Spending rules

Start Strong Free Preschool funding is to be used for the purposes detailed below:

• Provide at least 600 hours of free preschool to eligible children in 2022.
• Prioritise access in accordance with Start Strong Priority of Access guidelines. This includes children in the year before school, and children aged 3 years and above from low income and Aboriginal families, and children with disability and additional needs.

Where funding exceeds the cost of providing 600 hours of free preschool to eligible children, services may choose to provide additional days of free preschool and/or spend funds in accordance with Start Strong for Community Preschool program guidelines, which includes the operating expenses of the service.

Where possible, any additional funding should focus on improving the quality of the early childhood education program delivered at the service.

Funding for this program has been confirmed for the 2022 calendar year. The funds need to be expended in the 2022 calendar year.

Support is available to assist services align with the Start Strong Priority of Access guidelines. Please refer to the Disability and Inclusion Program guidelines for information on support and funding available through this program.

Funding conditions

The program requires services to provide free preschool for at least 600 hours per year per child as this is consistent with the Start Strong program and is commonly used as the benchmark in the sector. This is approximately 15 hours or 2 days per week in the majority of preschool settings.

Services are encouraged to maximise the number of children with 600 hour enrolments.

Free preschool should still be offered to any eligible children where their enrolment is less than 600 hours per year. Funding for children enrolled for less than 600 hours per year will be proportionate to the number of hours enrolled (see Table 1 below).

In recognition that 600 hours per year is not always possible for children with a disability or additional needs, the maximum rate of Start Strong Free Preschool funding will be available to those children who are enrolled for a minimum of 300 hours per year, and have an Individual Learning Plan (ILP) which includes a progressive plan to increase to 600 hours per year.

Services can provide more than 600 hours per year for free if they are able to do so (for example, where a child may be enrolled more than 15 hours per week and they wish to continue this pattern, and the service has sufficient funding to do this). Services may charge a fee for any hours of enrolment above 600 hours per year if they consider this necessary. Services should seek to keep overall fee levels as low as possible. Fees for enrolment above 600 hours (for instance “third day” fees) are expected to be maintained at the fee levels of previous years, adjusted for CPI. In circumstances where it is necessary to adjust fees above CPI, such as due to reasonable increases in operating costs, services must retain evidence to support the fee increase.

Children enrolled at multiple services

To assist services in making enrolment decisions for new enrolments:

• Services are to prioritise access in accordance with Start Strong Priority of Access guidelines. This includes children in the year before school, and children aged 3 years and above from low income and Aboriginal families, and children with disability and additional needs.
• Where there is a waitlist, it is good practice for services to seek confirmation from parents/legal guardians that their child is not accessing free preschool at another community preschool service. This is consistent with the prioritisation of enrolments under Start Strong. The Department recognises that from time to time the information provided to services regarding a child's enrolment may be partial or provided after enrolment is confirmed. As such, funding will not be reduced for a service if a child is accessing free preschool at more than one community preschool service.

Services are encouraged to maximise the number of children with 600 hour enrolments.

Services should consider any adjustments to policies and procedures required to comply with regulatory requirements when obtaining and sharing personal information, including privacy laws.

Other fees and income

For Term 3 and 4 2022:

• From Term 3 2022, levies are permitted to be introduced and charged if justified by operating expenses to support service sustainability. Services can determine if levies are compulsory or voluntary in consultation with their communities. 
• New (non-historical) levies may be introduced from Term 3 2022, and cannot be charged retrospectively. 
• Services should consider a levy structure that supports ongoing enrolment and/or considers the equity status of a child.
• It is at the discretion of the service if fundraising activities and donations are requested. 
• Where possible, services should provide a rationale for additional charges to families, including how income from additional charges will be used. 
• Levies may include, but are not limited to, charges for enrolment/administration, resources, excursions/incursions, building/garden maintenance. 
• A membership fee of a nominal amount may continue to be charged by a service when required by regulations or the governing rules or constitution of the business.

For Term 1 and 2 2022:

Fundraising activities, levies (where they have historically been charged only) and donations are permitted provided they are undertaken on a voluntary or optional basis. A membership fee of a nominal amount may continue to be charged by a service when required by regulations or the governing rules or constitution of the business.

Record keeping

Relevant records must be retained for the purpose of funding compliance reviews associated with this program. Examples of relevant records may include:

• Documentation detailing funding received through:
  • fundraising, donations, voluntary levies and contributions;
  • membership fees; and
  • fees charged for any hours of enrolment above 15 hours per week.
• Communication of additional charges, such as levies.

Start Strong funded community preschools and mobile preschools funded by the department under mobile preschool funding arrangements are eligible to opt in to receive funding under this program. To participate, eligible providers must complete the opt-in process for the 2022 Start Strong Free Preschool program, regardless of whether they have opted into the COVID-19 Preschool Funding program in 2020 and/or 2021.

Providers who did not opt in to the COVID-19 Preschool Funding program in 2020 and/or 2021 are able to opt in to the Start Strong Free Preschool program in 2022.

Funding is provided for children eligible for funding under the Start Strong guidelines for community preschools. To be eligible for funding a child will need to be:

• At least 3 years old on or before 31 July in that preschool year and not in compulsory schooling; and
• Attending an early childhood education program.

Start Strong Free Preschool has been developed as a means to sustain free preschool delivery in NSW by providing a simplified payment for each eligible child in 2022 so services can continue to deliver 600 hours of free preschool.

For community and mobile preschools, funding under this program is paid on top of their annual Start Strong funding allocation.

Funding allocations for individual services are based on their individual circumstances and take into account the enrolments services have submitted through the 2021 Annual Preschool Census or March 2022 Census.

For children enrolled for 600 hours or more, a maximum funding rate of $4,000 (ex GST) per child is available to services. A pro-rata rate of funding will be applied for children enrolled for less than 600 hours per year as per Table 1.

Table 1: Funding calculation

In recognition that 600 hours per year is not always possible for children with a disability or additional needs, the maximum rate of Start Strong Free Preschool funding will be available to those children who are enrolled for a minimum of 300 hours per year and have an Individual Learning Plan (ILP), which includes a progressive plan to increase to 600 hours per year.

Services may have a change in enrolments compared to the August 2021 Preschool Census. This may result in an increase in funding under the Start Strong Free Preschool program. The Department has undertaken a secondary data collection in March 2022 to calculate the increase in funding.

A simple opt in enrolment process is available through SmartyGrants.

Approved Providers who have opted in to the COVID-19 Free Preschool Funding program in 2020 and/or 2021 will need to opt in for the Start Strong Free Preschool program in 2022. Services that did not opt in to the COVID-19 Free Preschool Funding program in 2020 and/or 2021 are eligible to opt in to the Start Strong Free Preschool program in 2022.

Participation in the COVID-19 Free Preschool Funding program is not a condition of participating in Start Strong Free Preschool.

The opt-in process will remain open until 2 December 2022 and late submissions may not be accepted. This will allow the Department to process any payments prior to the end of the 2022 calendar year.

Services are able to opt out of the program by completing the relevant opt-out process through SmartyGrants. The opt out must apply to a full term, and should be completed prior to payment for that term being progressed. Providers cannot opt in or out for part of a term. Providers must submit an opt-out form prior to the dates listed below. We recognise these dates sometimes fall within the term break, and this is intended to maximise the time available to you to make a decision on your participation in the program for subsequent terms:

• Term 2: 6 April 2022
• Term 3: 8 July 2022
• Term 4: 30 September 2022

Payments commenced to eligible community preschool and mobile preschool services from the beginning of Term 1 2022. Four payment rounds will be made throughout the year in line with the commencement of each term.

Services must have accepted the Early Childhood Education Grants Programs Terms and Conditions:

• 2021/2022 for Term 1 and Term 2 2022 payments.
• 2022/2023 for Term 3 and Term 4 2022 payments.

Acquittal of funds will be required following the completion of the 2022 calendar year for Terms 1 to 4 2022 payments.

Funding compliance reviews associated with this program will be undertaken. Providers are required to keep relevant records in accordance with the funding agreement, including demonstrating delivery of free preschool for 600 hours per year, and make these available to the department or their authorised representatives as requested.