Taking all reasonable steps to collect gap fees

What is taking all reasonable steps?

You should have policies and procedures that set out how you will responsibly:

• administer CCS 
• comply with Family Assistance Law (FAL).

These are known as your governance arrangements.

Taking reasonable steps to collect the gap fee electronically means:

Providing clear advice and support to families

You should provide regular, clear and timely advice about gap fees to families. The advice should include:

• fee amounts
• EFT payment options
• payment/billing cycles
• the status of a family’s gap fees, including amounts due, paid and owing.

Some families may need help paying the gap fee or using EFT. We encourage you to talk to families who need help about financial support options.

Offering a range of EFT payment options

We encourage you to offer a range of EFT payment options. 

Business.gov.au has guidance on EFT payment methods. You can also talk to your third-party software provider.

Including EFT information in your policies

Your fee policies and enrolment forms should include information about EFT payment options. 

Your fee policy should include:

• how often gap fees will be collected
• the steps you will take if the gap fees are not paid
• when you will take these steps.

Monitoring payments

You must monitor gap fees due, paid and owing. So this is done accurately, you should:

• use good systems, processes and technology
• ensure your staff are trained and skilled.

You must also reduce the risk of error or fraud. This could include:

• doing spot checks
• running independent audits
• providing clear governance and oversight.

You should send families regular and timely advice about fees that are due, paid and owing.

Collecting gap fees regularly

CCS is usually paid every 2 weeks. We recommend that you collect gap fees on this same cycle. This will allow you to balance accounts quickly and easily.

If a gap fee payment is missed, contact the family to collect the outstanding amount before the next payment is due. Without regular gap fee collection, families may end up with a large debt. This can be difficult to recover.

Ideally, the collection interval for gap fees should be no longer than a month.

You cannot waive the gap fee for a family, unless there is a declared period of emergency. If a family gets CCS, they must make a co-contribution.

You may consider using other methods to encourage families to pay gap fees on time, like:

• requiring families to pay bonds
• imposing late payment or direct debit default fees.

Having a plan to manage debts

Despite your best efforts, you may encounter a family who does not pay their gap fees. In this case, you must still take all reasonable steps to collect the gap fee.

Your policies and procedures should guide how you will manage debts. This could include:

• following up debts with families in a timely manner
• providing families with advice in writing about amounts overdue and consequences of non-payment
• implementing payment plans to help families manage a debt over time.

For circumstances where families continue to not pay, you may consider including in your policies:

• debt collection options
• options to pause care arrangements.

You may consider writing off a debt if it becomes too costly to pursue. You should only do this:

• in exceptional circumstances
• where it is clear you’ve taken all reasonable steps to collect the outstanding fees. 

You must keep records of your efforts, including:

• correspondence with families
• referrals for debt collection.

When a family does not want to use EFT

Where a family won’t pay the gap fee using EFT, you can:

• apply for an EFT exception
• charge full fees, or
• refuse to provide care.

EFT exceptions are only available in limited circumstances. 

Managing an EFT exception

An EFT exception does not mean you don’t have to collect the gap fee.

Where an exception applies to an individual or a service, you must take all reasonable steps to collect the gap fee in cash. If you are audited, you’ll need to show evidence that you collected the gap fee in cash.

You should have policies and procedures in place that address arrangements where an EFT exception applies.

When an educator collects fees on your behalf

It is best practice for a provider to collect all gap fees. This is because:

• it reduces the risk of non-compliant or fraudulent claims for CCS
• it is the provider that experiences the consequences of any non-compliance.

Newly approved Family Day Care and In Home Care providers must collect gap fees into a bank account that the provider owns. While educators may collect the gap fee on behalf of these providers, the payment must go to a bank account controlled by the provider. Read more about governance arrangements for new providers on our get ready to apply page.

Where an educator collects the gap fee on your behalf, the provider must ensure the gap fee is collected electronically.

If the educator does not comply with the law, it’s the provider that experiences the consequences. This can include:

• cancellation of your approval
• an infringement
• criminal proceedings.

Having an educator collect gap fees can also place a greater administrative burden on you.

Educators who collect gap fees should be able to show they have taken all reasonable steps to collect gap fees.

You must maintain oversight of gap fee collection and ensure compliance. In practice, this could include:

• collecting copies of educator bank statements
• conducting regular audits or spot checks
• requiring educators to provide regular reports about the status of individual family accounts, including:
  • where gap fees have not been paid 
  • steps taken to pursue debts.

You should also be aware of the EFT payment options an educator provides. If you are not satisfied that an educator can collect the gap fee using EFT, you must collect the gap fee.

You must have appropriate record keeping and storage requirements to ensure records are available to inform audits, even after an educator leaves your service.