Changes to gap fee payments from July 2023

From 1 July 2023, families using child care must pay the gap fee using electronic means.

On this page:

Mandatory electronic payment from 1 July 2023

The gap fee is the difference between the provider’s fee and the Child Care Subsidy (CCS) amount. Find out more about gap fees and Child Care Subsidy.

Electronic funds transfer, or EFT, is when a customer pays a bill using electronic means. Typical EFT payment methods include:

  • bank or credit card, including mobile wallets
  • direct deposit or bank transfer, including PayID
  • online payment systems through third-party software
  • BPAY or Centrepay
  • prepaid debit card.

This change will help us protect CCS against fraud and non-compliance. We will check EFT payments against provider and service bank statements and receipts. This way, we can prevent fraudulent CCS claims for care that did not take place. In turn, this ensures CCS flows fairly to families.

Most services already accept EFT payments. This is because it’s safer for staff and easier to administer.

Similarly, over 98% of families already use EFT to pay their gap fee. Most families get salaries or benefits electronically, making it easy to pay the gap fee using EFT.

What do providers need to do?

Most services already accept EFT payments. You must ensure your services use EFT for all gap fee payments from 1 July.

If you don’t already accept EFT, you must establish EFT payment methods by 1 July. has guidance on different EFT payment methods.

We encourage you to share this information with families at your service. We have prepared a kit you can download and use. It includes a fact sheet, social media, newsletter and web content you can use to communicate with families.

Will I need to update my hardware or software?

Most services already accept EFT payments and have appropriate systems in place to do so.

If you don’t, you’ll need to arrange hardware or software to accept EFT payments before 1 July. Providers may wish to talk to their third-party software provider for help.

What about educators who collect the gap fee?

Sometimes, educators collect the gap fee on behalf of the provider. This commonly occurs in Family Day Care and In Home Care.

Educators can still collect the gap fee. But from 1 July, educators must use EFT for all gap fee payments.

Providers must ensure educators are aware of the requirement to use EFT and have appropriate systems in place to do so.

Providers must ensure educators are using EFT. This could include:

  • conducting regular checks, or
  • requiring educators to show evidence gap fee payments have been collected.

We will provide advice soon with steps providers can take to make sure the requirements are being met.

We will check EFT payments against provider or educator bank statements and receipts. As well as any relevant reports from your third-party software.

Are payroll deductions still allowed?

From 1 July, there must be an electronic record of the gap fee having been paid by the family using care. This means that the provider must receive the gap fee as an electronic payment into their bank account and be able to identify the payment as being for that family. 

For educators/employees of a child care service, where their child/ren are receiving care at that service, reducing their wage by the gap fee amount does not meet the requirement – there must be a separate gap fee payment into the provider’s bank account.

What about families on payment plans?

From 1 July, families can continue to pay the gap fee via a payment plan as long as:

  • the gap fee is received as an electronic payment
  • the provider has a record of the payment plan arrangement.

How do I help families to use EFT to pay their gap fees?

Most families already use EFT to pay their gap fee.

If a family requires help using EFT, you can:

  • talk to them about which EFT payment option would suit them best
  • encourage them to talk to a trusted family member or friend
  • ask them to reach out to their financial institution
  • advise the family of the financial support services outlined below.

Financial support services

The Australian Government also provides support to individuals and families navigating financial crises, stress or hardship. You may wish to direct families to the following free, confidential support services:

Additional Child Care Subsidy

Families seeking an exception might be eligible for Additional Child Care Subsidy (ACCS). ACCS may cover all of a child’s child care fees.

Families need to be eligible for CCS and meet extra criteria to get ACCS. Families can find out more on the Services Australia website.


Exceptions are available in limited circumstances. We have more information about exceptions below.

How will we check payments?

The department will audit this measure from 1 July to ensure gap fees are being paid.

We will check EFT payments against provider, service or educator bank statements and receipts. We’ll also check any relevant reports if you use third-party software.

We may ask you to provide this information using a section 158 notice. A person with management or control of the provider (PMC) must respond to this notice.

We may take compliance action if you do not respond to the section 158 notice or if your PMC details are not correct in the Child Care Subsidy System.

We’ll also share information and data obtained through audits with the Australian Taxation Office. This will ensure providers getting government payments are meeting their tax and superannuation obligations.

What are the consequences if I don’t use EFT?

We may take compliance action if you fail to meet your obligations.

Compliance action could include:

  • putting conditions on your approval
  • issuing an infringement
  • suspending or cancelling your approval.

What are the exceptions and how do I apply?

Exceptions are available in limited circumstances.

Exceptions will be available for:

  • individuals at risk of family or domestic violence
  • services experiencing exceptional circumstances.

In both cases, a provider must apply on behalf of the individual or service seeking exception.

Exceptions will be re-assessed on a yearly basis to ensure the individual or service remains eligible. The department may audit providers with an exception in place.

Individual exceptions

An individual may be eligible for an exception if they reasonably fear that paying the gap fee using EFT would put them or their child at risk of family or domestic violence.

Providers must apply on behalf of the individual seeking exception.

Providers must provide supporting evidence that the individual meets the above criteria. Evidence may include:

  • letters or statements
  • referrals
  • case plans
  • certificate or determination for ACCS (child wellbeing).

Evidence must be from a suitable third-party organisation or professional, such as:

  • early intervention and support programs and services
  • state and territory child safety/protection agencies
  • state and territory government and non-government organisations that are providers of relevant services
  • medical practitioners
  • welfare agency personnel and social workers
  • police officers.

Where a provider cannot gather relevant evidence, a statutory declaration from the provider outlining why they could not gather evidence may be considered.

If required, an earlier commencement date of this exception will be considered.

Providers can apply for an individual exception at any time.

Go to the individual exception application form

Download the offline individual exception application form

Service exceptions

We may also grant an exception at the service level. This will enable a service to accept cash payments for all families attending the service.

A service may be eligible for an exception if:

  • the service is located in a remote or very remote area, and
  • experiences poor internet or phone coverage, or
  • has a significant number of families who have limited access to a financial institution, which poses a barrier to those families paying electronically.

We may consider granting an exception if a service experiences exceptional circumstances other than the circumstances above.

Providers must apply on behalf of the service seeking exception.

We will contact providers with services in remote or very remote areas directly to apply.

Providers with existing exceptional circumstances should apply for a service level exception before 1 July 2023. If exceptional circumstances occur in the future, providers can apply after this date.

Go to the service exception application form

Download the offline service exception application form