended to help offset absence days taken as a result of the impact of the Coronavirus. This will help ensure continued subsidised fee relief for families with children enrolled in approved child care.
9.4 The amendments also allow the Minister's rules to prescribe where a service does not need to receive a certificate issued by a medical practitioner for an additional absence caused by an illness either to:
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- the child;
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- the individual;
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- the partner of the individual; or
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- an individual with whom the child lives.
9.5 Finally, the amendments waive the current obligation of services duty to enforce payment of gap fees for a particular event or circumstance and the period specified in the Minister's rules. This will enable services to provide fee relief to families, for example, in the circumstance where a service is forced to close on and for the period of public health advice. In this situation, services cannot charge more than the hourly session fee that was charged immediately before the period specified in the Minister's rules.
Comparison of key features of new law and current law
| New law | Current law |
| Extra allowable absence days will be permitted for an event or circumstance prescribed by the Minister's rules. | The number of allowable absences (for which a reason and evidence is not required) is restricted to a total of 42 days. |
| The Minister's rules can prescribe circumstances in which a service does not need to receive a certificate issued by a medical practitioner for an additional absence caused by an illness either of:
|
Individuals must give services a medical certificate if the additional absence reason (that is, an absence after the individual has used their initial 42 days of allowable absences) is due to an illness either of:
|
| The obligation of services duty to enforce payment of gap fees may be waived for a particular event or circumstance and the period specified in the Minister's rules.
In this situation, services cannot charge more than the hourly session fee that was charged immediately before the period specified in the Minister's rules. |
Approved providers must take all reasonable steps to ensure that individuals pay a gap fee (the difference between the fee charged and Child Care Subsidy paid). |
Detailed explanation of new law
9.6 Item 1 changes the heading of subsection 10(2) from 'Up to 42 absences' to 'Allowable absences' to better reflect the purpose of this provision.
9.7 Item 2 repeals and substitutes paragraph 10(2)(c) to include an alternative criteria for when a child care service is taken to have provided a session of care on a day in a financial year. New subparagraph 10(2)(c)(ii) provides that an alternative to there being no more than 41 days of absence is that, if the Minister's rules prescribe a particular event or circumstance, the conditions referred to in new subsection (2AA) are met.
9.8 Item 3 inserts a new subsection 10(2AA), which sets out the conditions to be met, as referred to in new subparagraph 10(2)(c)(ii). The conditions that permit extra allowable absence days for an event or circumstance are prescribed by the Minister's rules. In addition, paragraph 10(2AA)(b) provides a cap where the Minister prescribes a number of days for the event or circumstance prescribed in the Minister's rules. This cap is that, as a result of the event or circumstance, there have been no more than that number of days in the financial year, or the part of the financial year, on which an approved child care service is taken to have provided a session of care.
9.9 Item 4 changes the heading of subsection 10(3) from 'More than 42 absences' to 'More than the number of allowable absences' to better reflect the purpose of this provision.
9.10 Item 5 repeals and substitutes paragraph 10(3)(a) to specify that a child care service is taken to have provided a session of care on a day in a financial year if the service is not taken to have provided the session of care under subsection 10(2). This is a consequential amendment to clarify that a family is eligible for additional absences (under subsection 10(3)) only after the allowable 42 days of absences, and any other allowable absences for a circumstance prescribed by the Minister's rules, have been exhausted.
9.11 Item 6 inserts the words "or paragraph (3)(e)" after the words "or (iii)" in subsection 10(3A). This amendment articulates that the Minister's rules may prescribe circumstances in which a service does not need to receive a certificate issued by a medical practitioner for an additional absence caused by an illness, which is required by paragraph 10(3)(e).
9.12 Item 7 is an application provision which expresses that the amendments to the Family Assistance Act in items 1 to 6 apply in relation to the 2019-2020 financial year and later financial years.
9.13 Item 8 inserts a new subsection 201B(1A), which provides that a provider is not required to take reasonable steps to recover a gap payment from individuals as required by subsection 201B(1) if:
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- the Minister's rules prescribe a particular event or circumstance;
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- the session of care occurs during that event or circumstance; and
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- any other condition prescribed by the Minister's rules for that event or circumstance are met.
9.14 The note to new subsection 201B(1A) clarifies that, in any criminal proceedings relating to an offence under subsection 201B(2), a defendant bears an evidential burden in relation to the matters mentioned in subsection 201B(1A).
9.15 Item 9 repeals subsections 201C(1) and 201C(1A) and substitutes them with new subsections 201C(1), 201C(1A) and 201C(1B) to account for circumstances in which an approved provider must not charge individuals that receive Additional Child Care Subsidy or Child Care Subsidy or prescribed payments or Child Care Subsidy higher fees. The new relevant circumstance is when the provider is not taking reasonable steps in relation to the session of care because of subsection 201B(1A). Therefore, where a provider is not recovering gap fees from individuals, services cannot charge more than the hourly session fee that was charged immediately before the period specified in the Minister's rules.
9.16 Item 10 makes a minor consequential amendment by replacing the reference to '(1A)' in subsections 201C(2) and (3) with '(1A) or (1B)'.
Consequential amendments
9.17 There will be consequential amendments to the Minister's rules to give practical effect to new powers under these amendments.
Application provisions
9.18 The amendments in Schedule 9 to this Bill generally apply in relation to the 2019-2020 financial year and later financial years.