Major childcare providers warn they may need to turn children away under the government's free childcare package as they struggle to operate with half their usual revenue.
Childcare providers are paid 50 per cent of their revenue by the government and cannot charge parents extra under the free childcare scheme introduced this month, with funding based on enrolment levels before the mass exodus of children at the start of March amid concerns about coronavirus transmission.
But as parents have started returning their kids to childcare as the number of new coronavirus cases falls, some providers have said the reduced income means they cannot accept children back.
Maroubra working parents Monique and Matt have been keeping their four-year-old son at home from childcare. "We're starting at 7 am and working through the night, it’s exhausting," Monique said.
As new infections dropped and working from home took its toll, the couple decided to send their son back to the Surry Hills childcare centre where he is enrolled four days per week. But the centre said he could only attend one day, and that the family would have to seek alternative arrangements.
Early Childhood Australia chief executive Sam Page said she was aware parents were being turned away and called on the government to boost funding options.
"I don’t think [50 per cent] is enough, particularly as we start gearing up towards recovery. JobKeeper doesn't cover the wage of a full-time educator. Services need to be able to access increased levels of funding as demand increases," she said.
"They still have to comply with ratio rules across age groups and heightened hygiene standards ... If you’re a centre with a lot of healthcare workers, there isn’t enough room for other families."
But Early Learning and Care Council of Australia chief executive Elizabeth Death said the childcare package combined with JobKeeper formed a "comprehensive package with a good safety net" for 95 per cent of providers after the Australian Tax Office on Wednesday ruled most were eligible for the JobKeeper subsidy on account of having no GST turnover.
"These packages are designed to keep the doors open, not to provide a profit. Overall it should be very easy to access your early childhood service again," Ms Death said.
"If there are providers that are turning children away following this announcement of the ATO, then this would be a concern for me."
Kids Club, which runs 17 centres, has told some parents it could not accept bookings as a quarter of staff were ineligible for JobKeeper due to visa requirements, and its service revenue had reduced by 62.3 per cent. "[This] has greatly diminished our capacity to accept families returning back from long periods of absences or suspended enrolments."
SDN Children's Services, which operates 30 centres, has asked parents to apply for bookings in advance so centres can prioritise families. Chief executive Kay Turner said even when combining the relief package with JobKeeper and reduced staff hours, SDN is 20 to 25 per cent short of revenue to break even.
"We need to reduce the number of children we can have attended each day so that we can continue to meet child [to] staff ratio requirements and continue to provide quality service," she said.
Julia Davison, chief executive of Goodstart Early Learning, said each of the organisation's 665 centres had been impacted by its decision to lower the child to educator ratio. "At this stage, we are not turning away children but as more families return their children to early learning and care we may experience difficulties in some centres," she said.
Federal Education Minister Dan Tehan has told providers to apply for an exceptional circumstances payment if their attendance levels were higher than anticipated.
"As the new system is bedded down, the government is working with providers and the sector to ensure that demand for services is met," he said.
The free childcare package will be reviewed at the end of this month.