The Australian Government is committing $3.6 billion to extend the worker retention payment, supporting a wage increase for early childhood education and care (ECEC) workers through to 30 June 2028.
Family Day Care (FDC) and In Home Care (IHC) services will also become eligible if they engage their educators as employees.
The worker retention payment was introduced in 2024 to attract and retain high-quality ECEC educators.
Family Day Care and In Home Care
FDC and IHC services that engage all their educators as employees will be eligible for the worker retention payment.
These services must meet the grant conditions, including:
- limiting fee growth by a set percentage
- engaging workers under an eligible workplace instrument.
Eligible services may seek payments backdated to July 2026.
We will provide more information on applications for FDC and IHC services soon.
Fee growth cap
To get the worker retention payment, services must limit fee growth by a set percentage. The fee growth cap will continue under the extension to support affordability for families.
Services that already get the worker retention payment must not increase their fees by more than 5.8% between 8 August 2026 and 7 August 2027.
Services that wish to join the program, including FDC and IHC services, must not increase their fees by more than 5.8% between 17 June 2026 and 7 August 2027.
Strengthening quality and safety
We are also strengthening child safety through the worker retention payment.
From July 2027, services that are not ‘Meeting’ Quality Area 2 relating to child health and safety under the National Quality Standard may have their funding cut or suspended.
More information
We will provide more details over the coming weeks. To get the latest updates: