Explanatory Memorandum
(Circulated by authority of the Minister for Early Childhood Education, Childcare and Youth the Honourable Kate Ellis MP)Outline and financial impact
Business continuity payments
From the time of transition to the Child Care Management System, child care benefit (CCB) is paid to a service weekly or fortnightly in arrears, based on reports provided through the Child Care Management System. Payment of CCB in arrears does not provide a buffer for services whose ability to report has been disrupted due to circumstances beyond their control. Amendments are made to introduce business continuity payments to support a service's financial viability during a period of disruption. Once the payments to a service have ended, they are offset against any subsequent payment due to the service under the family assistance law or under the Child Care Management System Act.
Compliance with child care services' obligations
Statements to families
Approved child care services are currently required to provide statements to individuals receiving CCB fee reductions every four weeks, setting out, among other things, their fees and the amount of CCB fee reduction. The start date for the statement period can vary for children in the care of the service. The requirement to issue statements every four weeks and the varying start dates have caused unintended complexity for services. Amendments are being made to simplify these requirements so that services have flexibility about when they issue the statements, while still ensuring that the required information is provided to families for all periods of care.
Discretionary suspension for 10 infringement notices
Where a child care service is given 10 infringement notices within a 12 month period for contravening civil penalty provisions, current legislation requires the automatic suspension of CCB approval for the service. Other suspension and cancellation provisions applying to CCB approval are discretionary. This amendment will make the suspension discretionary, enabling the Secretary to take into consideration the impact of suspension or cancellation on the families using the service.
Notification when a service ceases operation
An operator of an approved child care service must, as a condition of the service's continued approval, notify the Secretary when it intends to cease operating the service at least 30 days before the operator ceases to operate the service. Amendments are made to require the operator to notify that they have decided to close the service or transfer ownership at least 42 days before they cease to operate the service. This will provide additional time to deal with any potential disruption to families. Operators that are unable to provide 42 days notice, because they have to cease the operation earlier, in order to comply with Commonwealth or State/Territory law, or due to other circumstances beyond their control, will be required to provide notice as soon as possible after the decision to cease operating the service is made. The existing penalty regime will continue to apply in relation to failure to comply with these notification requirements.
Transition to the Child Care Management System
Under the pre-Child Care Management System services were paid quarterly CCB advances based on CCB fee reductions expended by the services in a penultimate quarter. This advance was acquitted once the service submitted usage information from that quarter and any over advance was adjusted from the subsequent quarterly advance. Services are now paid CCB fee reductions weekly or fortnightly in arrears based on actual usage, under the Child Care Management System.
The acquittal of quarterly advances occurred either prior to or post the service's transition to the new system.
This amendment will clarify that there is authority to recover over advanced amounts paid under the previous quarterly advance system where the acquittal occurred prior to a service transitioning to Child Care Management System and the over advance amounts were not recovered before the transition. These amendments are retrospective to 29 June 2007 (commencement of the amendments made for the purposes of the Child Care Management System).
The final acquittals on transition to the Child Care Management System may result in an amount to be paid to the approved child care service. Amendments are made to provide for a clear power to appropriate funds for the purposes of making payments to services resulting from the final acquittals.
FINANCIAL IMPACT
Nil.