Providers must take all reasonable steps to collect gap fees from families electronically. This is a requirement under Family Assistance Law (FAL).
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What is the gap fee?
Families who get Child Care Subsidy (CCS) must make a co-contribution to their early childhood education and care fees by paying the gap fee. The gap fee is the difference between a provider’s fee and a family’s CCS amount.
You must collect gap fees from families using electronic funds transfer. This is a requirement under FAL.
We recommend that you collect gap fees at regular intervals.
What is EFT?
Electronic funds transfer, or EFT, is when a customer pays a bill using electronic means. Typical EFT payment methods include:
- bank or credit card, including mobile wallets
- direct deposit or bank transfer, including PayID
- online payment systems through third party software
- BPAY or Centrepay
- prepaid debit card.
Are payment plans allowed?
Families can pay the gap fee via a payment plan as long as:
- payment is made using EFT
- you keep a record of the payment plan arrangement.
Are payroll deductions allowed?
Most families can pay the gap fee via a payroll deduction as long as:
- payment is made using EFT
- you can identify the payment as being the gap fee for the family.
Is salary sacrificing allowed?
Families cannot pay their gap fee by salary sacrifice because this is considered a third-party payment.
However, families can reduce their fees by salary sacrificing some or all of their total fees before CCS is applied.
The family must still pay a gap fee using EFT.
Read more on our third-party payments page.
Are there any exceptions?
Exceptions are available in limited circumstances for:
- individuals at risk of family or domestic violence
- services experiencing exceptional circumstances.
Providers must apply on behalf of the individual or service seeking exception. Exceptions are re-assessed yearly.
Individual exceptions
An individual may be eligible for an exception if they reasonably fear that paying the gap fee using EFT would put them or their child at risk of family or domestic violence.
Providers must apply on behalf of the individual seeking exception. You must supply supporting evidence.
Apply for an individual exceptionEFT
If you have trouble accessing the online form, download the individual exception form.
Families seeking an exception might be eligible for Additional Child Care Subsidy(ACCS).
Service exceptions
A service may be eligible for an exception if:
- the service is located in a remote or very remote area, and
- experiences poor internet or phone coverage, or
- has a significant number of families who have limited access to a financial institution, which poses a barrier to those families paying electronically.
We may consider other exceptional circumstances. We will generally not consider circumstances that impact a small number of educators at a service.
A service-level exception applies to all families attending a service.
Providers must apply on behalf of the service seeking exception. You must supply supporting evidence.
Apply for a service-level exception
If you have trouble accessing the online form, download the service-level exception form.
How we check payments
We conduct regular audits to check providers are taking all reasonable steps to collect gap fees electronically.
We also share information and data obtained through audits with the Australian Taxation Office. This ensures recipients of government payments are meeting their tax and superannuation obligations.
We conduct audits by either:
- requesting information through a section 158 notice, or
- visiting your service and conducting a face-to-face audit.
Section 158 notices
We will ask you to provide information using a section 158 notice. A PMC must respond to the notice within 14 days.
Read more about section 158 notices and what to do if you get one.
Face to face audits
When we conduct a face-to-face audit, we:
- contact a person with management or control (PMC) to let you know we’re planning an audit
- arrange a suitable time to visit your service
- let you know what information you should have ready
- let you know how long we expect the audit to take.
What you need to do
If we contact you about an audit, you must respond promptly.
The type of information we may request during an audit includes:
- statements of entitlement
- complying written arrangements
- provider, service or educator bank statements
- explanations about fee discrepancies, such as payment plans or outstanding fees
- evidence of the steps you’ve taken where a gap fee has not been paid, or has not been paid electronically
- policies, procedures or other documents that show how your service administers CCS and complies with FAL.
How can you ensure you are complying
To help you comply with this obligation, we have guidance on taking all reasonable steps to collect gap fees.
If you fail to meet your obligations, we may take compliance action.
Online learning
Complete the Electronic Payment of Gap Fees course in Geccko to learn more.