Understanding reserved and surplus funds

The fee relief payment aims to make early childhood education more affordable by lowering daily fees for 600 hours of enrolment per year for eligible children.

Surplus funds are funds remaining after fee reductions for eligible children. They can also arise with enrolment changes occurring within a term.

These funds must first be used to lower additional charges like resources or excursion fees. If all fees and charges are reduced to zero, providers can use the remaining funds to lower costs for extra enrolment hours, support children not receiving fee relief, or cover operating expenses.

Reserved funds are set aside when fewer children use fee relief than expected and can only be used if a new eligible child claims fee relief.

Fee relief in practice

In 2024, Happy Learners Community Preschool had 25 children enrolled for 600 hours or more at their service at the time of the Annual Preschool Census. This data is used by the department to calculate the service’s Fee Relief Payment funding for 2025.

Term 1

In 2025, Happy Learners received Start Strong Fee Relief Payment for 25 children ($4,347 per child or $1,086.75 per child per 10 week term). Only 20 children were enrolled and claimed fee relief during Term 1. This means that 20 children received fee relief funding. The fee relief for the remaining 5 places became reserved fee relief funds, where 5 places worth of reserved fee relief funds equates to $5,433.75 ($1,086.75 x 5 = $5,433.75)

Term 2

At the start of Term 2 2025, Happy Learners receives 2 new enrolments who complete a declaration form to receive Start Strong Fee Relief. Happy Learners now have 22 children claiming fee relief and they now have 3 fee relief places as reserved fee relief funds.

Term 3

In Week 4 of Term 3 2025, another child who was receiving fee relief left the service. Happy Learners reserved the fee relief funding allocated for this place. In Week 7, a new family was welcomed and decided to claim fee relief. Happy Learners applied the reserved fee relief funding to reduce this child’s fees from week 7 to the end of the term. The fee relief funds that were reserved for weeks 5 and 6 became surplus fee relief funds.

In Week 8 of Term 3 2025, a child who was receiving fee relief, left the service. Happy Learners reserved the remaining two weeks of fee relief funding allocated to that child. That place was not filled during the remainder of Term 3. At the end of Term 3, the 2 weeks of reserved fee relief funds become surplus fee relief funds.

This means at the end of Term 3 there are now 3 reserved fee relief places, 1 fee relief place that has become surplus fee relief and 21 children claiming fee relief (from a total of 25 fee relief funded places). The amount of reserved fee relief for Term 3 totals $3,260.25 (1,086.75 x 3 = $3,260.25)

Term 4

At the start of Term 4 2025, Happy Learners have 21 children claiming fee relief and 4 fee relief funded places that are considered as reserved fee relief funds totalling $4,347 ($1,086.75 x 4 = $4,347). There are no enrolment changes in Term 4.

The end of year result

Reserved funds

The table below outlines the reserved fee relief enrolment pattern for Happy Learners at the end of each term.

These reserved fee relief funds for the program year will need to be returned to the department. This will be captured in the financial accountability completed by the service.

Surplus funds

Throughout the year Happy Learners experienced short periods of vacant enrolments. The fee relief funds that were reserved for these periods became surplus funds, with 4 weeks of fee relief funds in total.

Happy Learners used the funds to reduce the cost of additional charges to families accessing fee relief, in line with the Fee Relief Payment spending rules.

Reporting fee relief data

The 2024 fee relief data reporting process for community preschools has been simplified, making it easier to report fee relief data, and determine eligible fee relief top up payments.

Submitting fee relief data is now voluntary. Approved providers only need to complete a fee relief data submission if their enrolments claiming fee relief were higher than their 2024 fee relief funding allocation, and a top-up payment is required.

Approved providers can submit a single fee relief data submission for their service from early 2025 for the program period 1 January to 31 December 2024.

Services that do not submit fee relief data, or submit inaccurate data, cannot be considered for a top up payment.

Steps for reporting fee relief data

• The department will notify providers once the fee relief data submission opens in early 2025 (for the 2024 program year).

• Providers will need to complete 1 submission for each service they identify requiring a top-up payment. The collection will be completed via SmartyGrants.
  

• The submission will require information on enrolments across the 2024 calendar year, fee relief funding allocations, and fee relief expenditure.

Reporting reserved and surplus funds

Services will be able to report 2024 fee relief reserved and surplus funds as part of the annual financial accountability process. Instead of offsetting reserved fee relief funds against future payments, reserved fee relief funds will be returned via a refund.

More details about this process will be communicated soon.

Contact

Get in touch with the Early Childhood Education Information and Enquiries team:

• 1800 619 113

• ecec.funding@det.nsw.edu.au.