The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.T.52 Third party payments & discounts (CCS, ACCS)

Definition

When a third party contributes to a family’s early childhood education and care (ECEC) fees, the approved provider (1.1.A.90) must deduct the contribution from the total session fee before applying the CCS percentage (1.1.A.70). This ensures families only receive CCS for the amount they are charged, as required under FA law.

Example: Dante attends Daisy Child Care. The service charges $100 per session, and his family have a CCS entitlement of 60%. As a result, his parents normally pay a gap fee of $40 per session. However, Dante’s father’s employer is contributing $40 to Dante’s fees. Daisy Child Care deducts $40 from the original session fee before reporting. The new session fee is $60, and the CCS and gap fee for Dante’s sessions is recalculated on the new fee. Now Dante’s sessions receive $36 CCS, and his family pay a gap fee of $24.

Exceptions

Prescribed discounts

Certain contributions are exempt from this rule and allow third parties or providers to contribute to the gap fee without reducing the family’s CCS entitlement. These are:

  • prescribed third party payments
  • discounted care for early childhood workers
  • discounted care for a period of emergency.

State or territory government payments

State and territory governments may contribute to some or all of a family’s gap fee with no impact on CCS in the following circumstances:

  • contributions from a state or territory government for a disadvantaged or vulnerable child
  • contributions from a state or territory government for a child attending a preschool program at a CBDC service.

Example: Sunny also attends Daisy Child Care, and her family has a CCS entitlement of 85%. As a result, her parents normally pay a gap fee of $15 per session. However, because Sunny is considered vulnerable the state government contributes $15 to the family’s fees. Because this is a prescribed third party payment, Daisy Child Care does not need to reduce the session fee before reporting. As a result, Sunny still receives $85 of CCS, but the gap fee for her family is now $0.

Discounted care for early childhood workforce

Approved providers can apply a discount after the CCS calculation for the child of an educator or cook that is employed by that provider. The criteria for the discount are the:

  • employee must be employed, contracted or engaged at that service in a week that the child attends that service
  • service must be a CBDC or OSHC service
  • family must still pay a gap fee that is at least 5% of the hourly session fee.

Example: Mark works as a cook at Daisy Child Care. His child attends the service 2 days per week and receives 60% CCS. Normally, Mark pays a gap fee of $40 per session, however, Daisy Child Care is offering a 75% workforce discount. Now Mark still receives $60 CCS per session, but his gap fee is reduced by 75% to $10.

Discounted care for a period of emergency

Approved providers can apply a discount for families where a period of emergency (1.1.P.78) as declared by the Department of Education is in effect. This discount can be applied when:

  • a child does not attend care at a service within the area of emergency
    Note: This does not apply where the child has attended for part of a day.
  • the emergency has caused the ECEC service to close.
    Note: This does not apply for partial closures.

Record keeping requirements

Approved providers must maintain records of all third party payments and discounts, including how the contributions were applied to family accounts.

Providers must also include information on prescribed discounts in session reports and statements of entitlements.

Act reference: FAAct Schedule 2 Part 1 section 2(2A)(c) a payment prescribed by the Minister’s rules

FA(Admin)Act section 201B Enforcing payment of hourly session fees, section 201BA Provider may allow discount for care provided to child of educator or cook engaged by provider, section 201BB Provider may allow discount for session of care because of prescribed event or circumstance

CCSMinRules section 16A Prescribed payments for determining hourly session fee, section 47A Approved provider must give certain information about third party payments, section 54B Prescribed circumstances discount for sessions of care provided during periods of emergency or by States or Territories

Policy reference: FA Guide 1.1.S.35 Session reports (CCS), 1.1.S.05 Salary sacrificing (CCS), 4.6.1.40 CCS - statements of entitlement, 4.7.3 CCS & ACCS emergency absences

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