The misguided ‘payment by attendance’ system

The “payment by attendance” is a system to provide child-care subsidy to day-care centers based on the number of days attended by each children. The government pays 25 percent of the subsidy amount if a child attends the day care less than five days, 50 percent for attendance of 6 to 10 days and full payment for more than 11 days in attendance. It may seem reasonable, but if you look further, you will understand how unreasonable this system is.

Let’s say that a day care is operating with a full capacity of 20 children and receives 300,000 won ($270) per child, fully covered by the government as child-care subsidy. But many children in multicultural families often visit their families in another country and are absent from day care for two to three weeks. If the child attends the day care for less than five days, the child-care provider can only claim 75,000 won for the child out of 300,000 won, based on the payment-by-attendance system.

Because readmission to the day care often requires prolonged waiting period, the day-care provider cannot discharge the child for long absence. The child-care cost is set by the head of the local government, so the day care cannot raise the tuition. However, the operating expenditures, such as the teacher wages, transportation service and utility cost, remain the same. So the day cares end up sustaining the loss as much as reduced income.

The child-care fee is the just payment in return for child-care service, and its purpose does not change because the government is paying for the parents. The payment by attendance shifts state’s responsibility of “free child-care service” to the providers. Moreover, day cares that fail to follow the payment-by-attendance rule are brought to administrative dispositions and criminal charges such as business suspension and refund of the subsidies. The system actually encourages violations and discords. The child-care service providers have been making sacrifices for national development, and they are asked to make yet another sacrifice.

*Park Moon-taek, Partner at a law office, Damso