The Child Care Subsidy Parental Activity Test (PAT) determines the number of subsidised childcare hours a family is eligible for based on the level of approved activities undertaken by the parents or guardians. Approved activities include paid work, studying and training, volunteering, and actively looking for work.
Why is it relevant to educators?
If the Parental Activity Test relates only to childcare, it could be asked why it’s relevant to schools. However, children’s experiences in their earliest years set the groundwork for later development.
Schools inherit the outcome of early childhood education, including the child’s cognitive, emotional and social experiences.
The early childhood education and care (ECEC) sector plays a role in school readiness, providing children with the skills necessary to succeed in formal schooling such as emotional regulation, socialisation, and understanding classroom behaviour. Many developmental concerns, such as speech delays, ADHD and autism, are also first identified in childcare settings.
If the Parental Activity Test unfairly impacts or excludes certain families, then the outcome is a group of children who are missing out on vital early years opportunities.
How does the PAT affect families?
Introduced in 2018, the Parental Activity Test restricts the number of subsidised hours of childcare families can access based on the activity level of the parent or guardian with the lowest level of activity. That is, a family where one partner works full time and the other works 8 hours a week is eligible for up to 18 hours of subsidised care per week. If the second partner works (or volunteers/studies) 24 or more hours per week, they are eligible for up to 50 hours of subsidised care per week.
The difficulty is that often parents can’t apply for work or accept places at TAFE or university if they don’t have guaranteed care for their children, but they can’t access the care if they are not already working or studying. This is particularly difficult for parents working in casual positions with unpredictable and irregular work hours.
The result, according to researchers Impact Economics, is that an estimated 126,000 children miss out on childcare because their parents ‘fail’ the activity test, with the majority of these children coming from low-income families.
The call for universal care
In late 2024, the Productivity Commission tabled its report on early childhood education and care, assessing the government’s goal for a universal ECEC program. The proposed system would ensure every child aged 0 to 5 has access to high-quality care for at least three days a week, for 48 weeks of the year.
However, the report points out that the current activity test is a barrier for families on low incomes. Additionally, linking the amount of work, study or volunteering to subsidised care has not had the desired effect of encouraging labour force participation.
“Children experiencing vulnerability and disadvantage benefit the most from quality early childhood education and care, but they are currently the least likely to attend,” Associate Commissioner Deborah Brennan said in the accompanying media release. “A child’s entitlement to at least three days of ECEC a week should not depend on how much their parents work.”
Improvements across the sector
The report said that state governments should ensure the provision of outside school-hours care for primary-school-aged children in public schools wherever there is demand, as well as ensuring there is adequate provision of early ECEC places in remote and rural communities where there are currently gaps.
Government should also prioritise ensuring that ECEC services are inclusive for all children.
“The system can only be universal if every child is welcome. The Australian Government should increase funding to enable the inclusion of all children regardless of their ability or cultural background,” said Commissioner Martin Stokie.
Introducing new measures to support the ECEC workforce—such as tailored training options, mentoring, and professional development and career pathways for those already in the sector, would also be necessary.
“We will not make any progress towards a universal system without addressing the sector’s workforce challenges. Improving pay and conditions is critical but more can be done to improve career and qualification pathways for ECEC professions,” said Commissioner Martin Stokie.
Early childhood lays the foundation for school
Whatever happens in the Early Childhood Education and Care sector impacts the school sector, whether it be the preparedness of the children or the experiences of the workforce.
Children’s early experiences play a crucial role in shaping their cognitive, social, and emotional development, and as children transition to school, educators build upon this foundation. Therefore it is essential that the ECEC sector has strong—and universal—programs essential to ensure all children leave the sector well-prepared for school.
