Unpacking the 2027 inclusion funding changes for NSW preschools

NSW community and mobile preschools will move to a tiered inclusion funding model in 2027, with new applications required for all children and the first deadline on 4 December.

The NSW Department of Education has published its 2027 Inclusion Funding Program guidelines ahead of the January commencement.

The program replaces components of the Disability and Inclusion Program from January. Funding already allocated for 2026 is unaffected.

The changes follow The Sector’s coverage of concerns about NSW preschool funding reforms.

Funding targets community and mobile preschools

The program is available to operational not-for-profit community and mobile preschools approved under Universal Preschool Funding or Mobile Preschool Funding.

Funding goes to preschools to support individual children’s participation through their Individual Learning Plans (ILPs). Children generally must turn three by 31 July in the preschool year, with limited exceptions.

Child Care Subsidy-approved places and hours are excluded. Services seeking inclusion support for those places may be eligible under the separate Australian Government Inclusion Support Program.

Additional inclusion funding available through two tiers

Tier 1 support is provided through Universal Preschool Funding or Mobile Preschool Funding and additional inclusion funding is assessed under Tier 2 or Tier 3.  All funding amounts exclude GST.

The new model assesses the adjustments children need to participate in the preschool program:

• Tier 2: $9.63 an hour for children requiring frequent individual support in some functional domains.
• Tier 3: $28.88 an hour for children requiring substantial and constant individual support across most or all functional domains.

Both tiers allow up to 750 funded hours per child annually. 

Under the 2026 High Learning Support Needs program, the rate was $27.57 an hour for up to 600 hours, or $16,542 per child annually.

Eligible preschools whose combined Tier 2 allocation falls below $10,830 receive that minimum amount. The floor applies per preschool, not per child, and requires no separate application.

The published program funding range increases from approximately 60–75 million under the 2026 High Learning Support Needs program to 81–91 million in 2027. Individual preschool allocations depend on assessed support needs and approved hours.

Spending flexibility and equipment support

Preschools can use approved Tier 2 and Tier 3 funding across eligible children and across additional staffing and activities associated with developing, delivering and reviewing their ILPs.

Funding cannot cover existing staffing costs required to meet minimum ratios or unrelated general administration.

A separate Specialised Equipment Funding Program offers up to $7,500 per eligible child annually, or per application involving multiple children. Higher amounts may be considered in limited exceptional circumstances.

Funding for minor construction and the 2026 Inclusion Readiness stream will cease.

Preparing an application

Preschools seeking funding for 2027 need to:

• Check service and child eligibility against the new guidelines.
• Prepare a new application for each child, including those funded in 2026.
• Gather supporting evidence and explain the adjustments and support hours required.
• Submit through the Early Childhood Contract Management System (ECCMS) by 5 pm on Friday 4 December 2026 for the first funding round.

Sector Capacity Building providers can help services prepare applications and develop ILPs.

Quarter 1 outcomes and payments are scheduled by 31 March 2027.

Eligible annual applications submitted by 9 April 2027 can be backdated to the child’s 2027 enrolment start date, subject to the funding limit.

Access the guidelines, factsheet and specialised equipment funding information here.