Start Strong for community preschools funding information: 2017 to 2019

This page includes information relating to the introduction of Start Strong in 2017, and introduction of funding subsidies for non-equity three-year-old children in 2019.

Introduction of Start Strong Funding

The 2017 spending rules for the introduction of Start Strong stipulated that:

  • services were required to pass through at least 75 per cent of the increased funding to families by lowering their daily fees. To determine the value of the funding increase, funding received by preschools from 1 January 2017 to 31 December 2017 was compared to the amount they received in 2016 under the Preschool Funding Model (PFM), pro-rata.
  • daily fees for children with disability and additional needs and children from low income, and Aboriginal and Torres Strait Islander families (equity groups) had to be lower than non-equity children's daily fees. If a service's daily non-equity fee was lower than its daily equity fee, the service was expected to redistribute the funds more heavily towards the equity daily fee.

The department monitored fee pass through by comparing a service's reported fees in the August 2016 Preschool Census (baseline) against the data collected in the August 2017 Preschool Census. The fee pass through amount must be 75% of the increase in annual funding (comparing the period Jan-Dec 2016 and Jan-Dec 2017).

In exceptional circumstances where the preschool could not reduce fees by at least 75% of the increase, a justification was required to be provided. This included preschools where fees were already low and they could not pass through all 75% of the increase in funding.Spending rules

The 2017 spending rules for the introduction of Start Strong stipulated that:

  • services were required to pass through at least 75 per cent of the increased funding to families by lowering their daily fees. To determine the value of the funding increase, funding received by preschools from 1 January 2017 to 31 December 2017 was compared to the amount they received in 2016 under the Preschool Funding Model (PFM), pro-rata.
  • daily fees for children with disability and additional needs and children from low income, and Aboriginal and Torres Strait Islander families (equity groups) had to be lower than non-equity children's daily fees. If a service's daily non-equity fee was lower than its daily equity fee, the service was expected to redistribute the funds more heavily towards the equity daily fee.

The department monitored fee pass through by comparing a service's reported fees in the August 2016 Preschool Census (baseline) against the data collected in the August 2017 Preschool Census. The fee pass through amount must be 75% of the increase in annual funding (comparing the period Jan-Dec 2016 and Jan-Dec 2017).

In exceptional circumstances where the preschool could not reduce fees by at least 75% of the increase, a justification was required to be provided. This included preschools where fees were already low and they could not pass through all 75% of the increase in funding.

A preschool did not have to reduce its fees if it did not receive a funding increase under Start Strong.

For example, a preschool received $100,000 in 2016 under the Preschool Funding Model (PFM). This preschool then received $160,000 in 2017 under Start Strong. This meant that the preschool received a funding increase of $60,000 ($160,000 less $100,000) and it was expected to use 75% (or $45,000) of this funding increase to reduce fees during 2017.

The $10 daily fee for equity children is not mandatory. The department encourages preschools to lower equity daily fees as much as possible so that affordability is not a barrier to early childhood education for the most disadvantaged children in NSW.

A preschool did not have to reduce its fees if it was receiving Service Safety Net funding.

However, a preschool that was eligible for the Service Safety Net but received funding greater than the Service Safety Net, was required to pass through 75% of the funding amount that exceeded the Service Safety Net.

2019 Funding Subsidy: non-equity three-year-old children

Funding for non-equity 3-year-olds attending community preschools was introduced in 2019 as part of the NSW government’s extension to Start Strong announced in the 2018-19 Budget.

Priority of Access guidelines have continued to apply under Start Strong, with priority given to children in the year before school and children in greatest need. These guidelines were aligned with our obligations under the National Partnership Agreement, to ensure universal access to early childhood education for all children enrolled in the year before school for 600 hours, and a focus on ensuring participation of Aboriginal and Torres Strait Islander children and disadvantaged children.

To support the ongoing prioritisation of these groups, under the 2019 funding arrangements, subsidies for non-equity 3-year-olds were set at a proportion of the equivalent year before school base rate.

This funding was escalated over four years: 25 per cent in 2019, 30 per cent in 2020, 40 per cent in 2021 and 50 per cent in 2022.

The table of sliding scale subsidy rates is below:

Year Subsidy (% of YBFS rate)
2019 25%
2020 30%
2021 40%
2022 (and ongoing) 50%
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