What to do if your childcare centre goes into administration
Finding out your childcare centre has gone into administration can stop you in your tracks. Your first thoughts are probably about your little one. Will their room still be there on Monday? Will they still see the educators they love? And what about the fees you've already paid?
Take a breath. Administration is a process that lets a business keep running while its finances are reviewed, and centres often stay open with care continuing as normal. Recent news in the sector has shown exactly that, with families told to keep attending their centres as usual while administrators do their work.
In this guide, we explain what administration means for a childcare provider, what usually happens next, the simple steps you can take now, and how Care for Kids can help you feel prepared for whatever comes next.
What does it mean when a childcare centre goes into administration?
When a childcare provider enters voluntary administration, an independent expert called an administrator takes control of the business to work out its future. The process is designed to either save the business or get a better result than closing it straight away. The business can keep operating while this happens.
In plain terms, administration is a pause and review. It gives the provider breathing room to sort out its finances, and it doesn't mean your centre is closing.
How long does administration take?
The early stages move quickly. Under ASIC's guidance, the administrator holds a first meeting of creditors within eight business days and a second meeting, where the company's future is decided, usually within 25 business days. Providers often say the whole process will take several weeks.
What are the possible outcomes?
At the second meeting, creditors vote on one of three paths:
- The business is restructured. The provider agrees a plan (called a deed of company arrangement) to deal with its debts and keeps going.
- Control returns to the directors. The business goes back to running as it was.
- The business is wound up. In this case, centres are often sold to another provider, which can mean care continues under a new name.
For families, the first two outcomes can mean very little changes day to day. Even in the third, centres don't always close, as buildings, staff and enrolled families are part of what makes a centre worth taking over.
Will my child's centre stay open?
In most cases, yes, at least while the administration is underway. Administrators usually want centres to keep running because an operating business is worth more than a closed one. That's why providers in administration often tell families that care arrangements, opening hours and staffing will stay the same.
For your little one, a normal day will likely look exactly like it did last week. The same educators, the same routines, the same friends at drop-off.
Your centre still has to meet the same standards
Administration changes who manages the business, but it doesn't change the rules. Your centre is still overseen by your state or territory regulatory authority and still has to meet the National Quality Framework, including safety, supervision and educator requirements.
What if the centre is sold or changes hands?
If the provider is restructured or its centres are sold, you may see a new name or a new owner. Often the educators and the building stay the same, and the new provider takes on enrolled families. Your centre should let you know about any change well before it happens.
What should parents do if their childcare goes into administration?
Keep going to your centre as normal unless you're told otherwise, and stay in touch with your centre director. A few simple steps now will help you feel in control, whatever the outcome.
- Keep attending as usual. Administrators generally ask families to keep their normal routine while the review happens. Consistency is good for your little one, too.
- Talk to your centre director. They're your best first contact for questions about your child's days, room and educators.
- Read every update carefully. Providers and administrators usually email families with news. Keep an eye on your inbox and the parent app your centre uses.
- Keep your records in order. Save your latest statements, receipts and enrolment details somewhere easy to find, in case you need them later.
- Check before paying ahead. If you usually pay fees in advance, ask your centre how payments are being handled during the administration.
- Have a backup plan in mind. You may never need it, but knowing which nearby services have vacancies can bring real peace of mind.
- Look after the educators. They may be feeling unsettled, too. A kind word at pick-up goes a long way.
Questions to ask your centre
- Will my child's days, room or educators change?
- How will I be told about any updates?
- Are fees and payments being handled any differently?
- Who can I contact if I have a concern?
What happens to my Child Care Subsidy?
While your centre keeps operating, your Child Care Subsidy (CCS) should keep flowing as usual. CCS is paid to your provider and passed on to you as a reduction in your fees, so if nothing changes with your enrolment, there's nothing extra for you to do.
If you move to a new service, or your centre is taken over by a new provider, you'll likely have a new enrolment. Services Australia can only pay CCS once you've confirmed your child's enrolment details, so log in to your Centrelink account through myGov and confirm it as soon as the new enrolment appears.
It's also a good time to check your CCS details are up to date. The Care for Kids Child Care Subsidy Calculator can help you see what you're likely to pay at a new service.
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How Care for Kids can help
Care for Kids is here to help you feel prepared. You might stay exactly where you are, or you might want to look around. You can explore every option in your area in one place, at your own pace.
- Search childcare near you. Use the Care for Kids childcare search to see long day care, family day care and other services close to home or work.
- Shortlist and compare. Save your favourites and compare cost, location and learning approach side by side.
- Get in touch quickly. Call or enquire directly with services through their listing, so you can ask about vacancies and start dates.
- Work out your costs. Our Child Care Subsidy Calculator shows what your family could pay at a new service in a few seconds.
- Plan a smooth move. If you do decide to switch, our guide on changing to another childcare centre walks you through it, and our tips on staying organised on childcare waitlists help you keep track of your options.
Putting your name down somewhere as a backup doesn't mean you're giving up on your current centre. It simply means you'll have choices if you need them.
You've got this
News that your childcare provider is in administration can feel unsettling, but it's rarely the end of the story. Centres often keep running, educators keep caring for your little one, and you have time to take things one step at a time. Stay informed, keep your records handy, and know that Care for Kids is here to help you explore your options when you're ready.
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FAQs
Can I get a refund on prepaid childcare fees if my centre goes into administration?
If you've prepaid childcare fees and your centre goes into administration, you may be owed that money as a creditor. ASIC explains that creditors lodge details of their claim with the administrator, along with invoices or receipts. Unsecured creditors aren't always repaid in full, so ask your centre or the administrator how prepaid fees are being handled.
Do I need to give notice to leave a childcare centre in administration?
Notice periods are set out in your childcare enrolment agreement. Before booking your child's last day at a centre in administration, check your agreement and ask the centre director or administrator how the notice period applies. Getting this confirmed in writing can help you avoid being charged for extra weeks.
What happens to my child's childcare records and photos if the centre is sold?
If your childcare centre is sold or changes owner, ask how your child's portfolio, learning stories and photos will be kept, especially if the centre moves to a new family app. It's a good idea to save any photos and updates you treasure from the app straight away.
How do I explain a childcare centre change to my toddler?
When a childcare centre changes owner or a favourite educator leaves, keep your explanation to your toddler short, simple and positive. Give them a chance to say goodbye to familiar educators, and keep routines at home as steady as possible while they adjust.
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