STATEMENT: Child Care Sharp Practices – JETCCFA Programme

Media Release
  • Assistant Minister for Education

 

I can confirm media reports today that the Abbott Government is increasing active compliance of the Commonwealth Jobs, Education and Training Child Care Fee Assistance (JETCCFA) programme.

This is part of a broader approach to stronger child care compliance and stronger programme guidelines by the Government after years of slipping standards and inaction under Labor.

JETCCFA is designed to provide childcare for parents on income support who are studying or training so they can secure a job. This is important to support greater workforce participation.

However, it has become increasingly clear the JETCCFA programme has been subject to exploitation in recent years by a small, but expanding, network of Family Day Care services, and parents, engaging in sharp practices.

This includes:

  • Services charging excessive fees. A number of services have been found to be charging fees upwards of $20 to $30 per hour.
  • Services claiming for hours of care not delivered. An increasing number of Family Day Care services are charging JETCCFA parents for 12 hour blocks of care per day, despite the child only being in care for a few hours.
  • Parents claiming more child care than they need to complete their study or training commitments. Some JETCCFA parents are placing their children in care over 50 hours per week - fully subsidised by taxpayers bar a 50 cent per hour per child co-contribution -despite their course only requiring a 10 or 20 hour per week study commitment.
  • Parents continuing to claim JETCCFA, despite no longer participating in, or regularly attending, study or training.

This saw Government spending on JETCCFA blowout about $28 million under Labor in 2012-13 and again the year after that, despite the number of families and children accessing the programme declining over the same period. The programme was expected to blowout a further $240 million over the next four years (to 2017-18) without action.

Much of this blowout has been driven by the ability of services and parents to make uncapped claims. As such, many of these sharp practices, while not within the intent of programme guidelines, have been undertaken within the rules due to Labor’s inaction.

This programme is not there to be abused by dodgy services looking to make an easy buck or parents using more care than they need to complete their study commitments, just because taxpayers are footing the bill. It’s not on.

The Abbott Government’s increased active compliance checks and monitoring will therefore be bolstered by the Government’s JETCCFA Budget Measure:

  • Limiting JETCCFA claims to 36 hours per week for study activities; and
  • Introducing a maximum limit of $8 per child per hour child care claimed under the JETCCFA programme once the Child Care Benefit is factored in (total of about $13 per hour per child).
  • Funding for stronger proactive compliance activity, including addressing child attendance issues and where parents have not notified a change of circumstance.

This is a fair and sensible measure given the average child care fee nationally is $7.50 per hour per child and average child care usage is 24 hours per week.

The vast majority of parents and services do the right thing and therefore they are unlikely to notice any change.

However, this two-tiered approach to stronger compliance and stronger guidelines will remove the incentive for the significant minority clearly in it for the wrong reasons, whilst also continuing to repair Labor’s Budget mess.

This stronger action will also ensure the Abbott Government’s $28.5 billion investment in child care fee assistance payments over the next four years delivers a maximum return in terms of making child care more affordable, flexible and accessible, as well as boosting workforce participation.

It is important to note that many parents are unaware services are using them to make excessive claims as JETCCFA recipients generally only pay a 50 cent per child per hour co-contribution.

I therefore encourage parents receiving JETCCFA to check their statements closely to ensure services are not making bogus claims on their behalf.

Parents and services can report any suspect activities to Department of Education on 1800 664 231 or at tipoffline@education.gov.au.

The draft Productivity Commission Inquiry report into making child care more affordable, flexible and accessible is due this month and includes a specific term of reference looking at payments made to parents.

For more information

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