More Pay Rise Detail
The 15% wage increase for early childhood workers has been welcomed by educators, families and childcare providers. See what’s new when it comes to this worker retention payment.
BY HEJIRA CONVERY, KINDICARE
It’s been one week since the Albanese government announced a 15% pay rise for early childhood workers, and since then, a little more detail has emerged.
As we reported on 8 August, this wage increase will be phased in over two years, with a 10% increase from December 2024, followed by a 5% increase from December 2025.
This payment will raise the current national award rate for early childhood workers above and beyond the 3.75% award wage increase that started on 1 July 2024.
However, instead of being a straight-up pay rise, the 15% increase is actually a worker retention payment.
What this means is that it will run for two years while:
- The Fair Work Commission wraps up its gender undervaluation review, and
- The government navigates the exciting, yet delicate, path towards a universal early childhood education and care system, ‘In the great tradition of universal Medicare and universal superannuation.’
We look forward to the interim payment being firmed up in the future, but for now, it's really good to see educators being properly valued and fairly paid, without families having to foot the bill via big fee increases.
At present, there are things we know, and do not yet know, about the government-funded pay rise.
The Department of Education has made it clear that childcare providers will have to actively apply for the worker retention payment.
This will be paid as a grant, and we know that the payment will be conditional on:
- Providers limiting annual fee increases, from 8 August 2024
- Passing on all funding to eligible workers through greater pay, and
- Engaging staff through a workplace instrument that meets grant conditions.
However, the exact grant guidelines and comprehensive info about workplace instruments haven’t yet been released, and there’s a little uncertainty about how much fees will be reined in after 7 August 2025.
From 8 August 2024 to 7 August 2025, the government has mandated that providers can’t increase their fees by more than 4.4%, and after that time, this percentage will be, ‘Determined by the ECEC Cost Index, published by the Australian Bureau of Statistics.’
And while some providers may be able to raise fees more than the set percentage, if they can show that a bigger fee rise is essential to, ‘Ensure their financial viability,’ this exemption is something they’ll have to apply for, rather than just enact.
There is also a question mark over how the worker retention payment will play out in the Family Day Care and In Home Care sectors.
The government says it will consult with both sectors, ‘To understand how support can be extended to their workforce.'
In the meantime, the worker retention payment is really positive for workers in Child Care Subsidy-approved Centre-based Day Care and Outside School Hours Care services, and it’s great for families too.
This KindiCare article explains all the upsides for Australians, and Australia.
And it’s good to know that this Department of Education page will be regularly updated, as more info about the worker retention payment is released.