Expanded access to worker retention payment for eligible ECEC services

More early childhood education and care (ECEC) services may now qualify for the Australian Government’s worker retention payment, following an update to eligibility criteria.

From 1 December 2025, ECEC services that previously exceeded the annual fee growth cap may become eligible if they comply with a new combined cap over a two-year period.

Under the original program, services were ineligible if they raised fees by more than:

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

The updated criteria introduce a combined cap for the two-year period:

• Services may now qualify if their total fee increase over both years does not exceed 8.6%, and the increase from 8 August 2025 to 7 August 2026 does not exceed 4.2%.

This means services that exceeded the initial cap for the first year may still participate, provided their overall fee growth remains within the revised limits.

Eligible providers can apply for newly qualifying services from 1 December 2025. These services will not receive funding for the first year of the program but will become eligible from the second year, provided they meet the fee growth conditions.

All other services remain subject to the original annual caps and funding arrangements. Providers may still apply for an alternative fee growth cap in limited circumstances where financial viability is affected.

This change is designed to:

• Enable more providers and services to participate in the worker retention payment program
• Support wage increases and retention of early childhood educators and staff
• Help keep early learning and care fees affordable for families
• Maintain equity for services that joined the program earlier and stayed within the original caps

For further details and to apply, providers can visit the Department of Education’s official website and access updated guidance on worker retention payments.