The Australian Government announced its free childcare scheme during the COVID-19 crisis would be turned off on 12 July and it would return to the previous Child Care Subsidy (CCS) regime, along with new transition measures to support the sector and parents. It will also turn off the JobKeeper wage subsidy scheme for the childcare sector from 20 July.

Education Minister Dan Tehan said the Government would pay approximately $2 billion in CCS this quarter to eligible families. The CCS is means-tested to ensure that those who earn the least receive the highest level of subsidy.

In addition to the CCS, the Government will pay childcare services a Transition Payment of 25 per cent of their fee revenue during the relief package reference period (17 February to 1 March) from 13 July until 27 September. This is to replace the JobKeeper payment for workers of the sector.

The additional Transition Payment applies two conditions on child care providers:

  • Child care fees will be capped at the level of the reference period (17 February to 1 March).
  • Services will need to guarantee employment levels to protect staff who will move off the JobKeeper Payment.

The Government will also ease the activity test until 4 October to support eligible families whose employment has been impacted as a result of COVID-19. These families will receive up to 100 hours per fortnight of subsidised care during this period. This will assist families to return to the level of work, study or training they were undertaking before COVID-19.

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