Enrolling a child in daycare or long day care in Australia often involves signing a contract with terms that rival a commercial lease in complexity. Between enrolment bonds, notice periods, absent day charges, and fee increase clauses, parents can find themselves locked into arrangements that are difficult and expensive to leave — even if the quality of care doesn't meet their expectations. Australian Consumer Law provides protections, but enforcement is inconsistent across the sector. This guide helps you understand what you're agreeing to before you sign.
What is a Bond and Cancellation?
A childcare contract (or enrolment agreement) is the agreement between a parent or guardian and a childcare provider governing the care of a child. It typically covers enrolment fees or bonds, daily or weekly fees, attendance patterns, notice periods for changes or cancellation, late pick-up penalties, and the provider's policies on illness, behaviour, and holidays. These contracts are subject to the Australian Consumer Law and the National Quality Framework for Early Childhood Education and Care.
Red flags to watch for
While bonds are common, excessive non-refundable amounts may constitute an unfair contract term under the ACL, particularly if the centre can terminate your enrolment without equivalent penalty.
Long notice periods mean you're paying for weeks of care you may not use. Some centres require this even when the child has been removed due to safety concerns.
Being charged full fees for days your child doesn't attend — including when they're sick — is standard for booked days, but contracts should specify if there are any allowances for illness.
Some contracts allow fee increases with as little as 14 days' notice and no cap, giving you virtually no time to find alternative care if the increase is unaffordable.
If the centre can remove your child with shorter notice than you must give to leave, the contract is one-sided.
Your legal rights
Under the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010), childcare contracts are subject to the unfair contract terms regime (§23-28). Terms that are not transparent, create a significant imbalance, and are not reasonably necessary to protect the provider's interests may be declared void. The ACCC has specifically investigated the childcare sector for unfair contract terms. Under the National Quality Framework (Education and Care Services National Law Act 2010), childcare providers must meet quality standards, and parents have the right to access information about the service's compliance history. The Child Care Subsidy (administered under A New Tax System (Family Assistance) Act 1999) helps offset costs, but the subsidy does not protect parents from unfair contract terms.
Questions to ask before you sign
- 1What is the enrolment bond, and under what circumstances is it refundable?
- 2What notice period must I give to cancel or reduce days, and what notice will you give me for fee increases?
- 3Are there any allowances for absences due to illness or holidays?
- 4Under what circumstances can the centre terminate my child's enrolment?
- 5How are fee increases determined, and is there a cap?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.