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Ujjval Goble, Founder of Ignite Minds, one of Victoria's leading Family Day Care services is calling on the Morrison Government to re-think its free childcare initiative.
"Childcare has to stay means tested to keep it viable. Families that continue to earn an income should pay a fee proportionate to their income," says Ujjval.
Ignite Minds is an example FDC organisation providing care for 376 children each week forced considering its options in the face of a 65% revenue shortfalll. Ujjval said 'the industry which supports 112 thousand children will be dessimated should the Early Childhood Education and Relief Package pass parliament this week without amendments'. This will leave many families without care when they need it most.
"Under the new announcement up to 15,000 Family Day Care (FDC) educators may have to close as they can't afford to keep their doors open," he adds.
Ujjval said 'Family day care occupancy rates have been much higher than long day care during lockdown due to smaller groups and lower risk.'
The changes announced by the Government will mean many of these educators will have to close, leaving more than seventy thousand families having to find alternative childcare. Ujjval said 'famiies will be forced to rely on grandparents to provide care placing older Australians at greater risk of coronavirus infection.'
Ujjval is calling on the Government to recognise:
- FDC is a fundamentally different model to centre based care and will need a different relief package.
- FDC educators cannot provide a service for a maximum payment $5.55 per child per hour.
- FDC educators must be paid for additional enrolments outside of the reference period to meet demand at this time.
- FDC educators must be paid up to the maximum cap - currently this is $11.10 of which 85% CCS and 15% is family contribution.
- FDC educators must have guaranteed access to the Jobkeeper payment should their income fall below 30%
- Service providers need to have additional continuity funds to cover administration, compliance and support duing this time.
- Service providers must be able to engage educators who did not have sessions of care during the reference period
- Family contributions must remain 'means tested' allowing FDC schemes to charge GAP fees for families that have the means to pay.
- Families must continue to access funding for Temporary financial hardship
It's a very difficult time for everyone and while there needs to be a financial break but the current free policy won't work.
Key Facts from september quarter 2019
Total children in care 1.3 million
Total children in FDC 112 thousand - 8% of total children.
This niche market has seen higher occupancy rates under COVID 19
Total CCS money spent September quarter $2.1 Billion of which $168 million spent on FDC
Total BCF cost ‘recuse package’ breakdown for quarter
$1 Billion BCP of which 80 million will reach FDC-
0.6 Billion of Jobkeeper payment which most FDC not entitled to.
When compared to the already budgeted 2.1 Billion for the next 3 months this is not a rescue package for the sector but a savings measure for government. Now is not the time to be pulling money out of essential services.
Keep childcare means tested. Families that continue to earn an income should pay a fee proportionate to their income.
There are approximately 15,000 Family Day Care educators servicing 78,000 families and 112,360 children across Australia. These educators continue to provide a vital service to Australians despite the COVID19 restrictions. These services have had the rug pulled out from under their feet and are forced to consider the unemployment queues.
On the 1st April Scott Morrison announced that all childcare would be free from Monday 6th April. We understand that 'free childcare' has merit during this time but this must be weighed against the cost of increased unemployment.
We are asking the government to keep the system means tested. 9 out of 10 families have maintained their employment income whilst working from home and have the means to pay. Families that are struggling are entitled to full fee relief under the means tested Temporary Financial Hardship payment. This is an equitable system. Under the new system all families will be free and the educator will suffer.
For example, Mr Morrisons ‘free childcare’ announcement will take up to 77% of inner city Family Day Care Educators income and an average of 65% across the sector. The Business Continuity Payments will cap educator hourly charge to $5.55 minus the FDC admin levy. Ignite Minds admin levy is $2 leaving educators with 3.55 per hour.
Family Day Care has seen increasing enrolments. Families see FDC as safer than long day care as each educator is in contact with an average of 6 families. With capped income it will be impossible for FDC educators to continue to provide this service.
Educators are being told to apply for the Jobkeeper payment of $1500 per fortnight. This will not offset 65% losses. Educators that have worked less than 12 months are not eligible under current guidelines. If eligible, this payment wont be back paid till end of May - how are educators going to pay rent, buy food and feed their families or the children in care?
Childcare workers are on the frontline in this war against COVID19. They are being asked to risk their lives every day to stay open to support the children of essential workers. Why are we taking money from frontline soldiers in this war on COVID19?
Ignite Minds cannot reduce our service fee of $2 per hour. We run a very lean team and have to pay wages for 4 full time staff and 2 1 day per week staff plus pay rent and outgoings. Currently, our income has dropped so that we could not survive without income from our toyshop www.dragonflytoys.com.au which is subsidising and keeping the FDC viable.
If our business is no longer viable we cannot continue to provide this essential service to essential workers.
Please make sure that any child care fees paid by families continue to be means tested. Families that continue to work from home and earn an income should pay a fee proportionate to their income.
Local Ministers have been contacted for comment.
Further comment can be gained from Ujjval Goble, Approved Provider, Ignite Minds Pty Ltd.
Additional data on the sector can be found here: