Parents will not have to pay childcare fees if centres close because of the coronavirus pandemic, but the sector is warning government funding would fall short in the event of widespread shutdowns.
Representatives from the sector wrote to Prime Minister Scott Morrison and federal Education Minister Dan Tehan on Tuesday calling for a package of support to help services stay open.
The childcare sector is “well and truly worried” about the prospect of a coronavirus shutdown.
In a statement on Friday, Mr Tehan said the government was working with the sector and state and territory governments on contingency plans. The Education Department released a fact sheet that stated if centres closed they could not claim Child Care Subsidy and "as child care cannot be offered, families must not be charged fees".
This overrides individual childcare agreements that often have clauses allowing centres to charge during times they are closed, such as public holidays.
Mr Tehan said childcare providers could access grants through the $14 million Community Child Care Special Circumstances Fund to help cover costs, including wages, in the event of closures.
Early Childhood Australia chief executive Sam Page said it was "reassuring" the government was taking it seriously but $14 million was "well short" of what would be required. She pointed out a mid-size service would normally receive $7000-8000 a day in Child Care Subsidy plus fees from parents and there were nearly 16,000 centres across Australia.
Ms Page was briefed on the government's response on Friday morning and told the government would consider increasing the fund if necessary, using savings from unpaid Child Care Subsidy. Mr Tehan's office did not confirm this.
Ms Page said it was unclear whether the special circumstances fund would reimburse childcare centres for all lost revenue, or just lost Child Care Subsidy. All childcare centres charge more than the subsidy since the legislation requires a co-payment from parents and many charge well above it.
She said the sector was "well and truly worried" about coronavirus causing individual centres to close or authorities ordering a widespread shutdown.
"There's a really high level of anxiety out there among service providers, they're all sort of calculating how long they could survive if they had to shut down and it's not very long at all," Ms Page said.
"Small business [owners] have mortgaged their own homes, small not-for-profits have very little reserves, even big organisations can't claim on business continuity insurance because of the nature of the pandemic so they'd have to draw on reserves."
Ms Page said "it would be a catastrophe for the economy if the sector started to falter".
Ordinarily, Child Care Subsidy is only paid when children attend childcare but Mr Tehan said individual families in self-isolation could use their entitlement of 42 days of absence without losing the subsidy.
He said families experiencing a loss of income could be eligible for Additional Child Care Subsidy (temporary financial hardship).
An Education Department spokesperson confirmed centres that were small businesses could also access the $17.6 billion stimulus package announced on Thursday. However, Ms Page said it was unclear if not-for-profit centres were eligible.
Professor Mary-Louise McLaws, an infection control expert at the University of NSW, said the next stage of fighting a pandemic was mitigation, which means authorities have the ability to close childcare centres, schools and businesses and lock down residential aged care facilities.
She advised parents to keep sick children home from childcare or school until they were completely free of symptoms.
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