Do you own a childcare centre? What you need to know about the Federal Government’s assistance package in the face of COVID-19

The outbreak of COVID-19 has placed an inevitable strain on many small businesses and Australia's economy. With many industries affected by forced closures of their businesses, the childcare sector remains open, but with little to no students in attendance, childcare businesses are suffering significant financial loss.

 

Prime Minister Scott Morrison announced earlier this month a relief package for the childcare sector, with the aim of keeping over 13,000 childcare centres across the country open and allowing parents to send their children to childcare.

The Government's package now makes all childcare centres across the country free for parents. This means parents are not required to pay any gap fees or any out of pocket expenses when sending their kids to childcare, back dated to 23 March 2020.

The free childcare services are available to all families, with means testing for childcare subsidies suspended.

The Government will also pay childcare centres 50% of their fee revenue up to the existing rate cap based on enrolments as at 2 March 2020.

The Government's package is a stimulus for centres to keep their businesses afloat during these unprecedented times but of course, on the provision that the centre:


  • remains open;
  • does not charge any fees to parents; and
  • continues to care for children sent by their parents, prioritising vulnerable children and children of parents that are essential workers.
This new system commenced on 6 April 2020 and is expected to last for at least 6 months with the Prime Minister vowing that it is only a temporary measure that will evolve back to the existing system on the other side of the COVID-19 crisis.

Although childcare centres will receive payment of half of their revenue by the Government, they may also have access to subsidies under the JobKeeper Payments to continue to pay their employees, if:


  • their business has a turnover of less than $1 billion and their turnover has fallen by more than 30% (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover has fallen by more than 50% (of at least a month); or
  • the business is not subject to the Major Bank Levy.
Eligible centres will be able to claim a fortnightly payment of $1,500.00 per eligible employee from 30 March 2020, for a maximum period of 6 months.

Please contact our Property team for any assistance during these challenging times.

Contributors

Sarah Ibrahim Lawyer