Taking all reasonable steps to collect gap fees

You must take all reasonable steps to collect gap fees, as required under the Family Assistance Administration Act (the Act).  

This means you must collect gap fees using electronic funds transfer (EFT), unless an approved exception applies.

What does ‘taking all reasonable steps’ mean?

Under the Act, taking all reasonable steps means you have active, ongoing and effective arrangements in place so families can pay gap fees electronically.

You must have clear policies and procedures that explain how you will:

• administer Child Care Subsidy (CCS), and
• comply with Family Assistance Law (FAL).

The sections below set out the key requirements. If your arrangements are missing, unclear, or not applied consistently, you may not be meeting the requirement to take all reasonable steps.

Provide clear advice and support to families

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

• fee amounts
• EFT payment options your service accepts
• payment and billing cycles, including when payments are due
• the status of a family’s gap fees, including amounts due, paid and owing.

Some families may need extra help to understand their gap fee responsibilities or to use EFT systems. You should identify these families early and discuss appropriate support options.

Clear and proactive communication helps families pay on time and reduces the risk of debts building up.

Offer a range of EFT payment options

You are encouraged to offer EFT payment options that are practical and accessible for families.  

Business.gov.au has guidance on EFT payment methods. You may also seek advice from your third-party software provider.

Include EFT information in your policies

Your fee policies and enrolment documentation should clearly explain:

• how and when families must pay gap fees  
• accepted EFT payment methods
• payment due dates or billing cycles
• what actions you will take if gap fees are not paid
• when you will take those actions.

Your policies should guide staff decision‑making and help keep responses consistent.

Monitor payments

You must actively monitor gap fees that are due, paid and outstanding.

To do this, you should:

• use appropriate systems, processes and technology
• train staff and clearly define their responsibilities
• keep accurate and up‑to‑date records.

You must also manage the risk of error, misuse or fraud. This may include:

• undertaking spot checks
• internal or independent audits
• clear governance and oversight.

You should give families regular updates about their accounts, including paid and unpaid fees.

Collect gap fees regularly

CCS is usually paid every 14 days. We encourage services to collect gap fees on a regular cycle, such as fortnightly.

If a family misses a gap fee payment, contact them as soon as possible to collect the overdue amount. If you do not collect gap fees regularly, families may build up large debts that are difficult to recover.

Gap fee collection cycles should be no longer than one month.

You cannot waive the gap fee unless there is a declared period of emergency. Families receiving CCS must make a co-contribution.

You may use other methods to support on-time payments, including:

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

Intent to collect gap fees

Once you charge a gap fee, you must not return or credit it in any form. This includes refunds, discounts or other arrangements.

If you charge a gap fee with the intention of returning it, the payment is not genuine and does not meet legal requirements.

You must collect all gap fees using EFT and keep them, unless a lawful exception applies.

Have a plan to manage debts

If a family does not pay their gap fees, you must still take all reasonable steps to collect the debt.

Your policies and procedures should explain how you will manage unpaid fees, including:

• how and when you will follow up outstanding amounts  
• when you will give written notification of overdue fees
• how you will advise families of ongoing non-payment consequences
• when you will offer payment plans, where appropriate.

If non-payment continues, your policies may also cover:

• debt collection options
• steps to pause or end care arrangements.

You may consider writing off a debt only:

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

If you allow families to continue to attend your service, you must make sure they pay new gap fees, and you must closely monitor payments.

Regularly writing off debts or waiving gap fees when it is not allowed does not meet the requirement to take all reasonable steps.

You must keep records of your actions, including:

• correspondence with families  
• follow-up activities
• debt collection referrals.

When a family does not agree to pay by EFT

If a family does not agree to pay the gap fee using EFT, you may:

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

EFT exceptions are only available in limited circumstances.  

Manage an EFT exception

An EFT exception does not remove your responsibility to collect gap fees.

If an exception applies to an individual or a service, you must still take all reasonable steps to collect the gap fee using the approved alternative method. You must keep evidence of payment and compliance.  

The department undertakes regular compliance activities. Your policies should clearly explain how you manage payments when an EFT exception applies.

Collecting gap fees for Family Day Care and In-Home Care

From 1 January 2026, Family Day Care (FDC) and In Home Care (IHC) providers must collect CCS gap fees directly from families.  

Educators in these services can no longer collect gap fees on behalf of providers.

Families must pay all gap fees by EFT to:

• a provider-nominated bank account, or  
• a provider- nominated online payment system or payment gateway.

If exceptional circumstances apply, FDC and IHC providers may apply for an EFT exception.

Educators must not collect or receive gap fees into accounts that are not controlled by you. These arrangements do not meet legal requirements.

You must have systems and checks in place to ensure that:

• all gap fees go directly into an account you control or a nominated payment gateway
• payment information is visible and available to you
• informal or unmanaged payment practices are not used.

You are responsible for collecting gap fees in line with the law. If fees are not collected correctly, you – not the educator – may face compliance action.

You must keep proper records to show you meet EFT and gap fee requirements.