Funding reforms for early learning services in 2027
The NSW Government announced funding reforms for early learning services from 1 January 2027. New programs will ensure funding is fairer, more consistent and sustainable so all families can access high quality, affordable early learning.
12 August 2026
Information for early learning services
There is no impact to the funding already allocated to early learning services in 2026. Funding arrangements for the 2026 Start Strong program, Mobile Preschool Funding Program and Disability and Inclusion program remain in place.
More information about 2027 program arrangements, including funding rates, will be shared with the release of the 2027 program guidelines to ensure services know what to expect and can plan ahead.
Not-for-profit preschools (operating as community preschools)
The new Universal Preschool Funding program will replace the Start Strong for Community Preschools program in 2027, taking an important step towards achieving universal access to early learning for 3 and 4-year-old children.
- 3 and 4-year-old children will be funded at the same rate from 1 January 2027, supporting high quality early learning in the 2 years before school. Currently, 3-year-old children are funded at a lower rate.
- Program payments will change from 1 January 2027. Funding will reflect the expected operating costs of services, including staffing levels appropriate for the service enrolments and required ratios, industrial award rates and conditions, and other operating costs required to deliver safe and inclusive early learning.
- Funding to staff ratio will include a mandated pay increase for early learning staff and may be used towards a mix of non-contact cover time, director and administration roles. Services that currently operate significantly above the required staff-to-child ratio should plan for any adjustments to operate within this funding framework. Adjustments may include increasing the number of children in priority cohorts that are enrolled, including children eligible for the new Disability and Inclusion Program or enrolling more 3-year-old children who now receive equivalent funding to 4-year-olds.
- Services operating as standalone preschools will receive additional resourcing.
- The new funding arrangements consider most operational costs incurred for the delivery of high-quality early learning. For services choosing to charge fees to offer additional resources, eligibility of funding will require out-of-pocket costs for families to be capped at their current rate or a maximum of $20 per day.
- Funding will be contingent on services meeting strict quality standards.
The new funding model aims to provide stable and fair support based on service needs and encourage more enrolments in underserved areas to help more children benefit from early learning. It will also reflect the rigorous staffing requirements under the National Quality Framework where NSW has the strongest staffing ratios for preschool aged children in Australia.
The Expanded Quality Access program will continue to assist not-for-profit preschools to offer longer hours and cater for more children. Applications for this program are open until 30 November 2026.
Long day care services
The NSW Government will continue supporting the long day care sector through an increase in fee relief funding. The new Fee Relief for Long Day Care program will replace the Start Strong for Long Day Care program in 2027.
- Increase in fee relief funding for eligible children attending long day care to support with the cost of preschool, including a continuation of fee relief funding for 3-year-olds. Services will only be eligible for fee relief if they provide a preschool program. Eligible families will also continue to receive the Australian Government’s Child Care Subsidy.
- Program payments for long day care services will cease in December 2026. The Australian Government remains the primary funder for long day care and will continue investing significant funding to support families’ access to childcare through the Child Care Subsidy.
Mobile preschools
Mobile preschools will continue to be supported in 2027 through funding that recognises additional costs of operation.
Disability and Inclusion program
Reforms to the Disability and Inclusion Program for not-for-profit and mobile preschools will support an expanded focus on inclusion to better align with the approach to inclusion set out in the Early Years Learning Framework. The changes will be delivered alongside the new Universal Preschool Funding program.
From 2027, the program will be delivered through a tiered system of funding and capability building supports, better aligned to the range of children’s needs and circumstances. Changes will also allow for an increase in the maximum support by up to 25% for some children.
Elements of the current program will be retained, including capability building support for services and additional funding for specialised equipment where required.
Early learning services approved for the Child Care Subsidy (CCS) can access support through the Australian Government’s Inclusion Support Program (ISP).
Information for parents and carers
From 2027, the NSW Government will reform funding arrangements for not-for-profit preschools to cover most operational costs, allowing families to access fee-free or low-cost preschool for 3 and 4-year-old children.
Services that choose to charge fees to offer additional resources will have out-of-pocket costs for families capped at their current rate, or a maximum of $20 per day for all other providers.
Funding for an additional day of preschool, going from 2 to 3 days per week, will be offered to priority cohorts.
The NSW Government’s new Fee Relief for Long Day Care program will provide increased fee relief funding for eligible preschool aged children attending long day care in 2027, to support families with the cost of preschool. Eligible families will also continue to receive the Australian Government’s Child Care Subsidy. This will be paid to long day care services and passed on to families as a reduction in out-of-pocket fees.
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