New workforce discount offers practical savings for ECEC staff and helps retain qualified professionals

Early childhood education and care (ECEC) providers will soon be able to offer fee support to eligible employees through a new workforce discount. The measure is aimed at easing costs for families and helping services retain qualified staff.

From 7 July 2025, the Australian Government will require providers to report prescribed provider-funded discounts, including staff fee relief for educators and cooks. This change is part of a broader move to improve transparency and track affordability efforts across the sector.

The workforce discount allows eligible employees to pay a reduced gap fee for their own child’s care, without affecting their Child Care Subsidy (CCS) entitlement. This marks a clear change from how staff discounts have typically been handled.

How the workforce discount works

Under the updated rules, the discount is applied after CCS has been calculated. The full fee is still reported to the CCS system. This ensures:

• The educator retains their full CCS entitlement
• The provider’s CCS income remains unaffected
• The discount is applied only to the gap fee
• The employee pays at least 5 per cent of the gap fee

Services can choose whether to offer the discount, and determine the amount, up to a 95 per cent reduction in the gap. It can be applied to:

• Early childhood teachers and educators
• Centre directors and coordinators with an ECEC qualification
• Cooks working in the service

The child must be enrolled at the same service where the employee works, or another service owned by the provider.

A shift from past practice

Previously, many services offered staff discounts by lowering the total fee charged. This had the side effect of reducing the educator’s CCS amount. Providers would often absorb the shortfall themselves.

The new model avoids that problem. By reporting the full fee and applying the discount afterward, educators retain their full subsidy and services are not penalised. It also allows for clearer record-keeping through formal CCS session reporting.

For more detail on the reporting shift, see our earlier explainer: What’s changing with prescribed discounts and why it matters.

Examples show potential savings

Examples from the Department of Education show how the discount could help staff:

• Afsa, an early childhood teacher with a CCS rate of 85 per cent, receives a 95 per cent discount on the gap. She pays just $4.50 per week for full-time care, saving $85.50.
• Mark, a cook with a CCS rate of 60 per cent, receives a 75 per cent discount. He pays $22 per week, saving $66.
• Priya, a centre director, pays only $15 per week for five OSHC sessions thanks to a 90 per cent discount, saving $135.

What providers need to know

From 7 July, services will be required to report:

1. Whether a prescribed discount has been applied
2. The type and value of the discount, at session level

This will apply to all CCS-approved software and through the Provider Entry Point. Providers will also need to include this information in fortnightly family statements and maintain records for compliance.

Other provider-funded discounts, such as enrolment incentives or loyalty offers, may still be reported voluntarily. However, unlike workforce discounts, these reduce CCS entitlements.

More information

This update forms part of a broader effort to strengthen the ECEC workforce. It complements other initiatives such as fee-free TAFE, paid practicums and scholarship programs.

Full details, including session reporting requirements and examples, are available on the Department of Education website.