Outcome 1: Support access to quality child care

Improved early learning, schooling, student education outcomes and transitions to and from school through access to quality child care, support, parent engagement, quality teaching and learning environments.

Build a sustainable national child care system that supports parents to enter and remain in the workforce while providing quality care and early learning, especially for children who are vulnerable or disadvantaged.

Our performance highlights

Growth in the number of families using approved child care

Figure 2.1: Number of families using approved child care, 2009–10 to 2015‑16

Figure 2.1 shows that over the period 2009–10 to 2014‑15 there has been a constant increase in the number of families accessing, long day care, family day care and in-home care, occasional care and outside school hours care. There has also been a constant increase in the total number of families access care
Figure 2.1: Number of families using approved child care, 2009–10 to 2015‑16

Sources: Department of Education and Training administrative data for 2009‑10 to 2014‑15 and departmental modelling.

Since 2009–10, the number of families using approved child care has increased by more than 27 per cent, from around 800,000 in 2009–10 to more than 1 million families in 2014‑15. It is estimated that more than 1.1 million families used approved child care in 2015‑16. In the same period, there has been an increase from around 1.16 million children attending approved care in 2009–10 to an estimated 1.67 million children in 2015‑16. Approximately $7.3 billion was provided by the Government in child care fee assistance to families in 2015‑16.1


1As a result of machinery of government changes during 2015‑16, $2.1 billion in child care fee assistance was provided by Department of Social Services and $5.2 billon was provided by the department.

Our analysis

The Administrative Arrangements Order of 21 September 2015 saw the transfer of early childhood and child care policy, programs and coordination from the Social Services portfolio to the Education and Training portfolio. This machinery of government change, while continuing to ensure a whole-of-government approach to supporting workforce participation, strengthened the focus on providing quality child care and early learning opportunities for children as part of the broader education continuum. The department managed the transfer of early childhood and child care functions with minimal disruption to undertaking the business of government and with a continued commitment to stakeholder engagement.

Our priorities

The Australian Government spent approximately $7.3 billion in 2015‑16 in child care fee assistance to support families to work, train or study, as well as providing assistance to child care services to help improve their service delivery. This funding supports a child care system where robust compliance and regulatory systems are required. This ensures families are able to participate in the workforce, confident that the care and development of their children is in safe hands. In 2015‑16 the department undertook significant work to support these priorities including policy development, stakeholder engagement, supporting states and territories in quality monitoring, implementing pilot programs and compliance action.

The department continues to deliver initiatives to improve the quality, flexibility and affordability of child care. As part of the 2015‑16 Budget, the Government announced the Jobs for Families Child Care Package in response to the Productivity Commission Inquiry into Childcare and Early Childhood Learning, which reported in 2015. A Regulation Impact Statement process on the proposed reforms was completed in 2015‑16. This involved extensive stakeholder consultation leading up to the development and introduction of the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 on 2 December 2015. This was followed by a Senate Inquiry into the Bill in March 2016. The Bill, and the Family Tax Benefit reform legislation that was to have provided the savings for the additional child care investment, did not pass before the Parliament was dissolved in May 2016. The commencement of components of the package that require legislative change has subsequently been deferred until July 2018.

One element of the Jobs for Families Child Care Package, the Nanny Pilot Programme, was introduced in January 2016 to assist families struggling to access child care services including families that include shift workers, or who live in regional or remote areas or away from existing child care services. Families earning up to $250,000 per year are eligible to participate in the pilot, which will run until 30 June 2018. An independent evaluation will take place throughout the pilot to help the Government develop future policy for care provided in the family home. The pilot had a slower than expected initial take-up due to the time required for service providers to find suitable nannies for the families and for care to commence. In response to feedback on the pilot, the Government lifted the maximum per child subsidy from $5.95 an hour to $8.50 an hour from 1 June 2016.

To prepare for the commencement of the new Inclusion Support Programme (ISP) from 1 July 2016, the department consulted on the draft ISP guidelines in late 2015. The guidelines incorporate a range of stakeholder feedback arising from the Productivity Commission Inquiry into Childcare and Early Childhood Learning and the Jobs for Families Child Care Package Regulation Impact Statement. Stakeholders welcomed the opportunity to comment on the ISP guidelines, with more than 50 submissions received. Many stakeholders praised the increased rate and flexibility of the ISP subsidy for an additional educator. They also welcomed the introduction of financial support for innovative and flexible solutions to include children with additional needs alongside their typically developing peers in early childhood and child care services.

The department put in place arrangements to support child care services that are currently accessing inclusion support to make the transition from the Inclusion and Professional Support Program (IPSP) to the ISP. The department made regular contact with child care services, and with IPSP and ISP service providers, so they understood the arrangements for maintaining continuity of inclusion support in the transition period.

Another element of the Jobs for Families Child Care Package, the Connected Beginnings program, commenced on 1 July 2016, and will support the integration of child care, maternal and child health and family support services with schools in selected Indigenous communities experiencing disadvantage. In 2015‑16 the department analysed high need areas and consulted with state and territory governments and community stakeholders to inform program design. An expert panel supported the design of the program, underpinned by contemporary research. The first service under this program will commence in Alice Springs in early 2016–17 and in a small number of other selected communities later in the year. The program will be progressively evaluated in partnership with the Department of Health.

Since the announcement of the Jobs for Families Child Care Package in the 2015‑16 Budget the department has been providing support to Budget-Based Funded (BBF) services to ensure they understand the package and start working towards its implementation. This support has included regular communication and a series of face-to-face meetings of services in each state and territory. Consultants have been engaged to provide one-on-one support to funding recipients, and are currently working with BBF services to help them develop transition plans. This support will continue in 2016–17, including helping services to review and restructure business models and develop administrative systems to administer fee subsidies on behalf of families.

A key achievement in 2015‑16 was the conclusion of negotiations for the National Partnership on the National Quality Agenda for Early Childhood Education and Care 2015‑16 to 2017–18, and the offer of the Partnership to states and territories. The National Partnership underpins the National Quality Framework (NQF). The NQF is a unified regulatory system that governs the child care sector and seeks to provide better educational and developmental outcomes for children by driving continuous improvement in the quality of early childhood and child care services and national consistency in service quality. A review to assess whether the objectives of the NQF were being achieved in the most efficient and effective way commenced in 2014. In 2015, state and territory governments advised the review could not be finalised until a new National Partnership was agreed. The review is expected to be finalised in 2016–2017.

In 2015‑16 the department continued to focus child care payments compliance effort on disrupting the business practices of high risk services. Targeted compliance action undertaken by the department’s state network and ongoing collaboration with the Australian Federal Police, Department of Human Services and state regulatory agencies is also helping to reduce non compliance and fraud. In 2015‑16 the department imposed sanctions and penalties on 109 services, including suspending or cancelling approval to administer child care payments for 46 services. The estimated financial impact of departmental compliance activity during 2015‑16 was over $400 million.

The department introduced three new rules (via legislative instrument) to help ensure that the operation of family day care (FDC) services is compliant with the requirements of the National Law and the Family Assistance Law. These rules were introduced to improve transparency, strengthen child safety and apply conditions consistently across states and the Commonwealth. A fourth new rule relating to child swapping, introduced in October 2015, has resulted in significant savings to the Commonwealth in child care payments (see Figure 2.2).

Improvements to the child care regulatory framework

Figure 2.2: Child care payments made to family day care services related to child swapping

Figure 2.2 illustrates to dramatic drop in total weekly childcare payments made to family day care services immediately following the new rule taking effect.
Figure 2.2: Child care payments made to family day care services related to child swapping

Sources: Department of Education and Training administrative data

The majority of approved child care providers are providing high quality, accessible and affordable child care to Australian families and are complying with their legal requirements. However, a proportion of approved child care providers that have deliberately decided not to comply and to commit fraud, particularly in the FDC sector.

In collaboration with the FDC sector, the department developed a legislative response known as the Child Swapping Integrity Measure to enhance regulation while safeguarding legitimate FDC operators and the families who depend on them. The measure was introduced on 12 October 2015 and aimed to restore the reputation of FDC as an important, flexible care type for families.

The Child Swapping Integrity Measure removes the entitlement for FDC educators and their partners to claim child care fee assistance for their own children if either provides family day care on the same day that their own child receives family day care, unless one or more specified circumstances apply. The specified circumstances relate to disability, remoteness, work or education. However, a family day care educator can access other forms of care for their children such as long day care.

The measure proved to be very effective and continues to save the taxpayer around $7 million each week. It is expected to save $931 million over four years to 2018–19 and represents a significant contribution to the sustainability of the national child care system.

SUPPORT ACCESS TO QUALITY CHILD CARE

Build a sustainable national child care system that supports parents to enter and remain in the workforce while providing quality care and early learning, especially for children who are vulnerable or disadvantaged


Program 1.6 Support for the Child Care System

Assists families to participate in the social and economic life of the community by supporting quality and affordable child care


Program 1.7 Child Care Benefit (CCB)

Reduces the cost barrier for families to access quality and flexible child care services


Program 1.8 Child Care Rebate (CCR)

Provides additional financial assistance to reduce the cost barrier for families to access quality and flexible child care services


Program 1.9 Child Care Subsidy (CCS)

Improves access to quality child care by providing assistance to meet the cost of child care families engaged in work, training, study (new single means tested payment to replace the CCB and CCR from July 2018)


Our program performance

Table 2.1: Program 1.6 Support for the Child Care System
KEY PERFORMANCE INDICATORS ESTIMATE ACTUAL
Percentage of children in priority groups using child care services:a
  • Indigenous children
  • children from culturally and linguistically diverse backgrounds
  • children with disability
Percentage in each priority group:
  • 3% Indigenous children
  • 17% children from culturally and linguistically diverse backgrounds
  • 3% children with disability
Percentage in each priority group:
  • 3% Indigenous children
  • 17% children from culturally and linguistically diverse backgrounds
  • 3% children with disability
Extent of implementation of initiatives to improve the quality and affordability of child care Improve access to quality and affordable child care Refer to Our priorities section.
Number of children in child care assisted through Jobs, Education and Training Child Care Fee Assistance (JETCCFA)b 24,000 children 24,000 children
Number of families assisted through JETCCFAc 16,700 families 16,700 families
Number of child care services receiving assistance to improve access and quality of child care—by type of assistance Number of child care services:
  • 1,884 receiving sustainability assistance
  • 119 receiving establishment assistance
  • 5,500 receiving subsidy assistance to include children with additional needs
  • 298 Budget-Based Funded Services
Number of child care services:
  • 1,829 receiving sustainability assistance
  • 168 receiving establishment assistance
  • 5,700 receiving subsidy assistance to include children with additional needs
  • 298 Budget-Based Funded services
Number of families assisted through the Home Based Carer Subsidy Programme (Nanny Pilot Programme)d Up to 3000 families 145 families

a Actuals are based on 2013 National Workforce Census. The number of children in target groups increases at approximately the same rate as the growth in child care. As a result, the proportion remains stable.

b These are estimated figures for 2015‑16. Actual data for 2015‑16 is not available at the time of publication.

c This measure was originally published as ‘number of parents’ in the 2015‑16 Social Services Portfolio Budget Statements (PBS). Data is for ‘number of families’ assisted, as corrected in the 2016–17 Education and Training PBS. These are estimated figures for 2015‑16. Actual data for 2015‑16 is not available at the time of publication.

d The Interim Home Based Carer Subsidy Programme (Nanny Pilot Programme) began operation in January 2016. It did not meet its target number of families within the first six months of operation, but numbers are building over time.

Table 2.2: Program 1.7 Child Care Benefit
KEY PERFORMANCE INDICATORS ESTIMATE ACTUAL
Number of families receiving Child Care Benefit (CCB)a
  • CCB only
  • CCB and Child Care Rebate (CCR)
Number of families:
  • 86,000 CCB only
  • 673,000 CCB and CCR
Number of families:
  • 86,000 CCB only
  • 673,000 CCB and CCR
Percentage of families using child care services that receive a child care payment (CCB or CCR)a 99.6% 99.6%

a These are estimated figures for 2015‑16. Actual data for 2015‑16 is not available at the time of publication.

Table 2.3: Program 1.8 Child Care Rebate
KEY PERFORMANCE INDICATORS ESTIMATE ACTUAL
Number of families receiving Child Care Rebate (CCR):a
  • CCR only
  • Child Care Benefit (CCB) and CCR
Number of families:
  • 345,000 CCR only
  • 673,000 CCB and CCR
Number of families:
  • 345,000 CCR only
  • 673,000 CCB and CCR
Percentage of families using child care services that receive a child care payment (CCB or CCR)a 99.6%  99.6%

a These are estimated figures for 2015‑16. Actual data for 2015‑16 is not available at the time of publication.

Table 2.4: Program 1.9 Child Care Subsidy
KEY PERFORMANCE INDICATORS ESTIMATE ACTUAL
Number of families receiving Child Care Subsidy (CCS)
 
N/A in 2015‑16 N/A because the CCS does not commence until July 2018
Percentage of families using child care services that receive CCS N/A in 2015‑16 N/A because the CCS does not commence until July 2018