The education department is investigating more than 190 childcare providers in Australia over complaints that they may have breached funding rules during the temporary Covid-19 relief package.
Guardian Australia can reveal these investigations were triggered after the department received more than 1,900 tip-offs between early April and early June.
The figures illustrate the level of concern within the community over how the government’s “free childcare” package was being implemented, amid reports some families were struggling to access care because services struggled with a drop-off in available funding.
Samantha Page, the chief executive of the peak group Early Childhood Australia, said the temporary relief package generated widespread uncertainty across the sector as it was announced just a few days before it came into effect in April.
“The whole idea of switching off fees completely and receiving these fixed payments and not knowing whether you were eligible for jobkeeper or not at that time brought out some of the worst survival tendencies, if you like, in the sector,” she said.
“I think that’s a real pity. I wish the government from that experience had learned the lessons of the need to consult and consult widely and actually test solutions with the sector.”
The government is now preparing to wind up the temporary relief package and reintroduce childcare fees and the old childcare subsidy on 13 July as it says demand has been steadily increasing from when it plummeted at the height of the pandemic and the system has “done its job”.
Under the emergency funding package, the government has been paying services half of their pre-crisis fee revenue or half of the old childcare subsidy rate cap – “whichever is lower”. Services were prohibited from charging families any fees, removing a chunk of the old revenue they could access.
While the relief package was intended to work together with the jobkeeper wage subsidy of $1,500 per worker per fortnight, there were persistent concerns that some services did not meet the test for the payment and those that did qualify could not claim it for some casuals or work visa holders.
Services have been allowed to limit attendance based on the funding they have at their disposal, but with priority given to the children of essential workers or from vulnerable home environments.
In late April, the education department emailed childcare providers to warn their funding could be cut off if they were found to be excessively limiting their capacity during the coronavirus pandemic.
A spokesperson for the education department told Guardian Australia on Wednesday: “For the period 2 April 2020 to 5 June 2020, the childcare tip-off line was contacted 1,916 times and 192 services have been contacted by the department in relation to their obligations under the relief package.”
The government’s plan to reintroduce fees next month came under attack in parliament on Wednesday.
Labor’s early education spokesperson, Amanda Rishworth, told the lower house that “this policy to bring back high childcare fees in the middle of a recession will be a job crusher for women and a wallet smasher for families”.
Challenged in question time over his promise last week to keep jobkeeper in place for six months, Scott Morrison denied that he had broken his commitment by moving childcare workers off the wage subsidy from 20 July and bringing in a $708m sector-wide transition payment.
“The jobkeeper legislation does remain in place until the end of September, but where there is a better way to do things, we won’t step aside from doing them in a better way,” the prime minister told parliament.
“We sought and have received an employment guarantee as a result of providing those transition payments to the childcare sector.”
Guardian Australia asked the education department to explain what level of childcare attendance it assumed or predicted in the second half of July after fees returned.
In a more general response, the department’s spokesperson said survey data from the sector indicated overall attendance hours were 74% of pre-Covid-19 levels in the week beginning 11 May, and that “demand is expected to continue to increase through June and July”.
The spokesperson said the government “considered multiple scenarios to assist in transitioning” to the return to the childcare subsidy and included changes to the activity test and fee capping “to support families to access care”.
“All transition measures will be reviewed at the end of the 12-week transition period,” the spokesperson said.
The final comment suggests the government is keeping its options open depending on how the changes play out. It may face calls to continue with a relaxed activity test beyond October.
Page said demand may continue to rise if childcare remained free – but the reintroduction of fees came during uncertain economic times, with unemployment high and household incomes down.
She called on the government to closely monitor how the reintroduction of fees affected two groups – children and parents.
“It’s really risky because we don’t know what parents’ capacity to pay is,” Page said.
“My prediction – and I don’t have any hard data on this – is that a lot of families will want to keep their foot in the door and will ask to reduce their [childcare] hours because they can’t afford it.”
She said she hoped parents did not end up “stuck between a rock and a hard place”, not being able to take on extra shifts at work because of the financial impost of childcare.
