COVID-19 free preschool funding program for community and mobile preschools - guidelines

This page describes the objectives, process, funding conditions and spending rules for the COVID-19 free preschool funding program for community and mobile preschools.

Note: The department is working with sector representatives to finalise program implementation, including these program guidelines. Guidelines may change as implementation arrangements are finalised. Please check this page to ensure you have the most up to date version.

Program overview

Preschools operating in NSW have been affected by COVID-19 due to significant reduction in enrolments. As a result, time-limited payments will be made to community preschools and mobile preschools to support staff retention and provide free preschool to local families.

Funding is being provided as a top up payment to replace a proportion of fee income that is being lost as a result of decreasing enrolments due to the COVID-19 pandemic.

Start Strong funding and mobile preschool contract funding provided by the NSW Government and support provided under the Australian Government’s JobKeeper program will be taken into account before any additional funding support is provided.

This will maintain the viability of the community preschool sector, support the retention of the workforce and provide relief in cost of living pressures to NSW families by making community and mobile preschool free for children in NSW for up to six months (Terms 2 and 3).

Service eligibility criteria

Start Strong funded community preschools and mobile preschools on contracts are eligible to opt in to receive funding under this program.

Funding available

Services are guaranteed to receive Start Strong funding or mobile preschool contract funding based on August 2019 enrolment levels, paid at 2020 funding rates. In addition to this, the COVID-19 Free Community Preschool funding program is designed to replace a reasonable level of fee income so that free preschool can be offered.

If you opt-in to participate in this program, the maximum additional funding you will be eligible for will be 100% of your half year fee income, based on data you provided in the August 2019 Census (with a 2% indexation rate applied).

The minimum additional funding you will be eligible for will be 80% of your half year fee income, based on data you provided in the August 2019 Census (with a 2% indexation rate applied).

Funding will be paid to each service up to a $34 daily fee cap for each of the following cohorts:

  • equity children aged 3 years and above
  • non-equity children aged 4 years and above
  • non-equity children aged 3 years.

For example, where services are not eligible for JobKeeper, they will be eligible to receive between a minimum of 80% and a maximum of 100% of fee income for terms 2 and 3 calculated based on data from the 2019 August Annual Preschool Census (with 2% indexation applied).

Example:

Based on 2019 census data, the fee income estimated for terms 2 and 3 is $100,000 (including 2% indexation).

If the average daily fee for all eligible cohorts is $34 or less, then the service will receive the full amount of $100,000 across the two terms.

If the average daily fee for one or more eligible cohorts is above $34, then the service will receive at least $80,000 across the two terms.

Interaction with the Australian Government’s JobKeeper program

Services eligible for JobKeeper must enrol in JobKeeper in the first instance.

It is important that you work through the JobKeeper program information to ascertain if your service is eligible to receive these payments. JobKeeper payments may apply for the period from 30 March to 27 September, and provide up to a total of $19,500 per eligible employee over a six month period. The enrolment process for JobKeeper is now available on the ATO website.

Funding under the COVID-19 Free Preschool funding program may be provided as a top up to the Australian Government’s JobKeeper program where the funding received through JobKeeper is less than the amount the service is eligible to receive under the COVID-19 Free Preschool funding program.

As a result, the funding support you receive may be provided through a combination of JobKeeper and/or the COVID-19 Free Preschool funding program.

For those services receiving JobKeeper payments, if the JobKeeper payments received from the Australian Government are greater than the amount of maximum funding the service is eligible to receive through this additional State funding, the service will not be eligible for additional funding.

If the JobKeeper payment is providing less than the service would have been eligible to receive through this State funding, the service can receive a top-up amount up to the maximum amount.

The following table shows the impact on funding for two services that receive $85,000 in JobKeeper payment:

Service A Service B

Fee income with $34 daily fee cap

$100,000

$80,000

Less JobKeeper payment

-$85,000

-$85,000

Final State funding

$15,000

$0

Service B did not receive any top-up funding as their JobKeeper payment was greater than their fee income with a $34 cap.

Services eligible for JobKeeper payments are required to apply for JobKeeper in the first instance before additional State funding will be provided. Payments of additional State funding for service enrolled in JobKeeper will be calculated and adjusted by the amount of JobKeeper funding once this information is available.

Opt-in process

A simple opt-in enrolment process is available through SmartyGrants.

There is currently no closing date for Approved Providers to opt-in. The Department encourages providers to respond as soon as possible. The timing of payments may be impacted based on the timing of information received from Providers.

Funding conditions

Services must comply with the following conditions:

  • Enrol in the JobKeeper program in the first instance if you are eligible.
  • Remain open and available (unless on public health advice).
  • Provide at least 15 hours of free preschool to families.
  • Retain staff where possible.
  • Prioritise access for children of essential workers, vulnerable and disadvantaged children and existing enrolments.
  • Provide suitable outreach (or distance education) to children who are enrolled but not physically attending.

The program requires a minimum of 15 hours of free preschool as this is consistent with the Start Strong program and is commonly used as the benchmark in the sector.

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). Services may charge a fee for any hours of enrolment above 15 hours if they consider this necessary based on the context of their service.

Any child currently enrolled for up to 15 hours per week in Terms 2 and 3 is eligible to receive free preschool for that enrolment. Fundraising activities and donations are permitted.

The department is not prescribing how services provide outreach, but examples of how this can be done are on this page.

Free preschool for at least 15 hours per week, is a requirement under this funding. If a service does not opt in, it may still offer free preschool to meet the needs of local families.

Payments

Payments commenced to eligible community preschool and mobile preschool services from May 2020.

Adjustments to funding may be made where the circumstances of services change, for instance where there is an adjustment to JobKeeper payments during this period.

Funding will continue to be available to services in Term 3. Information will be collected from services to support payments for term 3, including where their circumstances have changed.

Spending rules

The activities funded under this program must commence during the 2019/20 financial year, and all funds must be expended by 31 December 2020.

Services in receipt of this funding are required to use it for the operational costs of the preschool that prioritise:

  • free preschool and fee relief for families
  • staff wages to enable retention of the workforce.

Funding agreement and acquittal

Services must have accepted the Early Childhood Education Funding Terms and Conditions:

  • 2019/2020 for Term 2 payments
  • 2020/21 for Term 3 payments

Acquittal of funds will be required following the completion of the 2020 calendar year.

Contact details

To speak to someone about this funding program, please contact the department’s Early Childhood Education Directorate by:

Phone: 1300 755 426

Email: ecec.funding@det.nsw.edu.au

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