Free childcare package to end soon, government introduces new transition measures

Federal education minister Dan Tehan said JobKeeper payments would cease for the sector from July 20.

Instead, the government will pay childcare services a "transition payment" of 25 per cent of their usual fee revenue.

This payment will be made from July 13 to September 27 as it transitions back to the childcare subsidy system.

Providers will be asked to cap fees at the level of the reference period, which is the fortnight ending in March 2.

Mr Tehan said demand for childcare places was increasing again, prompting the new transition phase.

"No one imagined two months ago that we would be in the position that we are," he said.

"I think most people, most experts thought it would take at least four to six months for us to be in this position.

"So what we must do is now put in a system, in place, that enables us to transition, to be able to deal with the extra demand that is coming into the system and that is what this package is designed to do."

Mr Tehan said the most recent survey showed that demand has reached 74 per cent across the childcare sector.

He said the government would bring forward the last two relief payments scheduled for September to assist with cash flow.

He also said the activity test for families eligible for childcare subsidies would be eased until October 4 to support those whose employment had been impacted by COVID-19. Families will receive up to 100 hours per fortnight of subsided care during this period.

The federal government announced a childcare package on April 2, which meant providers received 50 per cent of their fees from the government on the condition they did not charge parents.

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