Australian Government

Changes to inducements in early childhood education and care sector from 2023

An inducement, traditionally a reward provided by service providers to secure a child’s enrolment, is undergoing significant changes. From 2023, incentives that are financial in nature or aren’t directly related to the quality or provision of education and care services will no longer be permissible according to the new inducement rules. Examples of such prohibited incentives include cash or vouchers, iPads, tablets, other electronic gadgets, and various gifts. However, this prohibition doesn’t extend to offers of discounted or free care, which can still be provided. Any such fee discounts must be accurately reported when a Child Care Subsidy (CCS) is being claimed.

Providers can continue to market their services to prospective families and can offer complimentary site visits or trial periods. Furthermore, they can distribute marketing merchandise valued up to $30, in compliance with a written agreement. By January 1, 2023, providers are expected to stop offering non-permitted incentives, ensure that any services or educators under their approval also desist from offering such incentives, and update their marketing material, both printed and online, to exclude any prohibited inducements.

These new inducement rules are designed to foster a more transparent market across the sector, aligning with the government’s commitment to enhancing the fairness of childcare fees. The changes will prevent providers from enticing families with unrelated rewards, thus ensuring that a child’s enrolment decision is based on the quality of education and care services.

Providers who don’t adhere to these changes and continue to offer non-permitted incentives may face significant consequences. These could range from the imposition of conditions on their approval to the potential suspension or even cancellation of their approval. Such measures underscore the government’s seriousness in implementing these changes to ensure an equitable and transparent early childhood education sector.

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