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Get the rundown on applying third party gap fees

 
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Changes to the way ‘third party’ gap fee payments are applied when determining Child Care Subsidy (CCS) entitlements affect how long day care services calculate fees for families eligible for QKFS Plus Kindy support subsidy.

The Australian Government classes the Queensland Government’s QKFS Plus Kindy support subsidy as a ‘third party payment of gap fees’.

This means that long day care services can deduct the CCS from fees before subtracting the gap fee payment, QKFS Plus Kindy support subsidy, when calculating kindergarten costs for eligible families.

QKFS Plus Kindy support subsidy does not affect the CCS amount that long day care services should apply to the usual childcare fee.

It is designed to enable eligible children to benefit from kindergarten at low or no cost to their families.

Applying the QKFS Plus Kindy support subsidy payment after deducting the CCS will ensure the maximum benefit is passed on to the family to further reduce out-of-pocket expenses.

Note: you cannot claim QKFS Plus Kindy support subsidy payment for a child who is eligible for the Additional Child Care Subsidy in cases where this covers the entire gap fee.

Can I see an example?

Nikki’s child, Courtney, is 4 years old and is enrolled at the local long day care service for 3 days a week. Courtney attends day care for 30 hours each week, which includes 15 hours in the approved kindergarten program.

Nikki’s circumstances:

  • eligible for the maximum rate of the CCS as her family income is below the threshold for the maximum subsidy rate of 85%
  • holds an Australian Government Health Care Card (low income eligibility) and therefore is eligible for additional fee support from the Queensland Government through the QKFS Plus Kindy support subsidy
  • the service charges $115 a day for a 10-hour session, which is $345 a week before subsidies are deducted. As this is below the CCS hourly rate cap (currently $12.20 per hour), the CCS covers 85 per cent of the cost.*

The service is a Queensland Government-approved kindergarten program provider and receives subsidies from the Queensland Kindergarten Funding Scheme (QKFS) to help offset the cost of providing a teacher-delivered kindergarten learning program.

Nikki is entitled to receive QKFS Plus Kindy support subsidy to ensure the family’s out-of-pocket costs are not a barrier to Courtney benefitting from a kindergarten program.

QKFS Plus is deducted from her fees after CCS is applied for the duration of the kindy program (for example, 40 weeks), however, QKFS Plus Kindy support is a quarterly subsidy and must be passed on in full to eligible families each quarter.

In Nikki’s case, the out-of-pocket cost for the 15-hour kindergarten program component is covered by QKFS Plus Kindy support subsidy. However, it does not cover the full service fees as Courtney is enrolled for extra hours which Nikki will need to pay.

Example calculations

​Child attends kindy 3 days a week (30 hours a week)
​Weekly cost – 40-week kindy program (a)
​Annual cost – 40-week kindy program (b)
​Service fees

​$345

​$13,800

​Less 95% of the child care subsidy (at 85%)

​$278.58

​$11,143.50

​Equals out-of-pocket cost (gap fee)

​$66.41

​$2656.50

​Cost of 15-hour kindy program (50% of the total cost)

​$33.20

​$1,328.25

​Less QKFS Plus Kindy support subsidy (third party gap fee payment) (b)

​$33.75

​$1,350

​Out-of-pocket cost

​Nil

​Nil

(a) Weekly and annual costs are based on a 40-week kindy program.
(b) Assumes QKFS Plus Kindy support is paid by the service equally over 40 weeks in a calendar year.

Related information

Read more about the Australian Government’s advice on third party payment of gap fees and QKFS Plus Kindy support.

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Last updated 29 October 2020