23 June 2015
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Social Policy Section
This Quick Guide provides an overview of
Australia’s formal child care system–that is, regulated child care away from
the child’s home. The Guide outlines key features of the regulatory framework,
approval requirements for a service and describes the funding role of the
Australian Government. It includes statistics relevant to the types, usage and
costs of formal child care, as well as quality standards.
The Australian Bureau of Statistics estimates that, at 30 June
2014, there were 3.8
million children aged 0–12 years in Australia. Nearly one-quarter of these
children (919,400) usually attended formal child care, with the early childhood
education and care (ECEC) sector providing families with the following choice of services:
Long Day Care (LDC)—a centre-based form of ECEC that caters for
children aged 0–6 years
Family Day Care (FDC)—a flexible form of ECEC (all-day,
part-time, casual, overnight, before/after school and school holiday care) that
is provided in the private home of carers (who are now referred to in the ECEC
sector as educators)
In-Home Care(IHC)—a flexible form of ECEC (all-day, part-time,
casual, overnight, before/after school and school holiday care) provided to
eligible children by an educator in the family home
Outside School Hours Care (OSHC)—a centre-based form of ECEC for primary
school aged children (6–12 years) and available before and after school
(7.30am–9.00am, 3.00pm–6.00pm), during school holidays and on pupil-free days
Occasional Care–a flexible form of centre-based ECEC that can be
accessed on a regular basis (like LDC) or as the need arises–for example, when
parents have irregular or unpredictable work hours
For children aged 0–6 years, the main source of formal
child care in 2011 was LDC, with 45 per cent of children aged 2–3 years
accessing this type of service. For school-aged children, OSHC was the main
source of formal care, with 13 per cent to 17 per cent of children aged 5–9
years accessing care before and after school.
Quality Framework Quarterly Snapshot Q1 2015 reports that, at 31 March
2015, there were 14,827 approved ECEC services operating throughout Australia
of which 13,908 were centre-based services (including LDC and OSHC services)
and 919 were FDC services. Approved services are those which meet eligibility requirements
for the purposes of the Australian Government’s Child Care Benefit payment (see
below). Most LDC, FDC and OSHC services operate under the National Quality
National Quality Framework
In July 2009, the Council of Australian Governments endorsed
in the Early Years–A National Early Childhood Development Strategy. The
strategy aims to ensure that ‘by 2020 all children have the best start in life
to create a better future for themselves, and for the nation’. To achieve this
vision, federal, state and territory governments committed to a suite of
interrelated national partnerships and national initiatives.
Partnership Agreement on the National Quality Agenda for ECEC (NQAECE) was
the first major tranche of reform. It established an integrated and unified
national system for ECEC and OSHC, which is jointly governed and which drives
continuous improvement in the quality of services—the NQF.
Key features of the NQF
The key features of the NQF are:
the Australian Children’s
Education and Care Quality Authority (ACECQA), a national body, with
federal, state and territory governance arrangements, that is responsible for
guiding the implementation and management of the national system
Quality Standard (NQS), a national benchmark for the provision of quality
services across seven areas, including an approved learning framework that
guides the development of quality early childhood programs (for example, Belonging,
Being and Becoming: The Early Years Learning Framework for Australia)
- a national quality rating system that combines the seven quality
areas with a five-point
rating scale, to describe the quality of care in individual services across
and Care Services National Law (National Law) and the Education
and Care Services National Regulations (Regulations), a national
system for the regulation and enforcement of the NQS, which is legislated in
each jurisdiction and administered by state and territory regulatory
authorities (such as Victoria’s Department of Education and
Training) under the guidance of ACECQA.
National Quality Standard
The NQS combines process and structural components of
quality. The process components include the assessment and rating system. The
structural components include matters such as educator-to‑child ratios
and educator qualifications.
Assessments and ratings
Regulatory authorities began assessing and rating services against
the NQS in August 2012. ACECQA reports
that, at 31 March 2015, 56 per cent of services have been quality rated. Services
are rated for each of the seven quality areas—which include associated
standards and elements—and are given an overall rating. Nationally, 66 per cent
of the quality rated services were ‘Meeting’ or ‘Exceeding’ the NQS, and 33 services
received the highest rating—‘Excellent’—that can only be awarded on application
to ACECQA after the regulatory authority has rated the service. Services are
required to display their ratings which are also published in ACECQA’s national registers and
through the Australian Government’s MyChild
website (an online information portal).
LDC and FDC services have mandatory minimum educator-to-child
ratios. For LDC services, the ratios are: 1:4 for children aged 0–24 months;
1:5 for children aged 24–36 months; and 1:11 for children aged 36 months to
preschool age. There is no national ratio for children over preschool age,
although some jurisdictions have specific requirements. The educator-to-child
ratios were phased in from 1 January 2012, with all jurisdictions to be fully
compliant on 1 January 2016. Those jurisdictions with existing lower
ratios will retain those ratios. For FDC services, an educator cannot care
for more than seven children at any one time and no more than four of these
children can be preschool age or under.
LDC and FDC services also have qualification
requirements. For LDC services, the requirements are based on the number of
children in care, with half the educators required to have, or be actively
working toward, an approved diploma level ECEC qualification. All other
educators, and FDC educators, must have, or be actively working toward, an
approved certificate III level ECEC qualification. Early childhood teachers are
required to attend LDCs for a set number of hours each day. Educators can check online how
their qualifications will be regarded for the purposes of the NQS.
Early Years Workforce Strategy
Years Workforce Strategy is a national initiative that aims to develop and support
the ECEC workforce. An identified priority is to increase the
qualification levels of educators. The Australian Government supports certain
ECEC teachers through HECS-HELP
Benefit (a reduction in the compulsory repayment included in an income tax
notice of assessment, to be discontinued from 1 July 2015) and ECEC educators
through the removal
of regulated TAFE fees for related advanced diploma and diploma courses.
Day Care Professional Development Programme provides funding to LDC
services to assist with training and skills development. The 2013
National ECEC Workforce Census found that, in 2013, 82 per cent of paid
contact staff had an ECEC related qualification (16 per cent bachelor degree, 28.4
per cent advanced diploma/diploma, 36.2 per cent certificate III/IV, and 1.5
per cent below certificate III).
Operation of child care services
A person or an entity operating a LDC, FDC or OSHC must hold
a provider approval and a service approval issued by the regulatory authority. A
service approval is granted subject to conditions—the service must, for
ensure the safety, health and wellbeing of the children
meet the educational and developmental needs of the children and
comply with any conditions prescribed by the National Law or in
the Regulations, or by the regulatory authority.
A service must also be approved under section 195 of the A
New Tax System (Family Assistance) (Administration Act) 1999 (Act) to
receive Child Care Benefit (CCB) payments from the Australian Government (CCB
approved service). CCB approval is also subject to conditions, including that
the service comply with obligations set out in the Act, the A New Tax System (Family
Assistance) Act 1999 and various disallowable instruments
(collectively, the family assistance law). The key conditions relate
to compliance with applicable federal, state and territory laws (such as the
National Law), the retention and reporting of information, and fee charges. CCB approved
services might also have obligations under individually negotiated funding
Child care services must be open to the general community,
although services can cater to specific groups. Extra support is available from
the Australian Government to support the inclusion of children with additional
needs. If a service has no vacancies it may use a waiting list to help
determine the next placement. Where demand for placements exceeds supply, most
CCB approved child care services must allocate places in accordance with the Priority
of Access Guidelines. These guidelines set out three levels of priority:
first, a child at risk of serious abuse or neglect
second, a child whose parent, or parents, satisfies the
work/training/study test set out in the Act and
third, any other child
within each category within which there is further
prioritisation. In some circumstances, a child who is enrolled at a child care
service could be required to surrender their placement.
Child care funding
Australian, state and territory governments share
responsibility for ECEC funding. According to the Report
on Government Services 2015 (ROGS), in 2013–14, total government expenditure
was an estimated $7.7 billion—an increase of 12.5 per cent in real terms from
2012–13—of which $6.2 billion (80.9 per cent) was contributed by the Australian
Government. The Australian Government’s key child care responsibilities are
fiscal and include:
financial assistance to eligible families to help with the costs
of child care
operational and capital funding to certain child care providers,
and to support the provision of quality care and
funding for state and territory governments through national
State and territory governments’ child care responsibilities
vary but can include, for example:
providing a legislative framework for the registration, licencing
and approval of ECEC services that operate within the NQF
licencing, approval, monitoring and quality assessment of
services in accordance with the NQF and any other requirement specific to the
providing operational and capital funding to non-government
delivery of services
providing information, support, training and development
opportunities for providers and
providing curriculum and policy support and advice, as well as
training and development for management and staff.
The Productivity Commission (PC) has reported
recently that child care fee assistance represents the bulk of Australian
Government funding for ECEC (about 87 per cent in 2014–15). There are three types
of payment for which families can apply through the Department
of Human Services (Centrelink):
Child care services report weekly attendance for each child
in care and that information, together with family eligibility information, is
used to calculate any fee assistance. The Department of Social Services can pay
any fee assistance to services directly (and the fees charged to families are
reduced accordingly) or families may elect to receive the payments direct to
their own bank account.
Out-of-pocket costs for families vary according to many
factors—for example, the type of care used, the number of children in care and
family income—but the PC reports
that, for 95 per cent of children in care, the Australian Government subsidises
at least 50 per cent of fees. In 2014, the median
weekly cost for 50 hours of care in a CCB approved service was $385 for LDC
and $375 for FDC (ROGS, p. 3.45). The 2015–16
Budget anticipates that the Australian Government will spend $7.27 billion
in fee subsidies in 2015–16 and $7.97 billion in 2016–17.
Provider and quality support
The Australian Government also administers the Child
Care Services Support Programme (CCSSP) that contains a number of components,
Support Programme for the establishment or maintenance of child care services
in areas where the services might not otherwise be viable or able to meet the
unique requirements of the community (such as disadvantaged, regional and
Based Funded Programme which contributes toward the operational costs of a
limited number (310) of child care services in approved locations (mostly
regional, remote and Indigenous communities) and
and Professional Support Program that provides professional development,
advice, access to additional resources, and inclusion support for childcare services
The CCSSP also encompasses the triennial Australian Early Development Census, which
measures children’s development upon school commencement, the Home
Interaction Program for Parents and Youngsters (HIPPY), a two year home-based
parenting and early childhood program, and the Child
Care Payments Compliance program that protects the integrity of child care
payments and promotes compliance with the family assistance law. In
total, the CCSSP has been allocated $341.6 million in funding for 2015–16.
National partnership agreements
The two key national partnership agreements are the NQAECEC
(discussed earlier) and the National
Partnership Agreement on Universal Access to Early Childhood Education (UAECE).
The Australian Government has committed $61 million to support the NQAECEC to
30 June 2018 and $843 million to support the UAECE in 2016 and 2017. Funding
has also been provided to support the National
Occasional Care Programme ($12.6 million, 2014–18) and the Early
Learning Languages Australia trial ($9.8 million, 2015).
The UAECE aims to improve early childhood outcomes through
provision of universal access to a preschool program in the year before full‑time
school, with a focus on improving the participation of vulnerable and
disadvantaged children. The program is to be delivered by a degree qualified
early childhood teacher for 600 hours a year, per child. ROGS states that, in 2013,
41.5 per cent of children aged 4–5 years were enrolled in a preschool program
delivered in a LDC service. Over 30 per cent of these children were enrolled and
attended for more than 15 hours each week.
For more information on the UAECE, see M Harrington, ‘Universal
access to early childhood education: a quick guide’ and the Department
of Education website.
of Social Services is responsible for child care policies and programs, and
co-ordination of early childhood development policy.
Advisory Council for Child Care and Early Learning provides a forum for the
consideration of ECEC strategic policies and for consultation with the child care
sector. The Stakeholder Reference Group for Child Care and Early Learning provides
input on the practical implications of policies and programs.
The Productivity Commission’s annual ROGS
provides an overview of ECEC in Australia, key statistics and funding information.
ACECQA’s quarterly NQF
Snapshot provides information and
analysis on the ECEC sector, and an update on child care services’ assessments,
ratings and waivers.
The Australian Bureau of Statistics manages the National Early
Childhood Education and Care Collection, which provides nationally
comparable ECEC data, and the triennial Childhood Education
and Care Survey that provides a range of information such as usual care
arrangements and child care costs.
In 2013–14, the Productivity Commission conducted an inquiry
into Childcare and Early Childhood Learning, with the final report
released on 20 February 2015. In the 2015–16 Budget, the Australian Government
delivered its response via a Families
Package, which outlines major funding reforms for child care in Australia. Legislation
will be necessary to implement the reform, which includes:
replacement of the three family payments with a single means
tested Child Care Subsidy and
establishment of a non-mainstream Child Care Safety Net for
disadvantaged and vulnerable children.
Other major reviews that could affect child care policies
and programs include the 2014–15
Review of the National Partnership Agreement on the NQAECEC and the White Paper on the Reform of the
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