Key points
- The Education Legislation Amendment (Integrity and Other Measures) Bill 2025 (the Bill) amends:
- The ESOS Act amendments replicate most of those in the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (the ESOS Bill), with some changes, most notably removing measures to limit international student enrolments. Amendments to the ESOS Act in the Bill include:
- providing Ministerial power to suspend provider registration and cancel courses
- stricter regulations and requirements in relation to education agents and commissions, and the provision of higher education to overseas students.
- No information has been provided as to the number of people affected by the potentially unlawful CCS determinations, some of whom will have been underpaid.
- At the time of writing, the Bill had not been referred to or reported on by any parliamentary committees.
Introductory Info
Date of introduction: 9 October 2025
House introduced in: House of Representatives
Portfolio: Education
Commencement: The day after Royal Assent
Purpose of the Bill
The purpose of the Education Legislation Amendment (Integrity and Other Measures) Bill 2025 (the Bill) is to:
The Bill also amends the A New Tax System (Family Assistance) (Administration) Act 1999 (FAA Act) to:
- provide the Secretary of the Department of Education with new powers to compel information from certain early childhood education and care (ECEC) providers to support the Early Education Service Delivery Prices Project (SDP Project)
- expand the scope for the use and disclosure of protected information collected under the FAA Act
- align legislative provisions for determining the date of effect for some Child Care Subsidy (CCS) entitlement decisions with how the CCS ICT system (CCS system) has been determining the date of effect; and retrospectively validate potentially unlawful date of effect determinations from July 2018
- allow the CCS system to make automated decisions to cease an individual’s CCS eligibility where they have not met reconciliation conditions by the end of the second financial year following the financial year CCS was received
- make minor technical amendments.
Structure of the Bill
The Bill comprises 2 Schedules. Schedule 1 is divided into 10 parts. Parts 1–8 relate to the provision of education to overseas students; Part 9 relates to the offshore delivery of higher education courses; and Part 10 relates to medical places for Indigenous students. Schedule 2 is divided into 4 parts. Part 1 relates to information gathering powers for the SDP Project; Part 2 relates to protected information on approved child care providers; Part 3 includes technical amendments; and Part 4 provides for the CCS date of effect amendments.
Background
The international education sector
Legislation in the previous Parliament
Parts 1–7 of Schedule 1 of the Bill replicate, with some changes, Parts 1–6 and Part 8 of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (the ESOS Bill). However, the Bill does not include Part 7 of the ESOS Bill, which was the most contentious and allowed for the Minister, via legislative instrument and with the agreement of the Minister responsible for Vocational Education and Training (VET) to limit the enrolments of overseas students by provider, course or location, over a year. The ESOS Bill lapsed at the end of the previous Parliament. Information on the international education sector below draws from the ESOS Bills Digest. For more on international student limits please refer to the Department of Education’s webpage on ‘A managed system for international education’.
The ESOS Framework
The Australian Government regulates international education through the ESOS Act and related legislation, together referred to as the ESOS Framework.
Under the ESOS Act, education providers in all sectors (including higher education, English Language Intensive Courses for Overseas Students (ELICOS), VET and schooling) must be registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) if they deliver education to students in Australia on a student visa (ESOS Act, sections 8 and 14A).
ESOS agencies
CRICOS registration is handled by ESOS Agencies (ESOS Act, section 6C). A provider’s ESOS Agency depends on its sector:
The Department is also responsible for a range of system-wide functions, such as providing education and information about the ESOS Framework, and managing CRICOS.
Education agents
Education agents advise and assist students choosing between potential countries, institutions and courses. Students are not required to use an education agent, however, the 2023 Quality Indicators for Learning and Teaching survey results for international students found 86.5% of overseas students reported using an education agent to help with their visa application or enrolment in Australia (p. 59).
Education agents are not directly regulated in Australia. Rather, ESOS agencies such as AQSA and TEQSA monitor CRICOS providers to ensure compliance with the ESOS Framework.
2024 Draft International Education and Skills Strategic Framework and earlier reviews
In its announcement of the ESOS Bill, the Government also released Australia's International Education and Skills Strategic Framework: draft for consultation (Strategic Framework). This framework built upon several reviews and strategies, including:
More detail on relevant recommendations from these reports and strategies can be found in the ESOS Bills Digest.
The Strategic Framework signposted some of the intended changes in the Bill (pp. 9–10) and was to be finalised in 2024 (p. 37) following consultation, but has not yet been released.
According to the Strategic Framework, measures to expand and strengthen the ‘fit and proper’ test for providers (Parts 1 and 6 of Schedule 1 ) will prevent ‘collusion between education agents and providers’ and protect ‘vulnerable international students from exploitation and coercion’ (p. 10). The Migration Strategy had previously signalled the Government’s intention to change the test in relation to VET providers (p. 64).
Both the Strategic Framework and earlier reviews had made recommendations around education agents. The Nixon Review called for direct regulation (pp. 16–17) and in its response, the Government agreed to consider boosting data sharing activities and further measures to deter collusion between providers and education agents (p. 4) (see also Recommendations 13 and 26 of JSCFADT Interim Report).
In conjunction with Part 1 of Schedule 1, Part 2 increases the requirements for reporting and sharing information about education agents between providers and ESOS agencies. The Bill allows the Secretary to obtain and share information on education agents, fulfilling an objective in the Strategic Framework (p. 13).
Part 1 of Schedule 1 inserts a definition of ‘education agent commission’ which, in his second reading speech, Minister Jason Clare notes will allow for ‘complementary amendments’ to the National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code), ‘to ban commissions from being paid to education agents for onshore student transfers.’ (p. 3). This action would fulfill proposals in the Strategic Framework, as recommended by the Nixon Review (pp. 10, 40).
Allowing the Minister to pause applications for registration of new providers and new courses (Part 3 of Schedule 1) is said by the Strategic Framework to ‘support changes outlined in the Migration Strategy’ (p. 10) (see also JSCFADT Interim Report, Recommendation 14, pp. xxii–xxiii).
In relation to the requirement that providers seeking registration must have delivered courses to domestic students for at least 24 months (Part 4 of Schedule 1) (the JSCFADT Interim Report had recommended 12 months for VET providers in Recommendation 14), the Strategic Framework argues:
This demonstrates their commitment to quality education and closes a loophole for those providers seeking to solely target international students, often of a single nationality for profit and potentially to channel them into employment rather than study. (p. 10)
The Strategic Framework also ties this commitment to the process of cancelling a provider’s registration (Part 5 of Schedule 1) if a provider has not delivered a course to international students for a period of 12 months (p. 10).
Regulatory intervention powers, as found in Parts 6 and 7 of Schedule 1, are flagged in the Strategic Framework as follows:
Legislative changes will provide Government with the power to prevent providers from delivering courses which have significant quality and integrity issues, or which have limited value to Australia’s skills needs. (p. 10)
These also reflect components of Recommendations in the JSCFADT Interim Report in relation to VET.
ESOS Bill Committee Reports
The Bill had not been referred to a parliamentary committee for inquiry at time of writing. However, the ESOS Bill was considered by parliamentary committees.
Part 3 of Schedule 1 contains provisions included in the ESOS Bill that were queried by the Senate Standing Committee for the Scrutiny of Bills. The Committee asked the Minister’s advice on whether proposed sections 14C, 14D, 14E, and 14F in the ESOS Bill (replicated in Part 3 in Schedule 1) could omit those clauses that allowed the respective legislative instruments to not be subject to disallowance. The Minister advised that doing so ‘may cause uncertainty for the operations and functions of ESOS agencies, and providers.’ (p. 59). However, the Committee asserted that exemption from disallowance should only apply in exceptional circumstances and should be subject to ‘rigorous scrutiny’. In this instance, the Committee did not consider ‘the need for certainty in this context to be an indication of exceptional circumstances that warrant an exemption from disallowance.’ (p. 59)
The Senate Education and Employment Legislation Committee report on the ESOS Bill recommended that the Bill be passed. For additional comments and dissenting views, please see the ‘Policy position of non-government parties/independents’ section.
TEQSA regulation of offshore education provision
The Bill also comes in the context of the Australian Universities Accord, which conducted a 12 month review of the higher education sector and released the Australian Universities Accord: final report (Accord Report) in February 2024.
The Bill’s Explanatory Memorandum (EM) refers to the Accord Report’s ‘recognition of TEQSA’s role in strengthening quality and accountability in the sector’ (p. 2) in justifying the proposed amendments to the TEQSA Act that would require TEQSA’s authorisation for providers to deliver courses offshore.
On 3 September 2025, the Government released a consultation paper about future regulation and potential changes to the TEQSA Act. Responses closed on 17 October 2025.
It has also been reported that TEQSA is due to release an update to the Transnational Education toolkit, originally released in 2022. The toolkit provides guidance on third-party offshore delivery of Australian higher education awards.
Indigenous demand-driven funding for medicine places
In August 2023, the Government introduced legislation that expanded eligibility for Commonwealth Supported Places (CSPs) in demand-driven higher education courses to all Indigenous students (rather than only Indigenous students living in regional and remote areas). However, the changes did not apply to medicine, the sole ‘designated higher education course’ (HESA, section 30–12 and paragraph 30–10(1)(a)). See the Parliamentary Library’s FlagPost, Australian Government funding for university medical places.
Recommendation 3(b) of the Accord Report called to ‘provide places for all First Nations students who apply and meet the entry requirements for a medical degree.’ (p. 17) The Government announced its commitment to uncap these places in the 2025–26 Budget (p. 56). Part 10 of Schedule 1 to the Bill will amend HESA to broaden the definition of ‘demand driven higher education course’ to include a ‘course of study in medicine’.
Policy position of non-government parties/independents
So far, non-government parties and independents have not issued commentary on the Bill.
ESOS provisions
Some of the Coalition Senators' additional comments in the Senate Education and Employment Legislation Committee report on the ESOS Bill 2024 (ESOS Bill Committee Report) remain relevant to the Bill:
- noting stakeholder concerns about the ‘breadth’ of the new definition of education agent, but also calling for the Government to regulate offshore and onshore education agents as recommended by the Nixon Review (pp. 74–75)
- questioning the lack of requirements for the Minister to consult with providers or give rights of appeal in relation to decisions (p. 76)
- noting stakeholder concerns that the Ministerial powers to specify a limitation on the registration of new providers for up to a 12-month period as precluding the entry of new providers to the market (p. 76)
The Greens’ dissenting report called for Part 8 (Part 7 of Schedule 1, with changes, in the Bill), ‘Automatic suspension of specified courses’, to be removed (p. 79). As with Senator David Pocock's additional comments (p. 95), they criticised the ESOS Bill as containing overreach of Ministerial powers (p. 85). Senator Pocock also pointed to stakeholder concerns at regulatory burden on high-quality providers (perhaps why Table A providers are now exempt from some measures in the Bill) (p. 95).
A number of non-government amendments were proposed to the ESOS Bill, with some relating to provisions appearing in the current Bill.
Position of major interest groups
ESOS provisions
Most commentary on the ESOS Bill 2024 focused on the capping of international student enrolments (pp. 15-16). However, the ESOS Bill Committee Report also provides an overview of reactions to components included in the Bill. See Chapter 2 - Key issues sections:
Some media reporting has highlighted key stakeholder concerns over remaining measures from the ESOS Bill that appear in the current Bill, such as:
- the definitions and measures relating to education agents and commissions being too broad and onerous, potentially punishing legitimate activities (see also reporting on stakeholder claims that it may push poaching underground).
- the requirement for new providers to deliver courses exclusively to domestic students before registering to deliver to overseas students disadvantaging independent higher education providers.
The Independent Tertiary Education Council Australia commended some of the changes made since the ESOS Bill, but reiterated concerns about the impact of some of the regulatory measures.
Indigenous medical places provisions
Universities Australia and the Group of Eight welcomed the measure to remove caps on Commonwealth Supported Places for Indigenous medical students. However, higher education expert Andrew Norton questioned whether the measures will result in enrolment increases given ‘difficulties in finding potential students who meet the entry requirements and are not being set up to fail.’ He noted that the transition may result in fewer allocated medical places being filled.
Key issues and provisions
New ESOS ministerial powers
This section covers Parts 3 and 7 of Schedule 1 of the Bill, which relate to increased ministerial powers to intervene in the ESOS sector, particularly through legislative instruments. The power in the ESOS Bill for the Minister to set international student enrolment limits is not included in the current Bill.
Part 7: Automatic cancellation of specified courses
Part 7 inserts proposed Division 1AB—Automatic suspension and cancellation of courses specified by the Minister into Part 6 of the ESOS Act, which contains provisions for the Minister to suspend and cancel one or more classes of courses.
Unlike the ESOS Bill, the provisions in the Bill that suspend and cancel courses specified in a legislative instrument exempt Table A universities (proposed paragraphs 96C(1)(a), 96D(1)(a) and 96E(1)(a)).
Proposed subsection 96B(1) provides that the Minister may specify courses for suspension and cancellation by legislative instrument if satisfied:
(a) there are or have been systemic issues in relation to the standard of delivery of the courses included in the class; or
(b) the courses included in the class provide limited value to Australia’s current, emerging and future skills and training needs and priorities; or
(c) it is in the public interest to do so.
Proposed subsection 96B(2) provides for considerations that the Minister may have regard to in making the legislative instrument, including whether the provider is in breach of certain legislative provisions or policies, or whether courses have high transfer rates or low completion rates. The Minister is not limited to the considerations outlined in the Bill (proposed subsection 96B(3). The Explanatory Memorandum (EM) notes further circumstances, such as in relation to the quality and purpose of certain courses, or courses being delivered exclusively to overseas students (excluding ELICOS courses and Foundation programs) (p. 60).[1]
In the ESOS Bill, the Minister had to consult with the ESOS agencies before making an instrument and where relevant to VET, seek the written agreement of the Minister responsible for the National Vocational Education and Training Regulator Act 2011 (NVETR Act) (ESOS Bill proposed subsections 96B(6) and (7)). In the Bill, the requirement to consult with ESOS agencies is removed: the Minister must only consult with those persons or entities they consider appropriate, from among those (if any) specified in a legislative instrument (proposed subsections 96B(6)–(8)).
Unlike the ESOS Bill, the Bill also contains provisions that mean that any application to register, renew or add to the provider’s registration of a course specified in a legislative instrument made under proposed subsection 96B(1), is invalid: ‘taken not to have been made’ (proposed section 96C).
If a course is included in a class of courses specified in a legislative instrument made under proposed subsection 96B(1), the course’s registration receives automatic suspension if, 30 days after the legislative instrument commences, one or more students are enrolled in and have commenced the course (proposed subsection 96D(1)). Providers with a course under suspension cannot undertake recruitment or admission processes for the course (proposed subsection 96D(3)). If no students are enrolled in and have commenced the course 30 days after the instrument commences, including if the course has been under suspension but the students have since completed or withdrawn, the course is automatically cancelled (proposed section 96E).
Suspension and cancellation of a provider’s registration of a course apply to all locations (proposed subsections 96D(2) and 96E(3)).
Proposed subsection 176E allows for circumstances under which the Commonwealth would be liable to pay compensation. The EM notes:
a provider would have to successfully argue that the automatic suspension and cancellation … had such an effect on its existing property (e.g. rights under contracts with students) that it amounted to an acquisition of that property for the purposes of the Constitution, and that, in all the circumstances, the acquisition of that property was not on just terms. (p. 65)
Part 3: Management of provider applications
The Ministerial powers in Part 3 of Schedule 1 to the Bill contain some similarities to those introduced in 2024 to the NVETR Act 2011, which allowed the Minister to suspend initial applications for registration in the VET sector.[2]
Part 3 inserts Division 5—Suspension of applications for registration into Part 2 of the ESOS Act, which contains provisions for the Minister to, by legislative instrument, suspend:
- the processing of applications for registration
- the processing of applications to add courses to registration
- the making of applications for registration
- the making of applications to add courses to registration.
Section 9 of the ESOS Act allows for providers to apply to their ESOS agency ‘to be registered to provide a course or courses at a location or locations to overseas students.’ Section 10H allows for registered providers to apply to their respective ESOS agency to add further courses to their registration.
Proposed sections 14C and 14D allow the Minister to, by legislative instrument, suspend ESOS agencies from processing applications for registration, and from processing applications to add courses to a provider’s registration. The Minister can either determine that ESOS agencies are ‘not required’ to deal with the specified applications – leaving the ESOS agencies the discretion to decide – or ‘must not’ deal with the specified applications (proposed subsections 14C(1) and (3) and 14D(1) and (3)).
The legislative instrument must specify the beginning and end day to which it applies, and not exceed 12 months. But it can include applications made before or after the commencement of the instrument or the provisions in the Bill (proposed subsections 14C(6) and 14D(6)), which the EM explains is to ensure applications are not treated inconsistently owing to the date when they were made, which could be abused by non-genuine providers (p. 42).
The legislative instrument applies to any ‘processing activity’ which is defined broadly to essentially cover any activities in relation to the ESOS Act (item 23 of Schedule 1). It can apply to all provider registration and additional course applications, or classes of applications (proposed paragraphs 14C(6)(a) and 14D(6)(a)).
Proposed sections 14E and 14F allow the Minister to suspend, by legislative instrument, the making of applications for registration as a provider, and the making of applications to add courses to a registration. Like proposed sections 14C and 14D, the period of suspension must be no longer than 12 months, and there is an ability to express the suspension in relation to classes of applications.
Legislative instruments made under sections 14C through 14F are not subject to disallowance. According to the EM, this is to avoid creating uncertainty for the operations and functions of ESOS agencies, and for providers, were the instrument to be disallowed after having commenced (pp. 37–38, 44; see also the ESOS Bill Committee Reports section above).
Before making a legislative instrument under proposed Division 5, the Minister must consult with each of the ESOS agencies. However, in contrast to the ESOS Bill 2024, proposed subsection 14G(2)) confirms that failure to consult will not invalidate a respective legislative instrument. The Minister must gain the written agreement of the Minister who administers the NVETR Act if applicable (proposed subsection 14G(3)).
Other ESOS provisions
Increased regulation
Parts 1, 2, 4, 5 and 6 of Schedule 1 to the Bill contain provisions which address integrity concerns raised in the various reviews covered in the background.
Parts 1 and 2: Education agents
Parts 1 and 2 contain provisions that address the ways in which providers relate to, report on and are given information about education agents.
Provider and education agent relationships
Item 3 inserts a definition of ‘education agent’ based on activity rather than relationship to a provider. The EM explains that there is not always a formal agreement for the latter (pp. 22–23). These activities are recruiting; providing information, advice or assistance; or ‘otherwise dealing with’; overseas students or intending overseas students. The definition excludes permanent employees of the provider.
Item 3 also inserts a definition of ‘education agent commission’, which means any monetary or non-monetary benefit provided to an education agent by a provider in connection with the activities mentioned above. As noted in the background, this definition is intended to lead to amendments to the National Code to ban education agent commissions for onshore student transfers.
Item 4 inserts two additional factors that ESOS agencies must have regard to when deciding whether a provider or registered provider is fit and proper. These factors involve the relationship of ownership or control between providers (and their associates) and education agents (and their associates) (proposed subparagraphs 7A(2)(gaa) and (gab)). Item 5 inserts a provision requiring providers to notify their ESOS agency when there is a new relationship or change in an existing relationship of ownership or control between a provider (or an associate) and an education agent (or an associate) (proposed subsection 17A(4A)).
Proposed section 21B (at item 9) gives the Secretary the power to request information from registered providers about commissions given by or on behalf of the provider to education agents in connection to their recruitment of accepted students. This information can include monetary amounts, the value and description of non-monetary benefits, and the number of accepted students recruited by the agent (proposed subsection 21B(3)).
It is an offence of strict liability for a provider to fail to comply with a request, with a maximum penalty of 60 penalty units (proposed subsections 21B(7) and (8)) – reflecting other offence provisions in the ESOS Act in relation to giving information, record keeping and education agents.
Transparency on education agent activities
The provisions in Part 2 will allow the Secretary or the relevant ESOS agency to give more extensive information to providers about education agents.
It inserts an additional purpose for which the Secretary or ESOS agency can give information to registered providers: ‘protecting and enhancing Australia’s reputation for quality education and training services for accepted students’ (proposed paragraph 175(3)(c)). Proposed subsection 175(6) provides for the information to include information relating to the number of provider-to-provider transfers or course-to-course transfers of accepted students that were ‘recruited or otherwise dealt with by an education agent’, or the commissions paid. Item 22 allows the Secretary or the ESOS Agency to give information to providers that may have been gathered prior to the Bill’s commencement.
Parts 4-6: Stricter registration requirements
Course delivery to domestic students
Part 4 inserts provisions that require a provider seeking registration to have first delivered a course to ‘students in Australia other than overseas students’ for consecutive study periods totalling at least 2 years. This requirement allows for a course to be delivered at multiple locations, and for normal study breaks to count towards the 2 years without interrupting the consecutive status (proposed subsections 11(2) and (3)). Proposed paragraph 11(1)(fa) exempts from this requirement ELICOS or Foundation Program providers (who cannot deliver courses to domestic students), Table A providers (who meet the eligibility criteria of the Tertiary Education Quality and Standards Agency Act 2011 to self-accredit courses), and registered providers.
Course delivery without substantial breaks
Part 5 inserts provisions whereby a provider’s registration is automatically cancelled if they have not provided any courses at any location to an overseas student in a period of 12 consecutive months (the measurement period) on or after 1 January 2026. Approved school providers are exempted.
The ESOS agency must give the provider written notice of the cancellation (proposed subsection 92A(3)). Providers can apply for an extension to the measurement period no later than 90 days before it is due to end (proposed subsection 92B(2)). The ESOS agency can grant one or more extensions but only to a maximum total length of 12 months (proposed subsections 92B(5) and (6)).
Part 6 inserts provisions whereby ESOS agencies and designated State authorities, in considering whether a provider is fit and proper to be registered, must take into account whether the provider is under investigation for any offences under:
The Minister will also have the power to specify additional offences via legislative instrument (proposed paragraph 7A(2AA)(d)).
These provisions are to be applied to new applications, existing applications, and already registered providers, regardless of when the conduct constituting the offence under investigation occurred (Item 43).
Part 8: Staying decisions while under internal review
Under the ESOS Act only reviewable decisions (listed in section 169AB) made by a delegate of the ESOS agency are subject to internal review. Under the proposed amendments at Part 8, ESOS agencies can determine to stay a decision while an internal review is underway. These provisions were not in the ESOS Bill 2024.
TEQSA regulation of offshore higher education
Part 9 of the Bill amends the TEQSA Act, giving the agency more regulatory powers and placing more requirements on providers delivering higher education courses offshore – also known as transnational education. Under these changes, registered (and in the case of bullet point one, prospective) higher education providers will be required to:
- apply to TEQSA ‘for authorisation to offer or confer Australian higher education awards for one or more offshore provided Australian courses of study (from 1 July 2026) (proposed subsection 44B(1))
- give notice of substantive changes to their provision of Australian courses of study offshore (proposed subsection 44G(1))
- report to TEQSA on its offshore provision of Australian courses of study by 31 October for the previously completed academic year for that course (proposed subsection 44H(1)).
TEQSA is also granted the authority to impose new conditions on an authorised provider and vary and revoke such conditions (proposed subsection 44J), and to cancel a provider’s authorisation as an authorised offshore provider (subsection 101AA).
Indigenous medical students
Since 2024, under HESA, funding for Indigenous students enrolled in Commonwealth Supported Places is currently demand driven, meaning uncapped. However, designated higher education courses – courses in medicine – are exempted. The Bill removes this exemption.
Item 77 allows the Minister through legislative instrument, to specify those courses that are not covered by the new definition of demand driven higher education course. The EM says this is to allow the Minister to intervene in circumstances where Indigenous students may be financially worse off if enrolled in a Commonwealth Supported Place (p. 86).
Early Education Service Delivery Prices Project
Part 1 of Schedule 2 will provide the Secretary of the Department of Education with new powers to compel information from certain ECEC providers to support the Early Education Service Delivery Prices Project (SDP Project). According to the EM, the Department of Education will, in the first instance, request that providers participate in the SDP Project voluntarily (p. 90).
The SDP Project is intended to gather information on ECEC service delivery costs to inform potential reforms to government funding of ECEC. The Department of Education has engaged Deloitte Access Economics, with a contract valued at almost $7.5 million, to look at key costs involved in delivery safe and quality ECEC including wages, property costs, and utilities as well as additional costs for higher needs cohorts or in certain locations.
In 2022–23, the Australian Competition and Consumer Commission (ACCC) conducted ‘a price inquiry into the market for the supply of childcare services’ (p. 281). The ACCC used both voluntary and compulsory information requests to obtain information from child care providers (p. 282). The ACCC recommended further consideration and consultation to determine an ‘appropriate base for the hourly rate cap and indexing the cap to more closely reflect the input costs relevant to delivery of childcare services’ [(CCS rates are calculated as a percentage of fees charged or the hourly rate cap, whichever is lower)] (p. 9).
Item 4 of Schedule 2 adds new section 203AA to the A New Tax System (Family Assistance) (Administration) Act 1999 (FAA Act) which provides the Secretary of the Department of Education with the power to issue a written notice to a CCS approved provider that is a constitutional corporation requiring it to provide information relating to costs incurred during a period, financial information relating to a period, or which the Secretary reasonably believes is required to achieve the purposes of the SDP Project. Failure to comply with a notice given under this section results in a civil penalty of 60 penalty units. The EM states that most approved providers are constitutional corporations—paragraph 51(xx) of the Constitution refers to: ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’ (p. 91). The Department of Education will seek information from a sample of providers not covered by this proposed section on a voluntary basis (p. 91).
Items 2 and 3 of Schedule 2 amend section 162 of the FAA Act so that the SDP Project may obtain, make a record of, use or disclose protected information.
Child care provider information
Part 2 of Schedule 2 will amend confidentiality provisions in the FAA Act relating to the use, disclosure and publication of protected information. Protected information is information about a person—including legal persons such as child care providers—obtained under family assistance law and held by the Department of Education or Services Australia (p. 93). The intent of the amendments is to broaden the scope for the use and disclosure of ECEC providers’ protected information; and enable protected information to be used for research, statistical analysis and policy development.
Child Care Subsidy date of effect changes
Part 4 of Schedule 2 includes 2 measures:
- aligning the legislative provisions for determining the date of effect for CCS entitlement decisions relating to reconciliation conditions with how the CCS system has been determining the date of effect; and retrospectively validating previous potentially unlawful date of effect determinations
- providing for the CCS system to make automated decisions to cease an individual’s CCS eligibility where they have not met the second deadline for meeting reconciliation conditions.
The CCS reconciliation process occurs at the end of the financial year where a CCS recipient’s previous estimates of their families’ adjusted taxable income is compared with the Australian Taxation Office’s assessment of their taxable income. An individual’s CCS entitlement is calculated based on their actual adjusted taxable income and any CCS underpayments during the year are paid as a lump sum while any overpayments are subject to recovery.
To be considered eligible for CCS, an individual must meet the reconciliation conditions by set deadlines—the conditions include the individual and any partner or ex-partner lodging a tax return or notifying Services Australia of their actual adjusted taxable income (for those not required to lodge a tax return). The first deadline is 1 year after the end of the financial year in which the CCS entitlement was determined. If an individual fails to meet the first deadline, they will not be entitled to any CCS in the financial year after the first deadline until the reconciliations conditions are met. The second deadline is 2 years after the financial year in which the CCS entitlement was determined. If the reconciliation conditions have not been met by the second deadline, then the individual’s CCS eligibility is cancelled, and debt recovery will commence for the subsidy that was paid in the financial year 2 years prior.
According to the EM, the Department of Education’s CCS system has, in some cases, been applying incorrect start dates for 3 types of decisions relating to the CCS reconciliation conditions. This has resulted in discrepancies between the FAA Act and the CCS system of up to 2 weeks meaning individuals have been overpaid or underpaid CCS (pp. 103, 105).
Items 25–34 amend or insert relevant date of effect provisions for CCS and Additional Child Care Subsidy in the FAA Act so that they align with how determinations have been made through the CCS system.
Retrospective application and validation
Items 35 and 36 are retrospective application provisions, applying the amendments made in Part 4 of Schedule 2 from 2 July 2018 (when the Child Care Subsidy was first introduced) and validating all decisions made from 2 July 2018. This means that any decisions made unlawfully will be made lawful. Subitem 36(4) waives any overpayments made as a result of unlawful determinations made prior to commencement.
Item 37 provides that the Commonwealth is liable to pay a reasonable amount of compensation to any person if the Part 4 amendments result ‘in the acquisition of property from a person otherwise than on just terms and the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution’. This affects those who were underpaid because of unlawful determinations prior to commencement. The Bill and EM do not provide any method for assessing the just terms or determining reasonable compensation. Where an affected individual does not agree on the amount of compensation, they can institute court proceedings.
It is unclear if or how affected individuals will be made aware that they were underpaid and can pursue compensation.
No information on how many are affected by unlawful determinations
The EM states:
Given the volume of CCS payments; the relatively short period of time between the date of effect under the Family Assistance Administration Act and the date of effect in the CCS system; and the relatively low maximum amount of an underpayment to an individual; the time and the cost of remediation on a case by case basis was not practical or proportionate to the impact on individuals (p. 107).
No further information has been provided as to the number of individuals affected over the 7 years since July 2018. While the EM suggests that underpayments would be ‘relatively low’, a 2-week loss of CCS entitlement could amount to hundreds of dollars in additional child care fees paid, and much higher for those with multiple children attending child care.