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Worker Retention Payment Support Service
Worker Retention Payment Support Service


  • ​Frequently Asked Questions (FAQs)

The following set of FAQs have been put together by the Australian Childcare Alliance (ACA) to provide accurate responses to the many questions asked by our members over the past few weeks, in relation to the Federal Government's ECEC Worker Retention Payment Grant ("the grant"). 

We have provided responses based on information provided to us via the information available on the relevant government webpages, as well as via our regular one-one discussions with Education Minister Jason Clare, Early Childhood Education Minister Anne Aly and key staff members from the Department of Education ("the Department"). 

ACA has also produced a suite of resources including calculations tools to help employers determine the cost of implementing a 10% wage rise in the first year, and help determine whether or not the ECE Worker Retention Payment grant funding will benefit their early learning service. These resources are available at no charge to our members.

If you have any further questions, please contact your ACA State Body, and we can add your questions to this page.

HOW TO BECOME A MEMBER
If you would like to talk to someone about becoming an ACA member, please contact the ACA State Body that best aligns with your early learning service(s)'s geographic location. 

The Workplace Instrument

What is a workplace instrument?
This is an umbrella term used under Australia’s Fair Work Act to describe different types of legal documents used to set up worker pay and conditions, such as awards and enterprise agreements.

A workplace instrument sets out terms and conditions of employment, like:
  • pay rates
  • penalties and loadings
  • working hours
  • leave entitlements.

Workplace instruments can be negotiated through a bargaining process, and they are legally binding. 

Most employees in Australia are covered by an award under the federal system of employment, but some are covered under their state government system of employment. These are sometimes called industry awards. 

Enterprise Agreements are almost all in the public domain, so you can look them up to see what they look like.
What is an Individual Flexibility Arrangement (IFA)?

This is a document that applies one-on-one between employee & employer. There is no set format to create an IFA – it just needs the relevant information within it.

An IFA cannot cover more than one employee and has to be signed by both employer and employee.

An employer cannot make entering into an IFA a condition for employing someone.

Using one or more IFAs as part of your workplace instrument to be eligible for the grant could be burdensome if you have a large staff and a high turnover. (The other instruments are more administratively practical for large staff numbers.)

What is the Multi-Employer Agreement (MEA)?

The MEA is an agreement which has eventuated from the multi-employer supported bargaining process. 


In October 2023, members of the Australian Childcare Alliance (ACA), along with other early learning employer groups and the United Workers Union (UWU), the Australian Education Union (AEU) and the Independent Education Union (IEU) began negotiations for government-funded pay rises and better working conditions for workers in the Long Day Care (LDC) segment of the early learning sector. 


This process has now been finalised and has resulted in a Multi-Employer Agreement (MEA).   


This MEA is expected to be approved by the Fair Work Commission on 16 December. 

You can read the MEA here. 


Can the ACA offer assistance and support to service providers when adopting the MEA and/or the IFAs?

Yes – the Australian Childcare Alliance (ACA) offers a member-exclusive service to help service providers move across to the MEA or the IFAs, to access the Worker Retention Payment quickly and efficiently.

The MEA

The ACA is proud to offer a low-cost, streamlined process to  help our members save time and money as they implement the MEA.
Working with the professional services of our legal advisors at Australian Business Lawyers and Advisors (ABLA), we can assist you in adopting the new MEA quickly and easily, at a low cost.

The IFAs
With the guidance from our legal team at the Australian Business Lawyers and Advisors (ABLA) and the Department of Education, we have developed a template Individual Flexible Agreement (IFA) that complies with the Worker Retention Payment Grant Opportunity Guidelines, for the benefit of our members. 

This IFA is available exclusively to ACA members at no cost. 


What sort of workplace instruments are compliant with the requirements of the ECEC Worker Retention Payment grant funding?

To be eligible for the Worker Retention Payment, a workplace instrument must:

  • include an obligation to pay workers at or above the minimum rates in the grant guidelines and in accordance with section 4.3 of the grant guidelines
  • apply for the full 2 years of the payment.

There will be no exemptions to this condition.


Two workplace instruments that meet the requirements of the Grant Opportunity Guidelines are the Multi-Employer Agreement, which was recently finalised as a result of the multi-employer supported bargaining process, and Individual Flexibility Agreements (as long as the detail of the agreements complies with the Grant Opportunity Guidelines).  (This is not an exhaustive list.)

For a service that just uses the award, is the award their workplace instrument?

Whilst an award is a workplace instrument in legal terms, the award does not currently comply with the grant guidelines as it does not set out the minimum rates of pay as specified in schedule A of the grant agreement.

If we use some version of an Enterprise Agreement (EA) to access the Worker Retention Payment, does it need to be approved by the Fair Work Commission?
Yes - To have a compliant EA, there is a formal process that needs to be followed in order to establish, negotiate and accept an EA in every workplace. 

First it needs to be voted on by employees. If the majority of employees approve it, then it can be sent to the Fair Work Commission for approval before being put into operation.

The process is different for a Single Enterprise Agreement and also for the impending Multi-Employer Agreement (MEA). 
If a service is currently under an Enterprise Agreement (EA), would they be excluded from applying for the Worker Retention Payment until their EA is terminated and employees are then contracted under modern awards?
If a service has a current single EA, the employer will need to seek a variation to that agreement that ensures compliance with the WRP Grant Opportunity Guidelines.
If the workplace instrument is dated December 2, but the grant is not approved until after that date, do you need to pay the higher wages?
As the employer, you will need to pay the higher rates of pay from the date the workplace instrument specifies. If the grant is not approved at this date, it is likely to be back dated until the date the instrument specifies as long as you have applied for the grant before 30 June 2025.
If we employ staff under an employment contract, does this qualify as an approved employment instrument for the purpose of receiving the worker retention payment?
No - An employment contract or letter of offer will not be a compliant workplace instrument under the Worker Retention Payment Grant Opportunity Guidelines.
DELETE What is the Multi-Employer Agreement (MEA)?

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Delete - Can the ACA offer assistance and support to service providers when adopting the MEA and/or the IFAs?

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Is it possible to cancel an MEA anytime during the two years?

No - you can't opt out of the MEA. At the end of the two year period, the MEA will either be renegotiated or expire after two years.
If the MEA is renegotiated and your staff vote to remain in the agreement, then you are bound by the MEA.

Could you clarify the commencement date for the MEA? Are the options to start on 2 December and obtain back pay to that date, or to start when an approved application contract has been executed?

With the MEA, if you opt in before June 30 2025 and are approved for the grant it will be back paid top 2 December 2024. 

Can you please provide clarification, at the time of July 2025, is the MEA increase higher than what it would otherwise could be under an IFA?

The increases will be identical between the MEA and IFA.

Does the MEA allow for opting out of the WRP with an 8 week notice period?

Yes, but this is a complex process. You must meet some conditions before you can opt out including applying for a review of the fee constraint mechanism and be rejected first. 

If you adopt the MEA & then decide to opt out of the WRP, will you still be governed by the MEA and will still be required to pay the increase wages.

No. If you meet the criteria of opting out to the WRP you can, but don’t have to, revert to the award wages at the time. However this does not mean that you are no longer bound by the MEA.

Does terminating an IFA require the increased wages to be maintained?

No. Once you terminate the IFA you can, but don’t have to, revert to the award wages at the time. However it is worth noting the risk of staff turnover and the issue of how to cover the costs in other ways.

Eligibility - Service Providers & Employees

Who is deemed to be an eligible worker?

The grant is intended to cover employees of CCS Approved centre-based day care (CBDC) and outside school hour care (OSHC) services who work directly at a service. This includes employees working at a service under either the Educational Services (Teachers) Award (ESTA) or the Children’s Services Award (CSA) and can be classified in schedule A of the grant guidelines.


At a practical level this includes cooks who are employed under the children’s services award, centre directors and unqualified staff and trainees employed under the CSA.


Services who are council run and not for profit services who are CCS approved and either CBDC or OSHC are also eligible.

Who is not eligible?

Administration staff employed under the clerical award, cooks employed under awards other than the Children's Service Award (CSA) and trainees employed under the national trainee wage are not covered in the grant guidelines.

Does the Worker Retention Payment grant funding include casual staff?

If they have a compliant workplace instrument that covers them and they work, then they should receive funding.

Application

How does a service provider opt in to the Worker Retention Grant?
  • Service providers can opt in by applying for the grant via the GrantConnect website.
  • You can download the ECEC Worker Retention Payment application preview form here. 
  • You can download the 27-page Grant Opportunity Guidelines document here.
  • If you eventually decide to apply, you will need to log in to the GrantConnect website here. 
How are the grants allocated?

The grants will be allocated once all the application has been assessed as compliant with one of the most significant criteria being that a compliant workplace instrument has been put into effect. This will be allocated in order of application, assuming the application is compliant.

When will the information about reporting requirements be made available?
This will be provided in the grant agreement, and there is also a wealth of information already in the Grant Opportunity Guidelines.
The financial information question in the application asks for:   
  • total expenditure of eligible ECEC workers’ wages and on-costs for the Financial Year  2023-24; and 
  • total costs paid for eligible ECEC workers for the Financial Year 2023-24.   
When filling out historical leave amounts in the application, can we include other leave types that we provide for staff? Eg. Our centre gives 2 weeks special leave per year to employees which is accrued on a continuous basis and paid out at termination if unused.

For historical leave liabilities, only 3 types of leave should be included – annual leave, personal leave and long service leave. 

I have 4 services under 3 providers, will I need to submit an application for each provider / legal entity?

It is our understanding that each legal entity will need to make an application for the number of services you choose to apply for connected with each entity. Applications are linked to CCS approvals. 

What happens after two years?

The Department of Education has explained that this is an interim process while the Federal Government waits on the outcome of the gender evaluation process, plus assess the recommendations of the Productivity Commission’s Final Report from their inquiry into the early learning sector.

At this stage, it is not possible to predict what will be put in place beyond the two years of this funding program, particularly given there is a federal election before the end of the funding period.

What is the latest date we can opt in to the WRP?

Application for the Worker retention payment close on September 30, 2026.


However if you would like to backdate the payment to apply from 2 December 2024 you will need to have applied with a complete application by June 30, 2025.

Funding Formula

So, how is the payment amount calculated?

The payment will be based on the number of charged session hours at your service. For example if you have a 100 children attending your service daily with an average session length of 10 hours you will receive a payment based on 1000 hours per day or 5000 hours per week or 20,000 hours per four weeks. 


This will lead to a formula looking something like this:

  20,000 hours x $x =


We do not know the $x and how this is determined.

Is there an actual formula and/or a practical example of how this grant funding will be calculated?
The Department of Education has released some case studies, presented as 'cameos' which help shed some light on how the payments will be calculated for each individual service. The payment will be based on the number of charged sessions hours at your service.
When will the grant funding methodology be released?
ACA has been strongly advocating for the Department of Education to release this information as soon as possible, to enable all service providers to assess whether or not the Worker Retention Payment will benefit their service.

At this stage, it is unclear if or when the government will release this information. 
Where is the statement from government that stipulates that “no services will be left under-funded” in terms of oncosts?

The latest update from the Department of Education states that that all services, regardless of configuration, will now receive “a minimum of an additional 20 per cent funding, calculated against the wage increase, to contribute towards eligible on-costs,” a move that will support those previously disadvantaged by the payment structure. This is in addition to a commitment to ensure 100% of the cost of funding the pay rise.


You can view the statement on the Department of Education website here. 


You can also read an article in The Sector on this point here. 

Will consideration be given to number of Diploma-qualified staff or degree-qualified Early Childhood Teachers?

Whilst we are unsure of how the formula has been determined, the Department of Education is confident that its calculation will adequately cover a range of staffing arrangements for the majority of services.


It is our understanding that the Federal Government has modelled a range of different service offerings in developing its formula and determined an expected labour cost. We have been advised that this is not set at minimum ratios and is expected to be generous enough for a broad range of circumstances.


Whilst we hope that this is indeed the case, we are unable to provide with certainty the methodology or amounts involved.

We have been informed that if the rate calculated doesn’t meet the figure required for your service to remain financially viable, that you are encouraged to apply for additional funding based on your staffing costs. 


At this stage we do not know what kind of evidence or information would be required to justify such an application. 

What oncosts are included in the Worker Retention Payment?
The grant guidelines specify the following oncosts are allowed to be paid from the grant money:
  • Superannuation
  • Workcover
  • Payroll Tax
  • Leave Loading
  • Accrued Leave Liabilities (a single payment)
If occupancy drops in January/February, will the payment decrease because usual staff numbers may not be required in ratio? What if you close your service over the Christmas period? Would you still receive the grant money for those 2 weeks of closure?

It is likely that there will be variations in payment as a result of your occupancy and or closure periods. This will mean that in some months you may receive an excess and in other months you will receive a little less. We will know more on the impact of this once the funding details are known.

What would happen if your current occupancy is only 45%, then over next 6 months, your occupancy goes up to 90%? This change obviously has a huge impact on wages - would the retention payment be based on the increased wages?

The Worker Retention payment is calculated based on the number of session hours you lodge. Therefore, the payment would increase accordingly with occupancy changes. 

Does that mean children who are not eligible for CCS (e.g. non-residents) will not be captured in this calculation?

It is our understanding that as long as you submit sessions for children who are not approved for CCS via the CCS system that they will be factored into the payment formula.

If the Gender Undervaluation decision and the annual national minimum wage increases combined exceed 10% or even 15% of the pre-existing Award rates, will the government update the WRPs accordingly to ensure services are not-out-of-pocket while having the 4.4%/4.2% fee cap limit imposed?

The government has not specifically committed to this. Ultimately the MEA and IFA can be terminated if gender exceeds the WRP amounts.

Payments & Admin

Are payments being made in arrears or in advance?

Payments will be made one month in arrears based on the previous two months session hours. For example your payment for December 2024 will be paid in January 2025 using data from November and December 2024. 


The Department of Education has advised that some services may receive a payment in December to assist with cashflow but that this will be reconciled against future payments.


You should be aware that you are able to claim historical leave liability increases once only. That is, the government will pay 70% of the hourly increase for leave liabilities in a single lump sum payment. 

Thus it would make sense to wait until the pay run prior to the 2nd December in order to ensure that all eligible leave liabilities are included. 
In terms of WRPs received, what kind of remittance data would be sent to the service every 4 weeks in arrears? This data would be useful for financial reconciliation purposes.

We simply don't know yet.

Can DocuSign be used for IFAs?

Yes - the Electronic Transactions Act 1999 (ETA) states that electronic signatures (often called e-signatures) are just as valid as traditional paper or ‘wet ink’ signatures for most Commonwealth processes. 


However you will need the consent of the employee to use this format. 


You can read more about electronic signatures on the Australian Attorney General’s website here. 

Above AwardPayments

What if I already pay above the award rate?
Where an employee receives above award payments the employee will need to receive an additional payment that correlates with their award classification and the dollar amount specified in schedule A. 

For example:
  • Employee is a level 3.1
  • The award rate is $27.17
  • Their current pay rate including above award payment is $30.00
  • They will need to receive a pay rise of $2.72
  • Their new pay rate will be $32.72
Can I absorb my existing above award rates?

No - If you are receiving the grant you cannot absorb above award payments.

If we pay our staff currently 10% above the award, what will the government pay for those employees under the grant?

If you are currently paying 10% above the award and choose to apply for the grant, you will need to pay your employees an additional dollar amount above their award rate as specified in schedule A in the guidelines. Please refer to the question above. 

You can access the guidelines here. 

Access the rates here. 

Fee Constraint

What does the fee growth limitation apply to?
The fee constraint condition is an annual fee growth percentage cap which all grantees must adhere to. 
The caps are as follows: 
A maximum 4.4% increase to service fees applicable from 08/08/2024 to 07/08/2025
A maximum 4.2% increase to Service fees applies from 08/08/2025 to 07/08/2025
What determines non-serviceability and therefore be able to increase more than the capped amount?

You can review the application terms for a fee constraint review here - Page 1 - 2. Alternative Fee Growth Percentage Cap - Department of Education

Is there a limitation on when the fees can be increased within the 12 month identified in the guidelines?

The fee constraint advice only identifies that fees can increase no more than 4.4% in the 12 month period. The timing of of any fee increases within these parameters is a business decision.

What if you notified parents of the fee increase in July, but because of notice it did not take effect until later in August?

For those services who may have given notice of a fee increase prior to August 9, 2024 but not implemented until after, this increase will need to be at or under 4.4% to comply with the grant guidelines however you may be able to seek exemption. The exemption guidelines have not yet been released.

If we don’t register, but pay our staff the increase, are we still able to increase our fees above 4.4% to cover the increased wage costs?

A service could choose to increase wages, not claim the grant and increase fees. However there are a number of important factors to consider and weigh up carefully before making such a decision, to ensure the outcome is appropriate and sustainable for your service's individual circumstances. 

A 4.4% increase does not work out as a round number for fees. Can we round up to the nearest dollar?

The fee increase cannot be rounded up if it exceeds 4.4%.

Opting out of the WRP

Can you opt out of the WRP after applying for it and receiving funding?
Yes you can, but this does not mean you are no longer bound by the MEA or the IFAs. You will still be bound by the relevant agreement(s), but under the agreement, if not receiving the grant funding, then the minimum wage requirement reverts back to the existing award wage levels.

The MEA allows for opting out with an 8 week notice period and you must meet some conditions before you can opt out, including applying for a review of the fee constraint mechanism and be rejected first. 

The IFAs allow for opting out with a 13 week notice period and you don't need to meet the above conditions.
In order to opt out of the WRG, do you have to wait until you have received your grant, assessed it as being insufficient, requested a review with relevant payroll evidence and then being declined the increase or the agreed increase doesn’t satisfy your operational needs?
For the MEA you only need to apply for a review of the fee constraint and be rejected to opt out. It would be advisable for all services to exhaust all review options before finalising their decision. 
Has the Government advised a specific timeframe for a review process?

We don't know at this stage.

What if you want to opt-out not because the cover of wages and on-costs are insufficient but because with the Annual Wage Review in July, rent increase, other operating costs increases the 4.4% is insufficient to sustain the business you need to run? Is there a different process for these non-grant related issues?

Opting out relates to the business needs not being met by the WRP, so there is only one process regardless of the contextual factors.  You can still seek a funding review or alternative fee cap as necessary.

If you opt out of the WRP, you will have the opportunity to use other business levers to cover the costs such as increasing daily fees charged to families. Is this correct?

Yes, this is correct. 

Other

Can an organisation have staff split across two or more enterprise agreements?

Yes, an employer can be covered by more than one enterprise agreement.  However, only one enterprise agreement can apply to a specific employee at any given time (see s 58 of the FW Act).  To determine which EA applies to a particular employee, we need to have regard to its scope and coverage provisions.


For example – an employer might have an EA covering its administration staff and one covering its manufacturing staff, or different EAs applying to employees who work at their sites in different states.  There may also be a group of employees who aren’t covered by an enterprise agreement at all, even where there are a number of agreements covering the employer – for example, management/administration staff are often not covered but the “blue collar” workforce is.


When considering whether to approve an enterprise agreement, the Fair Work Commission must firstly consider whether the group of employees covered by the agreement was “fairly chosen” (s 186(3)) and then secondly, if the agreement doesn’t cover all of the employees of an employer (which is usually the case), then in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct (s 186(3A)). 


So when you’re looking at a business that has a number of enterprise agreements and working out what to do moving forward, one of the things we need to consider is whether we will be able to convince the Fair Work Commission that any new or replacement agreement covers a “fairly chosen” group of employees.  In essence, this means you can’t just draw an arbitrary line around a group of employees who are covered and exclude others – there needs to be some sensible justification for where (and why) we have drawn that line. 

How does this affect eligibility or participation in the MEA/WRP process?

Where an employee is covered by an EA within its nominal term (i.e. the expiry date hasn’t yet passed), they won’t be able to be “roped in” to the MEA (unless something else happens – for example, there is a separate application to terminate the enterprise agreement).

 

This may mean that:

·There are some employees who will be eligible to be roped in, because they either aren’t covered by an enterprise agreement or they are covered by one that has passed is nominal expiry date.  This makes accessing WRP simple, but we will have to be careful if the provider wants to go down this path that only employees who are eligible are part of the ballot.

·There are some employees who won’t be eligible to be roped in, because their enterprise agreement is still within its nominal term.  This will require them to enter into IFAs to access the WRP in the short term (unless they want to go down the enterprise agreement termination route).

·Depending on the size of the business and their needs, it may not be appropriate nor desirable to automatically assume the MEA is the best option.  For example – would it be better to negotiate their own new EA which will allow them to access the WRP but can be customised to their business?  Again, this could only cover employees who aren’t currently covered by an EA or one that has passed its expiry date, but it is certainly worth considering (especially if this is a larger provider who may want to stay outside the MEA process for the time being).