Funding, support and administration

Information on funding and support available for early childhood education and care services during COVID-19, plus information on business arrangements.

Who will cover the costs of shutting services or restricting enrolment?

The Department will maintain Start Strong payments for community preschools through to 31 December 2020 based on information provided in the August 2019 Annual Preschool Census. This will support funding continuity and viability for services impacted by COVID -19 such as through reduced enrolments.

For mobile preschools on contracts, funding arrangements remain in place as outlined in your funding agreement, which has been extended through to 30 June 2021 to support funding continuity and viability.

Start Strong funding should be used to meet standard operating costs, such as staffing, rent/lease or other fixed costs. Where possible, Start Strong funding should continue to be used to reduce costs to families as much as possible.

Scheduled quarterly payments for Early Childhood Education funded programs will continue to be progressed. This includes Start Strong for community preschools, mobile preschools on contract, Start Strong Pathways, and High Learning Support Needs (HLSN) funding and Minor Capital Works funding available through the Disability and Inclusion Program.

Commonwealth funded services, including those who receive Child Care Subsidy (CCS) should contact the Australian Government for further advice and information.

Further assistance is also available to support business continuity for small to medium businesses as part of the stimulus packages announced by the Australian Government.

Community preschools and mobile preschools experiencing severe financial hardship can contact the Department on 1800 619 113 or ecec.funding@det.nsw.edu.au.

Temporary voluntary closures

The current advice is that Early Childhood Education services should continue to operate to support families.

The decision to maintain funding for community preschools under Start Strong and mobile preschools on contracts to the end of the year is designed to support services to continue to operate during adverse circumstances, wherever that is appropriate and possible, and where continued operation is consistent with advice from Government.

Start Strong funding should be used to meet standard operating costs, such as staffing, rent/lease or other fixed costs. Where possible, Start Strong funding should continue to be used to reduce costs to families as much as possible.

To receive funding during any period of temporary closure, there is an expectation that services will continue to provide education support to children and families. This support may be determined by the circumstances of the service and the needs of families and the community. Start Strong funding should continue to be directed to standard operating costs during any period of temporary closure.

In situations of temporary voluntary closure the Department may seek information from funded services to confirm ongoing availability of funding.

Financial accountabilities will remain in place for Start Strong funding. Services will be required to demonstrate how funding has been utilised, including for any period of temporary closure.

We had reduced enrolments during the August 2020 preschool census, will this reduce our funding?

The Department will maintain Start Strong payments for community preschools through to 30 June 2021, including where there is a decline in enrolments during this period.

Start Strong Preschool payments will be made irrespective of potential service impacts due to COVID-19. The July and October 2020 payments will be calculated based on the 2019 census enrolment data and paid at 2020 funding rates (including payment of 3 year old non-equity funding). This calculation ensures all community preschools receive no negative variations for the January to December 2020 period.

Payments for the January to June 2021 period will be guaranteed at a minimum funding level set against July to December 2020 payments. No negative adjustments will be made to Start Strong funding allocations for the January to June 2021 period (December 2020 and April 2021 quarterly payments).

The December 2020 and April 2021 quarterly payments will be calculated using information provided in the August 2020 Annual Preschool Census at 2021 Start Strong funding rates. If the proposed funding allocations for this period are lower than payments made to the service in the previous six month July to December funding period (July and October quarterly payments), funding will be guaranteed at the July to December funding amounts.

This will ensure that eligible services still receive any increase in funding, while simultaneously providing funding stability for services that would otherwise receive a decrease in funding.

How will funding be calculated in the next financial year 2021/22?

Start Strong funding for community preschools during the next financial year 2021/22 will revert back to funding calculations prior to COVID-19.

The July 2021 (Quarter 1) and October 2021 (Quarter 2) payment will be paid using the August 2020 Annual Preschool census at 2021 funding rates. The January 2022 (Quarter 3) and April 2022 (Quarter 4) payments will be calculated using the August 2021 Annual Preschool Census paid at 2022 Start Strong funding rates and reflect any adjustments (positive and negative) for the July to Dec 2021 period.

The Department will continue to monitor the impacts of the pandemic on services and will respond to further developments if and when they arise.

What impact will COVID-19 have on ECE services' abilities to comply with contractual acquittals and holding AGMs to sign off on audit reports etc.?

Compliance with financial acquittal requirements is required for continued funding. Due to the impact of COVID-19, the Department has postponed the June 2020 release of the financial accountabilities to enable providers to focus on providing core services. At this stage the Department plans to release these accountabilities towards the end of the 2020 calendar year. You will receive further communication on this as arrangements are confirmed.

Will there be an extension for Community Grants, Quality Learning Environments, Bushfire Relief and Drought Support Payments?

Funds provided under Community Grants, Quality Learning Environments, Bushfire Relief and Drought Support Payments (paid from October to December 2019) were originally required to be spent by 30 June 2020. This date has been extended to 30 June 2021.

Service providers can make a note of any surplus funds when completing the financial accountabilities statements from November 2020.

Preschool fees

National Regulation 168(2)(n) requires services to have policies and procedures on payment of fees and provision of a statement of fees charged by the education and care service.

These arrangements are in place between individual services and families.

For additional assistance, please contact Fair Trading NSW or by phone on 13 32 20 (8.30am to 5pm, Mon - Fri).

Disability and Inclusion program funding arrangements from 1 July 2020

During the April to June 2020 period, High Learning Support Needs (HLSN) funding was maintained with no negative financial adjustment applied for this period to support services during the COVID-19 crisis.

From 1 July to 31 December, no negative adjustments will be applied to HLSN funding for variations submitted for children on extended absence. The purpose of this is to maintain ongoing flexibility in the provision of support to children with a disability enrolled in a preschool program as services and families manage the impacts of COVID-19.

In order to monitor the impact of COVID-19 on participation of children with a disability in community and mobile preschools, services should continue to notify the department of changes in the circumstances of children receiving HLSN funding by submitting a variation in the Early Childhood Contract Management System (ECCMS).

What is the COVID-19 Free Preschool Funding program?

In April 2020 the NSW Government announced additional temporary funding support for community and mobile preschools in response to the COVID-19 pandemic. These services are primarily funded by the NSW Government.

The NSW Government is providing up to $120 million to extend the COVID-19 free preschool program through to the end of 2021.

Start Strong funded community preschools and mobile preschools on contract with the Department of Education will have the opportunity to opt in to the initiative.

Funding will be provided as a top up payment to replace a high proportion of fee income. In turn, services are required to provide at least 15 hours of fee-free preschool per week for families.

Support provided under the Australian Government’s JobKeeper program is taken into account before any additional funding support is provided.

Funding has been provided for terms 2, 3 and 4 in 2020. Additional funding of up to $120 million has been announced to continue the program throughout 2021.

Information will be collected from services to support payments for Terms 3 and 4 2020 and Term 1 2021, including where their circumstances have changed.

More information on the program is available:

How do services receive the funding?

Start Strong funded community preschools and mobile preschools on contract with the Department of Education have the opportunity to opt in to the initiative.

Information on payments available to individual services and opt-in arrangements for 2021 will be sent directly to mobile and community preschools shortly.

More information on the program is available:

Can I still opt-in to the program for 2020?

The opt in and payment confirmation process for terms 2, 3 and 4 2020 will remain open until 20 November 2020. Information on the program is available in the Program Guidelines.

Why is the COVID-19 Preschool funding program only offered to community and mobile preschools?

NSW is the primary funder of community and mobile preschools.

Children attending preschool programs in long day care services are eligible for funding from the Australian Government.

The Australian Government provides a range of funding and supports to services, including Long Day Care through the Child Care Subsidy (CCS).

Both the NSW and Australian Governments are continuing our work to maintain participation rates for early childhood education.

This work is vitally important, especially considering the funding linked to enrolments under the Universal Access National Partnership.

What funding is available for other service types?

The Australian Government provides a range of funding and supports to services, including Long Day Care, Out of School Hours Care and Family Day Care providers, through the Child Care Subsidy (CCS).

Families impacted by the COVID-19 pandemic can also access additional Child Care Subsidy from the Australian Government.

What happens if the number of enrolments at my service has changed?

Payments under the COVID-19 Free Preschool Funding Program will account for increases in Term 3 or Term 4 enrolments, using information provided in the 2020 Annual Preschool Census.

Payments for any additional enrolments will be calculated proportionately to the increase in enrolments and will continue to take account of the value of JobKeeper payments.

For example, if a service has an increase in eligible enrolments of 10%, the maximum payment amount under the COVID-19 Free Preschool Program will increase by 10%. The actual value of the top-up amount paid to a service will continue to be determined taking account of the value of their JobKeeper payments.

Any payment for additional enrolments will be made in December 2020 following the validation of 2020 Annual Preschool Census Data.

What additional funding is available for NSW Local Government early childhood education services?

The NSW COVID-19 Local Government payment program provided funding for local government early childhood services as they were not eligible for the Australian Government’s JobKeeper program.

Councils who opted into this funding were required to remain open and provide services. An initial payment was made to eligible Local Government providers in June 2020 for the period 6 April to 3 July.

From 20 July 2020 local government run services had access to the same financial relief as all other CCS approved services. Given the equitable treatment of local council services under the new Australian Government arrangements, a final payment was made to local councils for the period 4 to 19 July. From that time NSW ceased its temporary Local Government COVID-19 program. The Local Government Working Group was consulted about this change.

From 20 July, Local Government services were eligible to receive the Commonwealth’s transition payment of 25% of fee revenue (up to daily cap) from the reference period prior to COVID-19. This payment is in addition to regular CCS payments and parent fee revenue.

Australian Government CCS payments resumed from the 13 July and transition payments began on 20 July.

NSW COVID-19 Local Government payments for the period 6 April to 3 July were made to local councils in mid-June 2020. A payment for the period 4 to 19 July 2020 was paid to eligible local councils in July 2020.

I am a parent/guardian and would like more information about the COVID-19 Free Preschool Funding Program

There are approximately 738 community and mobile preschools in NSW who are eligible to receive funding under this program. These services are primarily funded by the NSW Government to deliver preschool to children aged 3 and above. A list of services is available in the Department’s website here.

Community and mobile preschools receive funding from the Government but are operated independently, and are responsible for making their own decisions in consultation with their communities. This includes setting fees, managing enrolment, staffing decisions and determining other operational arrangements such as the days and times the service operates.

Under this program, funding is provided as a top up payment in addition to other funding the service usually receives from the NSW Government to support the operation of the preschool. The purpose of this funding is to replace a high proportion of fee income.

In return for receiving this additional funding, services are required to provide at least 15 hours of fee-free preschool per week for families who have eligible children enrolled in the service. This is because research shows that participation for 15 hours per week, or 600 hours per year, in a quality early childhood education program in the year before school provides enduring benefits to children well beyond primary school.

Preschools can provide more than 15 hours for free if they choose (for example if current children are enrolled more than 15 hours, they wish to continue this pattern and the service has sufficient funding to do this) or they may charge a fee for any hours of enrolment above 15 hours if they consider this necessary based on the context of their service.

This is an opt-in funding program. That means that it is not compulsory, and providers who are eligible to receive funding will make a decision about whether they choose to receive this funding. You should contact preschools directly for information on their participation in the program and enrolment availability.

Preschools set their own fees, and as a result, fees vary widely. Generally speaking fees in lower socioeconomic areas tend to be lower, while fees in higher socioeconomic areas are higher.

The amount of funding provided to each service will be based on the characteristics of the service and the children attending the service.

Services in lower socioeconomic areas will receive one hundred per cent of the calculated fee income for 2021. One hundred per cent of the calculated fee income will also be provided for all equity children, that is children from families with low income, Aboriginal and Torres Strait Islander children and children with a disability or additional need. This will be done regardless of the socioeconomic profile of the area the service is in. For services in higher socioeconomic areas, a minimum of 80% of calculated fee income will be provided to services.

It is important to ensure that funding is provided equitably, and is focused on those families and communities most in need.

Children attending preschool programs in long day care services are eligible for funding from the Australian Government. The Australian Government provides a range of funding and supports to services, including Long Day Care through the Child Care Subsidy (CCS). These services are not eligible to receive funding through this program.

The COVID-19 Free Preschool funding program is temporary funding that eligible mobile and community preschools are able to access in recognition of the impact of the COVID-19 pandemic.

Early Childhood Education June 2020 Financial Accountability release

Submission of annual financial accountability reports is a requirement under the NSW Department of Education's Grant Programs Terms and Conditions. Financial accountabilities for Early Childhood Education providers who report on a calendar year basis are ordinarily released in June each year.

Due to the impact of COVID-19, the department postponed the June release of the financial accountabilities to enable providers to focus on providing core services.

Accountabilities were released on Monday 9 November 2020 and must be completed by Friday 11 December 2020.

For more information visit Financial Accountability – Information for Services.

I am an ECE provider operating on a NSW school site. Do I need to pay fees?

Services should prepare for license fees to resume from the end of Term 3. The department will continue to assess the impact of COVID-19 on services throughout Term 3 to see what support is needed to help services to stay open for families.

How does COVID-19 impact leave entitlements?

Information regarding the impact of Coronavirus on leave entitlements is available here.

If you have questions relating to staffing issues you can contact the Fair Work Ombudsman for further information.

Does any business insurance cover COVID-19-related temporary closures?

We are not able to provide advice on business insurance. You should contact your insurer or the Insurance Council of Australia for further information.

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