Illawarra child care educators fed up over new Child Care Subsidy System

Picture: Supplied
Picture: Supplied

A cloud of anger and frustration continues to loom over the federal government’s billion dollar Child Care Subsidy System (CCSS) since it was introduced on July 2.

The regime has revised how child care fees and rebates are calculated and is the biggest child care funding overhaul in 40 years. 

It includes major changes to 16 third-party business management software companies which interface with the national online system to administer child care subsidies.

In the first 25 days of July the Commonwealth Ombudsman received 15 formal complaints about the CCSS while software providers are being inundated with tens of thousands of complaints from early childhood educators.

“The general themes arising in the complaints received by our Office include claims, letters, payment rate and payment suspension/cancellation,” an Ombudsman spokesperson said.

The Mercury understands some parents have been billed incorrectly, and in some cases forced to pay full fees even where subsidies apply. Some educators claim child enrolments have gone missing, their own wages are yet to be processed and software companies are not responding to complaints.

Parents are confused, educators are blaming software providers and the government, the government blames software providers, while software providers are putting it down to user error.

FRUSTRATED: Chantelle Miller, of Illawarra Montessori Preschool, says too much time is taken away from the children to sort out the mess of the new childcare system. Picture: Robert Peet

FRUSTRATED: Chantelle Miller, of Illawarra Montessori Preschool, says too much time is taken away from the children to sort out the mess of the new childcare system. Picture: Robert Peet


  • Some educators are not getting paid while there are discrepancies for others;
  • Parents don't know what their fees are while others are being billed incorrectly (including no rebates at all);
  • Some child enrolments are being "lost" when inputted into the system (an example from one centre was a rebate was eventually organised after phoning CCMS but was given directly to the parent and that money has never been paid back to the centre);
  • Lack of or no support from software providers; and
  • Centrelink not signing off on the correct amount of childcare hours/pupils.


Despite the Mercury speaking with disgruntled educators and software providers on Thursday, a Department of Education and Training spokeswoman said the vast majority of child care providers had successfully transitioned to the system.

She said only 0.1 per cent of providers were yet to make the transition and any problems had arisen from “technical issues” with third party software.

The spokeswoman said there has been no delays in processing assessments and as of this week the majority of educators have been paid and subsidies given correctly.


The Mercury has been contacted by a number of educators regarding issues with software providors Harmony Web and Hub Works.

“We’re still not able to apply for funding through Hub Works so we have had to fork out $10,000 of our own money to [cover wages] ensure these children still have the support networks they need,” Illawarra Montessori Preschool manager Chantelle Miller said.

Ms Miller said the preschool has many children with special needs or from disadvantaged backgrounds who are normally subsidised who still can’t be processed. 

“When parents got their first bill for the fortnight and there was no rebate it was a bit of a shock,” she said. “I’m on a couple of of the Facebook groups set up in the [absence of other support] and it’s the same story: educators like me who are feeling exhausted by the process.”

Amanda Sands has worked in child care for 25 years and currently owns Shellharbour City Family Day Care and manages 10 others centres across Queensland, NSW and Western Australia. She deals with Hub Works and Qik Kids and has had issues with both since the transition. 

Ms Sands said support staff for Qik Kids has been keeping their clients informed despite being inundated with calls and complaints, while Hub Works was “an absolute nightmare”.

“The information from the government is not getting to the provider Hub Works,” she said. “Some centres don’t know how much to pay educators … and now they’re backtracking.”

When a child altered their care from a Wednesday to a Friday, Ms Sands said there was no way to process that until after the fact, which meant rebates would go to the parent instead of the educator and educators had to chase the payment.

“I rang [the government help desk] and they blamed Hub Works, and Hub Works blamed [them],” Ms Sands said, also noting the government help desk did answer 90 per cent of her questions. “Hub Works never answered any questions or phone calls.”

Photo: Fairfax

Photo: Fairfax


A spokeswoman for Hub Works said she had received death threats though was “doing the best she can”.

She said 60 per cent of her clients had no issues since the transition and the rest “want you to do it for them”. The spokeswoman called on the government to do more to educate child care staff about legislation changes.

“A lot of the sector hasn’t taken responsibility and the government has not given them enough information,” she said.

A spokesman for Redbourne Group, who owns Harmony Web, confirmed complaints had gone from 800 phone calls in the first week of June to 31,000 calls alone in the first week of July.

“When [the previous system] was introduced in 2008, a similar situation occurred in which it took customers about a month to become familiar,” he said. “There were also some teething bugs that were promptly resolved. I expect the same will happen this time and we will be back to usual business in the next one to two weeks.”

The spokesman said the majority of complaints were over the speed of support staff returning emails or phone calls, the “vast majority” were asking “how to” questions, though some complaints surrounded “another system that Harmony is integrated with”.


Under the old system, families had their entitlements capped at $7500 per child.

But the new system will only subsidise parents who work, study or volunteer, and each family will have to keep proof of that if Centrelink comes knocking.

Eligibility is based on the parent who is working least, so if one parent works and the other stays at home, the subsidy is zero.

It will also be means tested. Families earning more than $351,248 will get nothing; households earning less than $67,000 will receive 85 per cent of the childcare fee, and middle-income earners will get 50 per cent.

It’s believed 1.2 million Australian families and 16,000 child care centres are affected by the changes.

Families who believe they have been incorrectly billed full fees by their child care provider, they should discuss that with their child care provider.

There is no deadline for families to complete the assessment for the new Child Care Subsidy.

However, families that still need to transition from Child Care Benefit to the Child Care Subsidy have until 23 September to complete the online assessment in order to have their payments backdated to 2 July.