Early childhood wages

The Australian Government will fund a wage increase for the early childhood education and care (ECEC) workforce through a worker retention payment.

On this page:

Overview

We’re funding a wage increase for the ECEC workforce through a worker retention payment. The payment runs for 2 years and will fund:

  • a wage increase of 15% above the modern award rates
  • a minimum additional 20% funding for eligible on-costs (calculated against your base funding).

Providers opt-in by applying for the payment. The payment will be issued to eligible providers through a grant agreement and delivered via the Child Care Subsidy System. Providers must pass the payment on to eligible ECEC workers.

Applications are open.

Apply for the worker retention payment

Key dates

DateEvent
8 August 2024 – 7 August 2025Fee growth capped at 4.4%
8 October 2024Applications open
2 December 2024Program starts
30 June 2025Applications close for historical leave liability payment
8 August 2025 – 7 August 2026Fee growth capped at 4.2%
30 September 2025

Applications close for backdated payments

Applications submitted after this date will not be backdated

31 October 2025

Applications close for backdated funding review

Funding review requests made after this date will not be backdated

8 August 2026 – 30 November 2026Fee growth cap to be determined
30 September 2026Final application close
30 November 2026Program ends

 

Guidelines Updated 03/07/2025

Download the grant guidelines on GrantConnect.

Read a summary of the grant guidelines below.

Please note the below summary is operational guidance for providers. Updates to this information does not constitute a change to the grant guidelines.

Resources

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What happens next?

The worker retention payment is an interim measure while the Fair Work Commission (FWC) finalises its gender undervaluation priority awards review.

Gender undervaluation proceedings

On 16 April 2025, the FWC made a provisional decision on wages in the Children's Services Award 2010. A final decision has not been made. To find out more, visit the Fair Work Commission website.

As stated in the guidelines, the worker retention payment has been designed to account for the final outcomes of the review. Specifically, if the Children’s Services Award 2010 wages:

  • Increase by less than the amount provided by the worker retention payment – the amount you must pay above award will reduce by an amount equivalent to the award increase. For example, if the award increases by 6%, employers will still need to pay 4% above the award until 1 December 2025.
  • Match the amount provided by the worker retention payment – the award can serve as a compliant instrument for the purpose of eligibility. The review is not considering the Educational Services (Teachers) Award 2020. You will still need an alternative compliant workplace instrument for workers covered by this award.
  • Exceed the amount provided by the worker retention payment – the minimum rates in the guidelines will be replaced with the new award rates.

We are monitoring the proceedings closely and will make any necessary changes quickly.

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