Electronic payment of gap fees

Families using early childhood education and care must pay the gap fee electronically. Providers must take all reasonable steps to collect gap fees electronically.

On this page:

What is the gap fee?

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

What is EFT?

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.

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

Why is this necessary?

This requirement helps us protect CCS against fraud and non-compliance. It helps us prevent fraudulent CCS claims for care that did not take place. In turn, this ensures CCS flows fairly to families.

Most families get salaries or benefits electronically, making it easy to pay the gap fee using EFT. EFT payments are also safer for staff and easier to administer.

Can educators collect the gap fee?

It is considered 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.

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

Where an educator collects the gap fee on your behalf, it is your responsibility as the provider to ensure the gap fee is collected electronically.

New 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.

To ensure that you and your educators are complying, read our guidance on taking all reasonable steps to collect gap fees.

What about payments for care that occurred prior to 1 July?

This requirement came into effect on 1 July 2023. You must collect all gap fees electronically, even if the fee relates to care that occurred before 1 July.

Are payment plans allowed?

Families can pay the gap fee via a payment plan as long as:

  • payment is made using EFT
  • the provider has a record of the payment plan arrangement.

Are payroll deductions allowed?

Most families can pay the gap fee via a payroll deduction as long as:

  • payment is made using EFT
  • the provider can identify the electronic payment as being the gap fee for the family.

Is salary sacrificing allowed?

Families cannot pay their gap fee by salary sacrifice through their employer because this is considered a third-party payment.

Families can, however, reduce their early childhood education and care fees by salary sacrificing some or all of their total fees before CCS is applied.

If a family chooses to salary sacrifice a portion of their total fees, the family’s CCS rate will then be applied to the reduced session fee. This is because families are only entitled to CCS in relation to the amount they have to pay after any third-party payments.

The family must still pay a gap fee using EFT.

Read more and see an example about salary sacrificing on our third-party payments page.

How can you help families use EFT?

Most families get salaries or benefits electronically, making it easy to pay the gap fee using EFT.

If a family needs 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 them of the support options outlined below.

Financial support services

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

Are there any exceptions?

Exceptions are available in the following limited circumstances:

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

In both cases, a provider must apply on behalf of the individual or service seeking exception. Exceptions are re-assessed on a yearly basis to ensure the individual or service remains eligible.

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. You must supply supporting evidence.

Learn more and apply for an individual exception

If you have trouble accessing the online form, download the individual exception form.

Service exceptions

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 other exceptional circumstances. Circumstances that impact a small number of educators at a service will not generally be considered.

A service-level exception applies to all families attending a service.

Providers must apply on behalf of the service seeking exception. You must supply supporting evidence.

Learn more and apply for a service-level exception

If you have trouble accessing the online form, download the service-level exception form.

How will we check payments?

We conduct regular audits to check providers are taking all reasonable steps to collect gap fees electronically.

We also share information and data obtained through audits with the Australian Taxation Office. This ensures recipients of government payments are meeting their tax and superannuation obligations.

We conduct audits by either:

  • visiting your service and conducting a face-to-face audit, or
  • requesting information through a section 158 notice.

Face to face audits

When we conduct a face-to-face audit, we:

  • contact a person with management or control of the provider (PMC) to let you know we’re planning an audit
  • arrange a suitable time to visit your service
  • let you know what information you should have ready and how long we expect the audit to take.

Section 158 notices

We may ask you to provide information using a section 158 notice.

A PMC must respond to the notice within 14 days.

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

Read more about section 158 notices and what to do if you get one.

What you need to do

If we contact you about an audit, you must respond promptly. We’ll provide you with more information about what you should have ready.

The type of information we may request during an audit includes:

  • statements of entitlements
  • Complying Written Arrangements
  • provider, service or educator bank statements
  • explanations about fee discrepancies, such as payment plans or outstanding fees
  • evidence of the steps you’ve taken where a gap fee has not been paid, or has not been paid electronically
  • policies, procedures or other documents that show how your service administers CCS and complies with Family Assistance Law.

How can you ensure you are complying?

To help you comply with this obligation, we have guidance on taking all reasonable steps to collect gap fees.

What are the consequences if you don’t comply?

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.

Online learning

Complete the Electronic Payment of Gap Fees course in Geccko to learn more.

Learn more about Geccko