Senate

Revised Explanatory Memorandum

(Circulated by authority of the Minister for Education, the Honourable Dan Tehan MP)

OUTLINE

The purpose of the Bill is to address feedback from families and the child care sector and findings from ongoing consideration and evaluation of the child care package. The Bill makes policy refinements, addresses unintended consequences resulting from the implementation of the child care package, and makes a number of clarifying and technical amendments.

The Bill comprises two Schedules.

Schedule 1 - Amendments relating to child care subsidies

This Schedule is divided into three Parts, for amendments that commence:

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at the start of the first Child Care Subsidy (CCS) fortnight (within the meaning of the A New Tax System (Family Assistance) Act 1999) to occur wholly after Royal Assent;

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on 13 January 2020; and

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on 13 July 2020.

Amendments to the A New Tax System (Family Assistance) Act 1999 include amending the requirements on child care providers for the issuing of Additional Child Care Subsidy (ACCS) (child wellbeing) certificates, by removing the 50 per cent limit on the number of children that a provider can self-certify for ACCS (child wellbeing). This will reduce barriers to vulnerable children accessing early learning and child care services.

Further amendments include allowing the Minister for Education to prescribe circumstances in which a third party may contribute to meeting the cost of an individual's child care fees without affecting that individual's Commonwealth child care subsidies. This will help ensure the cost of child care is not a barrier to vulnerable and disadvantaged children attending early learning and child care services.

A new rule-making provision will also be included to allow the Minister for Education to prescribe specific circumstances in which Commonwealth child care subsidies can be paid where the child is absent at the start or end of an enrolment. This will ensure families are not unfairly disadvantaged by a rule intended to prevent the inappropriate use of absence provisions by some child care providers.

These amendments also incorporate In Home Care more fully into the Family Assistance Law. In Home Care is a child care type that was revised following the outcome of the Nanny Pilot Programme and the former In Home Care program reviews. These reviews were completed after the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Act 2017 was passed. The amendments include the In Home Care rate alongside the rates for other care types, and the capacity for the Minister for Education to specify eligibility criteria and care requirements that must be met for access to Commonwealth-subsidised In Home Care places. Eligibility criteria are necessary as In Home Care is a targeted and capped care type.

Amendments to A New Tax System (Family Assistance) (Administration) Act 1999 include increasing the number of weeks at which enrolments automatically cease due to non-attendance from 8 to 14 weeks. This will reduce regulatory burden on both families and child care providers by eliminating the need for children to be re-enrolled following most regular breaks in attendance, such as where a child does not attend care during the school term. This is the only amendment to commence on 13 January 2020, to enable the change to be implemented for the December-January (2019-20) school holiday period.

Amendments to A New Tax System (Family Assistance) (Administration) Act 1999 in this Schedule also clarify that decisions made under section 105 of that Act (Secretary initiated review) must first be subject to internal review before application is made to the Administrative Appeals Tribunal (AAT). These amendments align with existing policies and practices, and will ensure that where a person is dissatisfied with a decision, that person accesses internal review mechanisms prior to applying to the AAT.

Further amendments also include simplifying the process around making claims for CCS. This ensures that the requirements for making an effective claim for CCS are clearer and simpler, while retaining scope for flexibility regarding some of the requirements in limited circumstances.

There are also a number of other refinements, corrections and consequential amendments, the purpose of which is to clarify the policy intent of the Commonwealth and address unintended consequences.

Schedule 2 - Amendments relating to ensuring the integrity of the child care subsidy system

This Schedule brings the requirements for the approval of child care providers and services into closer alignment with related state and territory laws, and enhances the Commonwealth's child care subsidy payment integrity framework.

The amendments include ensuring that where an approved provider or child care service is suspended or cancelled under the Education and Care Services National Law (effectively the state/territory licencing regime for operating child care services), access to Commonwealth child care subsidies will be automatically suspended or cancelled. The amendments also include a capacity for child care providers to request voluntary suspension of their Commonwealth approval in appropriate circumstances.

The Schedule also contains administrative and technical amendments that bring clarity to policy intent and address unintended consequences.

FINANCIAL IMPACT STATEMENT

The measures in this Bill do not have a discernible financial impact.

Note - Minister's Rules made under new powers established by this Bill could have a future financial impact. For example, the capacity to prescribe in the Minister's Rules certain payments (e.g. ABSTUDY) that an individual may be receiving in order to be eligible for ACCS (grandparent). Detailed costings would be developed and agreed at the appropriate time in the process of making any such Rules.