ÌÇÐÄvlog¹ÙÍø

This page offers examples of how Fee Relief Payments, including unspent funds, are applied through the 2026 Start Strong for Community Preschools program. Learn more about fee relief funding in the 2026 program guidelines.

It also offers guidance on reporting 2025 fee relief expenditure and eligibility for requesting a fee relief top-up payment.

Understanding 2026 unspent funds

The Fee Relief Payment aims to reduce the cost of early childhood education and care to families in the form of fee pass-through.

From 2026, reserved fee relief will no longer be a component of the Start Strong for Community Preschools program. Fee relief funds that are not currently being applied to a child’s enrolment fees will be considered unspent fee relief funds.

Unspent fee relief funds are any amount of funds provided under the Fee Relief Payment which have been paid to the provider, but which have not yet been spent in accordance with Section 5.2. Fee Relief Payment spending rules.

Unspent funds can also refer to unspent program payment funds; however, this page focuses on unspent fee relief funds. Providers are required to spend annual Start Strong funding in accordance with the spending rules (see Sections 5.1. and 5.2. for spending rules) during the relevant program period. At the end of the program year any unspent fee relief funds will become surplus funds.

Unspent fee relief funds may occur due to fewer children accessing fee relief than expected. For example, if there are fewer enrolments overall, children are enrolled for less hours, or families are not claiming fee relief from your service.

If there are remaining unspent fee relief funds after fee relief spending rules have been applied to all eligible enrolments (that is, fees are lower than the amount of fee relief a child is eligible for), these remaining unspent fee relief funds must first be used to lower additional charges like resources or excursion fees. If all fees and additional charges to all eligible enrolments are reduced to zero, providers can use the remaining unspent fee relief funds to:

• provide additional fee relief for children not eligible for the maximum rate of fee relief funding, or
  

• reduce the cost of enrolment above 600 hours per year (for instance 'third day' fees), or

• reduce the daily fee for 600 hours per year of enrolment for children 3 years and older not accessing fee relief at the service, for example children of families with greatest need.

Please note in 2026, remaining unspent fee relief funds cannot be spent on operating costs.

In the event that additional enrolments arrive at the service, providers may wish to retain an amount of Fee Relief Payment allocation for use through the year.

Fee Relief Payment rates

Funding for eligible services is calculated using the 2025 Annual Preschool Census data. The Fee Relief Payment is calculated based on the number of hours a child is enrolled at the service and the characteristics of the child and service.

In 2026, there will be 2 categories of Fee Relief Payment:

• children eligible for the maximum fee relief rate can receive up to $4,456 depending on the hours they are enrolled

• all other children can receive up to $3,565 depending on the hours they are enrolled.

Children eligible for the maximum rate of fee relief are:

• children enrolled in services in SEIFA Decile 1 and 2

• children enrolled in services in ARIA+ Inner Regional, Outer Regional, remote or very remote

• children enrolled at services operated by Aboriginal Community Controlled Organisations (ACCOs)

• children with an Aboriginal and Torres Strait Islander background
  

• children from low-income families

• children with disability or additional needs.

³§±ð±ð Appendix 1.2 of the 2026 program guidelines for fee relief payment rates.

Fee relief in practice

An example of a provider’s Fee Relief Payment calculation can be found below to support you with understanding and applying fee relief through the 2026 Start Strong for Community Preschools program.

In 2025, Happy Learners Community Preschool had 30 children enrolled at the time of the 2025 Annual Preschool Census. This data is used by the department to calculate the service’s Fee Relief Payment for 2026.

Of the 30 children enrolled:

In 2026, Happy Learners will receive an annual Fee Relief Payment allocation of $113,544.00, paid in 4 equal quarterly instalments. The service operates for 40 weeks per year and has chosen to apply fee relief as a weekly reduction to families across each 10 week term.

Term 1

25 children are enrolled and claiming fee relief during Term 1 of 2026. This means that 25 children receive fee relief funding. Of the 25 children, 12 are eligible for the maximum rate of fee relief, 10 are enrolled for 600 hours and not eligible for the maximum rate of fee relief, 3 are enrolled for 420 hours and not eligible for maximum rate of fee relief.

The fee relief for the remaining 5 places is unallocated and therefore considered unspent funds. The total amount of unspent funds from these 5 places is $16,934.00 (3 x maximum fee relief rate = $4,456 x 3; and 2 x 300 hour per year rate for all other children = $1,783 x 2).

Happy Learners expect their enrolments to increase in Term 2 so they keep unspent funds aside.

Term 2

At the start of Term 2 2026, Happy Learners receives 2 new enrolments who complete a declaration form to receive Start Strong Fee Relief. 1 child is enrolled for 600 hours and eligible for the maximum rate of fee relief ($4,456), and 1 child is enrolled for 600 hours and not eligible for the maximum rate of fee relief ($3,565).

Happy Learners now have 27 children claiming fee relief. The service allocates fee relief across the three remaining terms for the 2 additional enrolments totaling $6015.75 ($4,456/3 = $3,342; $3,565/3 = $2,673.75). The total of unspent funds has reduced to $10,918.25.

Term 3

In Term 3, Happy Learners planned an incursion for all enrolled children. The total cost of the incursion is $680. The service makes the incursion free for families by using unspent funds.

In Week 5 of the term, a new child eligible for the maximum rate is enrolled and claiming fee relief. The service applies 5 weeks of fee relief for Term 3 and allocates Term 4 fee relief for the child. This reduces unspent funds by $1,671.

This means at the end of Term 3 there are 28 children claiming fee relief, and unspent funds total $8,567.25

Term 4

There are no enrolment changes in Term 4. In Week 5, Happy Learners decides to use a portion of the unspent funds to refund current families their enrolment fee of $100 per child, totalling $2,800.

The end of year result

Earlier in the year, Happy Learners used a portion of their unspent funds for an incursion and to reduce enrolment fees. This decision was at the discretion of the service; other services may choose to spend their unspent funds differently, or to retain unspent funds.

At the end of the year, Happy Learners has $5,767.25 in unspent funds.

Happy Learners will need to report this amount of unspent fee relief funds combined with their unspent program payment funds as part of the annual financial accountability process. This total amount of unspent funds becomes surplus funds at the end of the program period.

The total amount of surplus funds that the service has is under the threshold for returning surplus (that is, up to 10% or $30,000, whichever is higher). Therefore, the service can carry this amount over to the next reporting period and nominate to do so.

The service understands that if their total surplus funds were over the threshold, they would need to either return the funds above the threshold or outlining an operational need to retain the surplus.

Reporting 2025 fee relief data

Providers may request a one-off fee relief top-up payment if they expended more funds providing fee relief to their enrolments than the fee relief they were allocated under the 2025 program (for the program period of 1 January to 31 December 2025).

For example, this may be due to an overall increase in enrolments, or if children increased their hours of enrolment (thereby becoming eligible for a higher amount of fee relief).

Providers seeking to request a one-off fee relief top-up payment will need to complete a fee relief data submission for each of their service/s via SmartyGrants from 16 February to 1 March 2026. This is a voluntary process. Services that do not provide a fee relief data submission, or submit inaccurate data, will not be assessed for a top-up payment.

Steps for the 2025 Fee Relief top-up process

• The process will be open from 16 February to 1 March 2026.
• Once the process opens, the department will notify providers via email to the specified provider email in ECCMS.
• The voluntary data collection will be completed via SmartyGrants, where providers must complete individual submissions for each service they identify as requiring a top-up payment.
  • For eligible service funded under
  • For eligible services funded under
• Review the 2025 SSCPS Fee Relief top-up process - Help Guide or 2025 MPFP Fee Relief top-up process - Help Guide.
• Submissions will require information on enrolments across the 2025 calendar year and fee relief expenditure.
• Providers should note that submitting does not guarantee a top-up payment.

Contact

Get in touch with the Early Childhood ÌÇÐÄvlog¹ÙÍø Information and Enquiries team:

• 1800 619 113
• ecec.funding@det.nsw.edu.au.