A short window to keep the worker retention payment
The Australian Government has extended the worker retention payment for early childhood education and care (ECEC) services to 30 June 2028, committing $3.6 billion. Current grant agreements are scheduled to end on 30 November 2026. Providers do not need a new application to continue from 1 December 2026, but they must accept an extension offer, which is now available in the grants portal. Providers who do not accept will see their current agreement end under its existing terms.
What providers must lodge by 28 February
To continue without disruption, providers should:
- accept the extension offer by mid-December 2026
- have an updated workplace instrument approved by the Department by 28 February 2027
- keep meeting all grant conditions, including a new safety standards condition from 1 July 2027.
The updated instrument must require pay of at least 15 per cent above Applicable Award rates from 1 December 2026, stay in place until at least the end of the grant period and cover at least 95 per cent of eligible ECEC workers at the service.
What happens if the paperwork runs late
From 1 March 2027, the Department may hold worker retention payment funding until it receives a compliant workplace instrument and completes its assessment. If the instrument is later assessed as compliant, providers may receive backdated payments for the period between 1 March 2027 and the date it is accepted.
Family day care, fee caps and the safety test
Family Day Care and In Home Care services are newly eligible for the worker retention payment if they engage all their educators as employees, and may seek payments backdated to July 2026.
Services already receiving the payment must not lift fees by more than 5.8 per cent between 8 August 2026 and 7 August 2027. Services joining the program must meet the same cap between 17 June 2026 and 7 August 2027. From July 2027, services that are not ‘Meeting’ Quality Area 2, which covers child health and safety under the National Quality Standard, may have their funding cut or suspended. Applications close on 30 April 2028 and the program ends on 30 June 2028.
Related: Centrepay payments for certain goods and services end 1 November 2026
General information only, not legal advice. Check the official source before acting.
Source: Department of Education and worker retention payment program page. Licence: CC BY 4.0.
