From today, early learning providers can apply for Commonwealth Government funding to deliver early childhood education and care workers a historic 15 per cent pay rise.

To be eligible to receive the Albanese Government’s funding for the wage increase, early childhood education and care services must agree not to increase their fees by more than 4.4 per cent between 8 August 2024 and 7 August 2025.

This is good for early childhood educators and good for families.

There will also be a limit on fee growth in the second year of the wage subsidy. The percentage limit on fee growth that will apply from August 2025 will be determined by a new ECEC cost index being developed by the Australian Bureau of Statistics (ABS).

This is an important condition that will keep downward pressure on out-of-pocket costs for families.

Services must also pass on funding in full to employees through increased wages.

The 15 per cent pay rise will be phased in over two years, starting with a 10 per cent increase from December 2024, with a further 5 per cent increase from December 2025.

This means a typical early childhood educator who is paid at the award rate will receive a pay rise of more than $100 per week this year, increasing to more than an additional $150 per week from December 2025.

This significant wage increase is an important next step in the Government’s reforms to the sector, building on the successful Cheaper Child Care policy.

Latest data shows that Cheaper Child Care has seen the average out-of-pocket costs for families decrease by more than 13 per cent from the June quarter 2023 to the June quarter 2024.

The Government’s Cheaper Child Care policy increased the base subsidy rates from July 2023 for all families earning up to $530,000, and set the maximum subsidy to 90 per cent for families earning $80,000 or less.

Thanks to the increased subsidy, a family earning $120,000, with one child in care three days a week, paid around $2,140 less last financial year than they otherwise would have.

The Government is currently considering the Productivity Commission’s report handed down earlier this month.

For further information on the 15 per cent wage increase, grant eligibility and how to apply visit How to apply for the worker retention payment.

Quotes attributable to Prime Minister Anthony Albanese:

“Early educators shape lives and change lives. They deserve more than our thanks - they deserve to be paid fairly.

“Parents want their children to be safe, happy and to have the very best start in life. This funding is about fair pay for the people who make this possible.

“Importantly, we’re making sure that our early educators are getting fair wages without putting cost of living pressure on families.

“This is part of our Government’s agenda to make sure that Australians are making more and keeping more of what they earn, while providing that vital cost of living relief.”

Quotes attributable to Minister for Education Jason Clare:

“The child care debate is over. It’s not babysitting. It’s early education and it’s critical to preparing children for school.

“They lift our kids up and now we are lifting their pay.

“This means wages up for workers and keeping prices down for families.

“A pay rise for every early childhood educator is good for our workforce, good for families and good our economy.”

Quotes attributable to Minister for Early Childhood Education and Minister for Youth Anne Aly:

“We’re boosting the wages of early childhood education workers, while relieving cost of living pressures on Australian families.

“Properly valuing the early childhood education and care workforce is crucial to attracting and retaining workers and vital to achieving the quality universal early learning sector Australian families deserve.

“A quality early childhood education sector is necessary to support children's learning and development as well as workforce participation in the broader economy – particularly for women.

“I urge all eligible early learning services to sign up to this important initiative, so their hardworking staff get the full benefit of this wage increase.”