On 2 December 2015, the Senate referred an inquiry into the provisions
of the Family Assistance Legislation Amendment (Jobs for Families Child Care
Package) Bill 2015 (the Bill) to the Education and Employment Legislation
Committee (the committee) for inquiry and report by 17 March 2016. On 17 March
2016, on the request of a committee member, the committee unanimously agreed to
seek an extension of time to report until 4 April 2016. The Senate granted this
Conduct of the inquiry
Details of the inquiry were made available on the committee's website.
The committee also contacted a number of organisations inviting submissions to
the inquiry. Submissions were received from 143 individuals and organisations,
as detailed in Appendix 1.
A public hearing was held in Canberra on 4 March 2016. A list of
witnesses can be found in Appendix 2.
The Bill forms part of the government's Jobs for Families Child Care
Package as included in the 2015-16 Budget. The aim of the Bill is to support
improved affordability, accessibility and flexibility of child care for
families and thus encourage greater engagement from families with the paid
The Bill's main provisions include the introduction of a new Child Care
Subsidy (CCS), replacing the current Child Care Benefit and Child Care Rebate,
and changes to the requirements of approved child care providers.
The government's Jobs for Families Child Care Package as a whole is a
response to the Productivity Commission's report Childcare and Early
Childhood Learning, which was commissioned in November 2013 and reported in
The Productivity Commission's inquiry terms of reference were:
- The contribution that access to affordable, high quality
child care can make to:
- increased participation in the workforce, particularly
- optimising children's learning and development.
- The current and future need for child care in Australia,
including consideration of the following:
- hours parents work or study, or wish to work or study;
- the particular needs of rural, regional and remote
parents, as well as shift workers;
- accessibility of affordable care;
- types of child care available including but not limited
to: long day care, family day care, in home care including nannies and au
pairs, mobile care, occasional care, and outside school hours care;
- the role and potential for employer provided child care;
- usual hours of operation of each type of care;
- the out of pocket cost of child care to families;
- rebates and subsidies available for each type of care;
- the capacity of the existing child care system to ensure
children are transitioning from child care to school with a satisfactory level
of school preparedness;
- opportunities to improve connections and transitions
across early childhood services (including between child care and
- the needs of vulnerable or at risk children;
- interactions with relevant Australian Government policies
- Whether there are any specific models of care that should
be considered for trial or implementation in Australia, with consideration
given to international models, such as the home based care model in New Zealand
and models that specifically target vulnerable or at risk children and their
- Options for enhancing the choices available to Australian
families as to how they receive child care support, so that this can occur in
the manner most suitable to their individual family circumstances. Mechanisms
to be considered include subsidies, rebates and tax deductions, to improve the
accessibility, flexibility and affordability of child care for families facing
diverse individual circumstances.
- The benefits and other impacts of regulatory changes in
child care over the past decade, including the implementation of the National
Quality Framework (NQF) in States and Territories, with specific consideration
given to compliance costs, taking into account the Government's planned work
with States and Territories to streamline the NQF.
- In making any recommendations for future Australian
Government policy settings, the Commission will consider options within current
The Bill therefore addresses the following priorities identified by the
Productivity Commission's report:
simplifying and streamlining a complex system that is
difficult to understand;
improving affordability for parents, including taking steps
to constrain fee growth;
improving accessibility and flexibility;
better targeting assistance for vulnerable children and
reducing regulatory burden through improved data/information
sharing and IT systems.
Overview of the Bill
The Bill is comprised of four schedules:
Schedule 1 – Main amendments;
Schedule 2 – Contingent and consequential amendments;
Schedule 3 – Other amendments; and
Schedule 4 – Application, saving and transitional provisions.
Schedule 1 – Main amendments
The main amendments of this Bill will amend the A New Tax System
(Family Assistance) Act 1999 and the A New Tax System (Family
Assistance) (Administration) Act 1999 to have the effect of:
ceasing the Child Care Benefit (CCB) and Child Care Rebate (CCR);
introducing, from 1 July 2017, a new Child Care Subsidy (CCS),
which is subject to both an income and activity test;
introducing various rates of Additional Child Care Subsidy (ACCS)
that are available to individuals (and in one case, child care providers) in
various circumstances; and
making other amendments to deal with CCS and ACCS claims, reviews
of decisions, provider approvals and compliance obligations of approved
providers of child care services.
Schedule 2 – Contingent and
Item 1 amends a provision in section 6 of the A New Tax System
(Family Assistance) Act 1999 regarding immunisation requirements. This item
is contingent on the passage of the Social Services Legislation Amendment
(Family Payments Structural Reform and Participation Measures) Bill 2015
because that Bill also proposes amendments to that provision of the A New
Tax System (Family Assistance) Act 1999.
Items 2 and 3 amend the A New Tax System (Goods and Services Tax) Act
1999 which is consequential to the removal of 'registered care' as a kind
of Commonwealth supported child care by Schedule 1 of this Bill.
Items 4 and 5 make minor consequential amendments to the Early Years
Quality Fund Special Account Act 2013 based on the introduction of new
terminology of 'approved provider' and 'large centre-based day care provider'
in Schedule 1 of this Bill.
Item 6 reflects the usage of the term 'approved child care service' in
Schedule 1 of this Bill to make a minor consequential amendment to the Fringe
Benefits Tax Assessment Act 1986.
Items 7, 8 and 9 make amendments to the Income Tax Assessment Act
1997 in consequence of the cessation of the CCB and CCR and the
introduction of the CCS and ACCS by Schedule 1 of this Bill. The Explanatory
Memorandum notes that: 'The overall approach to the tax treatment of child care
payments, however, remains unchanged'.
Schedule 3 – Other amendments
Items 1 and 2 come into effect the day after Royal Assent and simplify a
provision in the A New Tax System (Goods and Services Tax) Act 1999
relating to the Goods and Services Tax (GST) treatment of child care funded by
the Commonwealth. The provision allows the Minister to determine certain kinds
of child care for this purpose to enable new child care funding programmes to
be treated consistently for GST purposes.
Items 3 and 4 come into effect on 1 July 2016 and allow the Minister to
prescribe circumstances in which applications (made after that date) for
approval of a child care service are taken to not have been made. This rule
making power is intended to be used to limit applications to address excessive
growth within a particular child care service type, specifically where there
are concerns about proven or alleged non-compliance with family assistance law.
Items 5 and 6 shorten the period, from six months to three, in which CCB
service approvals are able to be backdated from the date of application. This
provision comes into effect on 1 July 2016 and is transitional in nature,
serving to ensure that lengthy backdated approvals are not possible in the lead
up to the new CCS system.
Items 7 and 8 come into effect on 1 July 2016 and allow the Secretary to
reassess whether a child care service continues to meet the conditions of
continued approval. Where the service does not, its approval may be cancelled.
This provision ensures that sanction action in relation to non-compliant
services can occur in the lead-up to the new CCS system and aligns with the
Secretary's capacity to review the approval of approved providers upon
commencement of Schedule 1 of this Bill.
Items 9 through 18 make amendments related to the cessation of enrolment
advances, ensuring that no new enrolment advances received from 1 July 2016 are
payable and will ensure that where, from 1 July 2016, enrolment advances were
paid in relation to enrolments that occurred more than four years beforehand,
the Secretary is able to begin recovery of those advances.
Schedule 4 – Application, saving
and transitional provisions
Item 1 defines terms specifically for the purposes of the application, savings
and transitional provisions in Schedule 4.
Items 2 through 6 are provisions relating to the transition to and
commencement of the new system, particularly as it relates to the CCS and ACCS,
brought into effect by the Bill.
Items 7 and 8 relate to the existing CCB and CCR system, including
saving the operation of legislation and instruments to ensure that eligibility
and entitlement for the CCB and CCR (for child care that occurred before
commencement) can still be determined and reviewed after the new system
Item 9 ensures continuity by deeming operators of child care services to
be 'providers' under the new CCS system on and from commencement day.
Item 10 saves the effects of the previous law relating to debts incurred
under the previous system. Liability for debts under the old system continue,
new debts can arise in relation to CCB and CCR payments, debts can be recovered
under the recovery powers (as amended in Schedule 1 of this Bill) and old
decisions are still reviewable.
Item 11 clarifies that the amendment of the delegation power does not
affect a delegation (or power exercised in reliance on one) previously in
Item 12 gives the Minister broad power to make rules, particularly
dealing with transitional issues. The Bill's Explanatory Memorandum notes:
Although the power is broad and allows the Minister to modify
the effect of principal legislation, the power is intended to be limited to
ensuring the smooth transition into the new CCS and ACCS system. The power is
intended to be relied on to ensure beneficial outcomes for providers, services
and individuals who may otherwise be affected by unanticipated scenarios that
arise at transition. The power to modify principal legislation is also limited
to a two year period from commencement in light of the expectation that no
further transitional issues will arise after that time.
Human rights implications
The Bill engages the following human rights, as outlined in the
the right to work, under Article 6 of the International
Covenant on Economic, Social and Cultural Rights (ICESCR);
the rights of parents and children, under Articles 3, 18 and 19
of the Convention of the Rights of the Child (CRC);
the right to an adequate standard of living, under Article 27 of
the right to social security, under Article 9 of the ICESCR;
the right to be not discriminated against, under Article 26 of
the International Covenant on Civil and Political Rights (ICCPR) and Article 2
of the CRC;
the right to be presumed innocent, under Article 14 of the ICCPR;
the right to privacy, under Article 17 of the ICCPR and Article
16 of the CRC.
The Bill's Explanatory Memorandum notes that the Bill advances human
rights by encouraging families to work, or work more, by simplifying and making
more affordable and flexible access to child care.
Further, to the extent the Bill may limit some rights, those limitations
are 'reasonable, necessary and proportionate'.
Financial impact statement
The Bill's Explanatory Memorandum notes that the Bill forms part of the
government's $40 billion Jobs for Families Child Care Package, which includes more
than $3 billion of additional expenditure over the forward estimates. 
The Child Care Subsidy introduced by the Bill is funded for $21 billion
over two years from 2017-18; the Additional Child Care Subsidy for $178.3
million over the same period.
The Committee thanks those individuals and organisations who contributed
to the inquiry by preparing written submissions or by appearing at the public
Navigation: Previous Page | Contents | Next Page