In late 2024, the Australian Government announced a 15% wage increase for early childhood educators. The so‑called “15% grant” is actually a government‑funded wage subsidy that delivers a permanent 15% pay rise for early childhood educators. Services must apply for the funding, agree to fee‑cap conditions, and pass the increase directly to staff. Once the grant period ends, the wage rise remains in educators’ pay packets, but services lose the subsidy and must sustain wages through normal operations.
What the 15% Grant Really Is
- It is not a one‑off bonus but a government‑funded wage increase for early childhood education and care (ECEC) workers.
- The Albanese Government structured it as a staged rollout, with the final 5% delivered in December 2025, completing the full 15% rise.
- For a full‑time educator, this equates to about $160 extra per week, and for early childhood teachers, around $316 extra per week compared to award rates a year ago.
- Delivered in two stages:
- 10% from December 2024
- 5% from December 2025
- Funded through a two‑year government grant that runs until December 2026.
- Services must apply for the funding, agree to fee‑cap conditions, and pass the increase directly to staff.
How Services Get It
- Services must apply for Commonwealth Government funding to deliver the pay rise.
- Eligibility requires agreeing to fee‑cap conditions:
- Fees cannot increase by more than 4.4% between August 2024 and August 2025.
- A similar cap applies in the second year of the subsidy.
- This ensures families benefit from stable fees while educators receive higher wages.
- Application required: Services must formally apply for the grant.
- Eligibility checks: They must agree to fee‑cap conditions (e.g., limiting fee increases to 4.4% between Aug 2024–Aug 2025).
- Compliance rules: All funding must be passed directly to educators — it cannot be absorbed into operating costs.
- Delays: Some services are still waiting due to administrative backlogs, complex paperwork, or confusion about eligibility.
What Services Must Do
- Apply for the grant through government channels.
- Ensure the wage increase flows directly to educators.
- Keep fees within the capped limits during the grant period.
- Maintain compliance or risk losing access to the subsidy.
- Apply for the funding through the government’s program.
- Commit to passing the wage increase directly to staff—it cannot be absorbed into operating costs.
- Maintain compliance with fee caps to remain eligible.
Why Are Some Services Still Waiting For The Grant
Some services are still waiting for the 15% grant because of administrative delays, eligibility requirements, and compliance checks. The funding is not automatically applied—services must apply, meet fee‑cap conditions, and wait for government processing.
Why Services Are Waiting
- Application Process: Services must formally apply for the grant. This involves paperwork, declarations, and agreeing to fee‑cap conditions. Not all services submitted applications immediately.
- Eligibility Checks: The government requires services to prove they meet conditions (e.g., limiting fee increases to 4.4% between Aug 2024–Aug 2025). This slows down approvals.
- Administrative Delays: Reports show the rollout has been slower than promised, with some providers waiting months for payments.
- Complex Funding Rules: The grant is tied to “retention payments” and wage subsidies. Services must demonstrate compliance with wage pass‑through rules (money goes directly to educators, not absorbed into operating costs).
- Sector Confusion: Some services misunderstood the grant as a permanent pay rise, while others saw it as a temporary subsidy. This confusion has led to hesitation or errors in applications.
Impact on Educators
- Educators in services still waiting may not yet see the 15% increase in their pay packets.
- This creates frustration and uncertainty, especially since the government promoted the measure as a “historic pay rise.”
- Advocacy groups warn that delays undermine the grant’s purpose—to retain staff and attract new educators.
The Bigger Picture
- The grant is time‑limited (Dec 2024–Dec 2026).
- Services that don’t apply or fail compliance checks risk missing out entirely.
- Peak bodies are calling for simpler processes and permanent award changes to avoid reliance on complex grant systems.
What Happens After December 2026
- Funding stops: The government subsidy ends.
- Wages at risk: Unless permanent changes are legislated into the Fair Work Award, services are only legally required to pay award minimums.
- Possible outcomes:
- Services absorb the cost and keep paying the higher wages.
- Wages revert to pre‑grant award levels if services cannot afford the increase.
- Fees rise once caps expire, or services cut costs/programs to balance budgets.
- Some services may face closure if the financial gap is too large.
The Reality for Educators
- Educators are guaranteed the 15% increase only during the grant period.
- Permanency depends on legislative reform or ongoing government funding.
- Without it, wages can revert to award levels after December 2026.
- Advocacy is critical to ensure the increase becomes permanent.
Why Advocacy Matters
- The grant is a short‑term fix to workforce shortages.
- For wages to remain permanent, the government must legislate changes to the award or extend funding.
- Peak bodies, unions, and educators are campaigning to lock the increase into the award system.
- Families also benefit from stable fees during the grant, but long‑term affordability depends on structural reform.
Key Takeaways
- The 15% grant is temporary funding (Dec 2024 – Dec 2026).
- Educators’ pay rise is not permanent unless legislated.
- Services must apply, comply with fee caps, and pass the increase directly to staff.
- After 2026, wages may revert unless the sector wins permanent reform.
- Advocacy is essential to protect educators’ pay and ensure sustainable services.
The Bigger Picture
- The grant is part of a broader push to value early childhood educators, improve retention, and address workforce shortages.
- Families benefit from capped fee increases during the subsidy period, but after it ends, services may need to reassess fees or budgets.
- Advocacy groups are already pressing for structural funding reforms to ensure services can sustain higher wages without passing costs onto families.
Further Reading
The Temporary Grant Mislabelled as a Pay Rise
Guidelines For 15% Wage Increase
Australian Government Supports 15% Wage Increase Over 2 Years
Childcare Wages In Australia
References:
Ministers’ Media Centre,
Get The Word Out Press Release
Early Childhood Educators Receive 15 Percent Pay Rise