If an approved provider no longer intends to operate a service, the National Law allows the service approval to be transferred to another approved provider if certain steps are taken and with the consent of the Regulatory Authority.
The receiving approved provider must:
- hold a provider approval before a transfer notification can be submitted
- have the capacity to operate the education and care service under the National Law.
Receiving approved providers are encouraged to seek their own legal advice to ensure they are aware of the legal requirements and responsibilities before submitting a notification of transfer of service approval.
Not following the correct process may result in the:
- transfer being void (section 67)
- suspension of provider approval (section 25(f)).
How service approval transfers work
The transferring approved provider and the receiving approved provider must jointly notify the Regulatory Authority of the intention to transfer the service approval
at least 60 days before the transfer is intended to take effect.
The Regulatory Authority may agree to a shorter timeframe
A notice of intention to transfer a service approval must:
- be in writing
- include the prescribed information
- include payment of the prescribed fee
- specify the date on which the transfer is intended to take effect.
The transfer date is the first day of operations of the receiving approved provider under the National Law, and not the business sale settlement date under private contract. An incorrect transfer date has important implications for the service, as it is used by the Australian Government Department of Education in approving child care subsidy applications for the service.
If the transfer is to be delayed after giving the notification, both the transferring and receiving approved providers must jointly notify the Regulatory Authority as soon as practicable of the new date that the transfer is intended to take effect (section 59A). This notification does not affect consent to the transfer already given by the Regulatory Authority.
Read more about
calculating time frames under the Education and Care Services National Law.
If the notification is provided in accordance with section 59 of the National Law, consent to the transfer is taken (or deemed) to have occurred unless the Regulatory Authority intervenes and advises the approved providers accordingly (section 61). The Regulatory Authority will
not notify the transferring and receiving approved providers of deemed consent.
Intervention by the Regulatory Authority
If the Regulatory Authority intends to intervene, both the transferring and receiving approved providers will receive notice of this decision, in writing,
at least 28 days before the transfer is intended to take effect.
If the Regulatory Authority intervenes, the transfer may not proceed until a further notice is given.
The Regulatory Authority may intervene in a transfer if it is concerned with matters including either:
- the receiving approved provider’s capacity to operate the education and care service, having regard to financial and management capability and any other matter considered relevant
- the receiving approved provider’s history of compliance with the National Law
- any other matter relevant to the transfer of the service approval.
After the Regulatory Authority has intervened
The Regulatory Authority may request further information from both approved providers to decide whether or not to consent to the transfer and may also make inquiries about the receiving approved provider.
This may include one or more of the following:
- reviewing the receiving approved provider’s history of operating a service in accordance with the National Law
- requiring the persons with management or control of the receiving approved provider to complete an
online assessment and/or attending an interview
- requesting a copy of the service’s policies and procedures or other documentation related to the operation of the service.
After intervening, the Regulatory Authority will advise the transferring and receiving approved providers
at least 10 days before the proposed transfer date of its decision to either:
- consent to the transfer
- refuse to consent to the transfer
- suspend making a decision until further information is received for consideration
- take additional time to make a decision on the transfer and advise the approved providers of the decision within 28 days.
Change to intended transfer date
If the intended transfer date has changed, both approved providers must jointly notify the Regulatory Authority of the new intended transfer date. Both approved providers may request an earlier transfer date, however if the earlier date is less than the 60-day period required the Regulatory Authority will consider whether the
circumstances are exceptional.
Let parents know
At least 7 days prior to the transfer, the receiving approved provider
must advise parents of every child enrolled at the service, in writing, that the service approval is being transferred.
Records relating to children currently enrolled in the service must be transferred to the receiving approved provider on the day of the transfer (r. 184 of the National Regulations), subject to the consent of a parent for each child.
Steps once transfer confirmed
Both approved providers are responsible for giving the Regulatory Authority notice that the transfer has taken place
within 2 days of the transfer happening. This must occur regardless of whether the Regulatory Authority intervened before giving consent.
After the transfer is confirmed, the Regulatory Authority will issue an amended service approval to the receiving approved provider.
If the transfer does not occur, both parties are requested to advise the Regulatory Authority in writing.
Considerations for the receiving approved provider
Once the transfer has taken place, the receiving approved provider should consider reviewing and updating certain documents relating to the service such as:
- Quality Improvement Plan
- policies and procedures
- forms (including enrolment, incident, accident, injury, medication).
The Regulatory Authority may visit a service at any time, including after a transfer has occurred, to ensure the service is being operated in accordance with legislative requirements, to provide support or to determine whether a re-rating of the service is required.
Learn more about approval requirements for National Quality Framework services: