Early childhood wages

The worker retention payment is a grant from the government. It’s paid to ECEC services to help increase your workers’ wages.

The payment will run for 2 years, from 2 December 2024 to 30 November 2026.

Through the worker retention payment, the government intends for all participating providers to receive funding to cover:

• a 10% wage increase for all eligible staff in the first year
• an additional 5% wage increase for all eligible staff in the second year
• a minimum of an additional 20% funding to contribute towards eligible on-costs.

The payment is calculated on the current national award rates. These were updated on 1 July 2024 following the Fair Work Commission’s annual wage review.

To get the payment, providers must:

• apply
• meet the eligibility criteria
• comply with conditions.

The payment will be issued through a grant agreement. Providers must pass the payment on to eligible ECEC workers as a wage increase.

Applications opened on 8 October 2024. Providers can apply at any time before 30 September 2026.

We understand meeting certain conditions, like having a workplace instrument, may take time. We will backdate payments to 2 December 2024 for providers who:

• apply by 30 June 2025
• meet the eligibility criteria from 2 December 2024.

Providers must use the payment to give all eligible ECEC workers a wage increase.  

The payment will cover ECEC workers who:

• work at an eligible service that opts in to the payment, and
• are covered by either the Children’s Services Award 2010 or the Educational Services (Teachers) Award 2020, or
• primarily undertake the duties covered in either of these awards but are covered by a different award or instrument, like a state industrial instrument.

This may include:

• early childhood teachers
• educators
• cooks
• coordinators
• room leaders
• support workers
• trainees and apprentices.

Head office staff and other administration staff do not meet the eligible worker threshold.

Employment types

Casual, part-time and full-time workers who meet the eligibility requirements are eligible.

Labour hire agencies

Workers engaged through labour hire agencies are not explicitly excluded from a wage increase. 

Whilst participating employers must be CCS approved, in this scenario, the service could engage with the labour hire agency to discuss the possibility of increasing wages for labour hire workers in line with workers who are directly engaged. 

Pay increases could be managed between the employer and labour hire agency. This would ensure that all funding is passed on as wages and meets the policy intent that all workers covered by the awards or who are undertaking duties described under the awards receive a wage increase.

New employees

New workers entering your workplace during the grant period will be eligible as long as they:

• meet the eligibility requirements set out above
• are covered by a compliant workplace instrument.

You must limit fee growth by a set percentage from August 2024. This is known as the fee growth cap.

The fee growth cap is:

• 4.4% between 8 August 2024 and 7 August 2025
• 4.2% between 8 August 2025 and 7 August 2026.

The percentage that applies from 8 August 2025 is guided by a new index developed by the Australian Bureau of Statistics. It’s called the Childcare Services Cost Index. It measures changes in prices paid by providers for the goods, services and labour they buy to deliver child care. The 4.2% fee growth cap uses the average of the latest two quarters from the new ABS index.  

We will monitor fee growth. If we think you are breaching this condition, we:

• will contact you
• may terminate your payment.

Requesting an alternative fee growth cap

You may request an alternative fee growth cap for one or more services in exceptional circumstances.

You must be able to demonstrate that the standard fee growth cap would seriously impact a service’s financial viability. For example, if it would result in a reduction or drop in the service’s offerings.

You can submit a request for each impacted service:

• while completing your grant application, or
• separately at any time.

You will need to provide each service’s:

• current and proposed fees schedule, including for different times and cohorts
• financial information like current and anticipated revenue, expenditure and profit/loss information.

Costs included in the fee growth cap

All service costs included in your reported fees are subject to the fee growth cap. Any costs charged as extras and not part of your reported fees are excluded from the fee growth cap.

Vacation care services may increase fees for excursions. Excursion costs excluded from the fee growth cap should reflect only the actual cost of excursions. We may require information from providers to demonstrate this.

New services

Services that open after 8 August 2024 can set an initial service fee. The fee growth cap will then apply to this fee.

Examples

Existing services with established fees 

Service A charged $150 per session on 8 August 2024. The maximum fee service A can charge between 8 August 2024 and 7 August 2025 is $156.60. If service A charges more than $156.60 during this period, they will be in breach of their grant agreement and may need to return funds.

New services 

Service B opens on 1 December 2024 and sets their fees at $160 per session. The maximum fee service B can charge between the date of opening and 7 August 2025 is $167.04.

Providers who get the payment must report information to the department.

Workplace instrument declaration

You must provide a declaration confirming you have given all eligible workers information about the types of compliant workplace instruments. We will provide guidance soon to assist with this.

You must provide this declaration within 90 days of the executing the grant agreement.

Annual declaration and financial statement

You must complete an annual declaration and financial statement.

This comprises:

• a declaration confirming you have used all funding in line with the grant conditions
• a financial statement including total expenditure on wages and on-costs.

We will let you know when reporting templates are available.

Change of circumstances

You must tell us if any of the following change:

• the addition of a new service or removal of an existing service from the provider
• a change in director or owner of the provider
• the transfer of a service from one provider to another.

You must report these changes to CCShelpdesk@education.gov.au.

This is in addition to your regular CCS reporting requirements.

We assess applications against the eligibility criteria and conditions stated in the guidelines.

Before we consider your application complete, we may:

• seek further information from you about it
• ask you to confirm or correct information in it.

We will assess completed applications within 2 months of receipt. We aim to assess each application as quickly as possible.

If we identify errors or omissions in your application, we will contact you. Your application may not be considered complete and accurate until we receive this further information.

We will advise you of the outcome of your application in writing. All application decisions are final.

All successful applicants will be listed on GrantConnect.

We will make payments at the service-level through the Child Care Subsidy System. 

We will send payments to the same bank account as your CCS payments. 

Payments will be labelled as the Worker Retention Payment.

Please ensure your bank account details are up to date via the Provider Entry Point or your third-party software.

Through the worker retention payment, the government intends for all participating providers to receive funding to cover: 

• a 10% wage increase for all eligible staff from 2 December 2024
• an additional 5% wage increase for all eligible staff from December 2025
• a minimum of an additional 20% funding, calculated against the wage increase, for on-costs.

If your service isn't sufficiently funded to deliver the wage increase on an ongoing basis, you can apply for a funding review. If found eligible, you will get extra funding.

Providers with multiple services should smooth funding across their services before applying. An ongoing need for a review must be demonstrated.

Accounting for seasonality

Many services experience seasonal fluctuations in their charged hours of care and staffing levels.

We may adjust funding for Centre Based Day Care providers to account for session reporting trends throughout the calendar year. This will be calculated as an additional percentage of your monthly payment, including:

• 10% increase in December
• 15% increase in January
• 5% increase in February.

This advance will then be recovered via reduced payments from August to October. This helps balance monthly payments over each 12-month period.

Providers with multiple services may experience months where similar services receive slightly differing funding levels.

We encourage providers to:

• manage payments received throughout the year to ensure costs are covered during months of lower charged hours
• consider seasonal fluctuations when allocating any additional amount above the wage increase, and associated on-costs, to their workers
• consider implementing internal processes to balance payments across services throughout the funding period.

Providers must maintain appropriate records to ensure compliance with the grant reporting requirements.

Service profiles

Payment amounts will vary between services. The below examples illustrate potential funding amounts based on different service profiles.

Service profile 1

I operate a Centre Based Day Care service. I employ 24 eligible workers. For every paid staff hour, my service charges 4.7 CCS session hours. This means that I operate at a ratio of one eligible worker for every 4.7 children. The funding calculation considers this as 4.7 CCS session hours for every paid staff member. The average hourly award rate across my staff is $33.48.

This service will receive funding to support the full 10% wage increase on the modern award rates, with over 20% additional funding for on-costs.

Service profile 2

I operate a Centre Based Day Care service. I employ 10 eligible workers. For every paid staff hour, my service charges 4.2 CCS session hours. This means that I operate at a ratio of one eligible worker for every 4.2 children. The funding calculation considers this as 4.2 CCS session hours for every paid staff member. The average hourly award rate across my staff is $30.22.

This service will receive funding to support the full 10% wage increase on the modern award rates, with over 20% additional funding for on-costs.

Service profile 3

I operate a Centre Based Day Care service. I employ 24 eligible workers. For every paid staff hour, my service charges 3.9 CCS session hours. This means that I operate at a ratio of one eligible worker for every 3.9 children. The funding calculation considers this as 3.9 CCS session hours for every paid staff member. The average hourly award rate across my staff is $30.06.

This service will receive funding to support the full 10% wage increase on the modern award rates, with 15% additional funding for on-costs.

Service profile 4

I operate an Outside School Hours Care service. I employ 15 eligible workers. For every paid staff hour, my service charges 9 CCS session hours. This means that I operate at a ratio of one eligible worker for every 9 children. The funding calculation considers this as 9 CCS session hours for every paid staff member. The average hourly award rate across my staff is $31.15.

This service will receive funding to support the full 10% wage increase on the modern award rates, with over 20% additional funding for on-costs.