(Cth) Index the Inclusion Support Program Additional Educator Subsidy
Author: Akash Merai, Janelle Kenny, Liliana Faull, Eliza Kral, Harriett Cox, Henry Turner, Hannah Forwood & Luc Leong | Publish date: 6/10/2026
P: In Australia, the Inclusion Development Fund - Additional Educator subsidy (to support children with a disability) is neither in line with, nor indexed in accordance with, increases in the award hourly rate for educators.
S: The Minister for Early Childhood Education should amend Section 8.4 of the Inclusion Support Program (ISP) Guidelines 2026 to require an increase and then annual indexation of the IDF-Additional Educator in accordance with the award rate.
E: Goodstart Early Learning (2023): ‘the ISP subsidy rate should be immediately increased … to match the actual cost of an educator (indexed annually consistent with increases in the award rate)’.
Problem Identification:
Section 8.4 of the ISP Guidelines sets the hourly subsidy rate for an additional educator to support children with a disability. However, the ISP Guidelines do not establish that this hourly subsidy rate is to be increased or indexed over time.
The Federation of Parents and Citizens Associations of NSW (P&C Federation) reported that this means education and care services may be ‘forced to either absorb the additional costs or reduce their capacity to enrol children requiring higher support ratios.’
Context:
Within the ISP, the Inclusion Development Fund (IDF) - Additional Educator stream provides funding towards an ISP Additional Educator. Goodstart Early Learning (GEL) explained that the IDF-Additional Educator is ‘for an additional (above ratio) educator in an early learning room, so that children with a disability, developmental delay … or other inclusion support need can participate in early learning.’ GEL outlined that the additional educator program ‘is intended to address the financial disincentives for enrolling children with higher support needs’. The ISP applies to ‘service providers that have been approved by the department for the provision of the Child Care Subsidy … under the Family Assistance Law.’ This includes Centre-Based Day Care, Outside School Hours Care and Family Day Care services.
The ISP Guidelines (2026) set the subsidy rate of an additional educator at $23 an hour. Paul Mondo, President of the Australian Childcare Alliance, stated that ‘the cost of employing an additional educator … is well over $40 an hour.’
The Productivity Commission reported that ‘the reach of the ISP … remain[s] limited … particularly when an estimated 20% of children have learning difficulties, developmental issues or disability.’
Early Childhood Australia (ECA) explained that, as required by the United Nations Convention on the Rights of the Child, ‘inclusive practice in early childhood education and care ensures that every child has access to education “irrespective of … disability”’.
Arguments:
A report by Deloitte outlined that the costs associated with employing additional educators can be ‘a deterrent from enrolling children with additional needs’. According to GEL, ‘the subsidy continues to lose value as wages increase and no longer covers even the lowest possible qualification level’. The Brotherhood of St. Laurence reported ‘families … being turned away from education and care services based on their child’s … additional needs.’ Advocating for Children with a Disability (previously known as the Association for Children with a Disability) detailed how early childhood education and care services ‘discourage their child from enrolling or attending a service’ by ‘telling families the service … [doesn’t] have the funding to support their child’.
Children and Young People with Disability Australia (CYDA) CEO Skye Kakoschke-Moore stated that this ‘is setting [children with disability] up for failure very early on in life.’ According to CYDA, ‘children who do not participate in early childhood education have significantly higher chances of being developmentally vulnerable than those who do’. ECA highlighted that inclusion in early childhood education and care ‘lays the foundation for each child’s participation within a diverse community.’ The 2024 update of Australia’s Disability Strategy 2021-2031 explained that ‘the benefits of accessing quality early-years education continue throughout children’s primary education years and can support future success, including educational attainment, employment, and economic and social participation.’
Advice/Solution Identification:
GEL, the Early Learning and Care Council of Australia, and Early Childhood Australia have called for the ISP IDF-Additional Educator hourly subsidy rate to be increased and then indexed with award rates to cover the cost of employing an additional educator. ECA outlined that ‘children who experience inclusive early childhood education and care will develop independence … and will develop a sense of identity and self-esteem.’
Precedent:
There is domestic precedent for indexing funding to increase alongside the award rate for eligible workers. In Australia, the Worker Retention Payment is a government grant ‘linked to eligible award rates’, with ‘payment to services … indexed in recognition of the annual wage review.’
Public Support of the Solution
(This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.)
Australian Childcare Alliance (see acknowledgment statement)
Early Childhood Intervention Australia Victoria/Tasmania (see acknowledgment statement)
Broad Support
A path to universal early childhood education and care - Inquiry report - volume 1 (Productivity Commission) - The report called for an ‘increase [to] the hourly subsidy rate for an additional educator’s wage to the level set for a Children’s Services Employee Level 3.3 and [to] index the subsidy rate to that wage classification’.
The Front Project - They called for an increase to the current hourly subsidy rate ‘so that it subsidises 100 per cent of an additional educator’s wage, up to the median hourly wage of a certificate III qualified educator’. However, they have not specifically called for the payment to be indexed.
It Takes A Village and Community Early Learning Australia - They called for increased ‘funding for additional educators paid at the Children’s Services Award Certificate 3.1 rate’. However, they have not specifically called for the payment to be indexed.
The Y Australia - They called for the ‘[ISP] additional educator rate [to be] aligned with award/EBA wages’. However, they have not specifically called for the payment to be indexed.
United Workers Union - They called for ‘the wage subsidy to fully cover the wages of any additional educators required.’ However, they have not specifically called for indexation of the ISP.
Creche and Kindergarten Association Limited - They called for ‘inclusion funding [to] reflect the actual cost to deliver high-quality services’. However, they have not specifically mentioned the ISP program or the hourly subsidy rate.
Review of the Inclusion Support Program - Final Report (Deloitte) - The report called for the Department of Education to ‘consider an adjustment to the hourly rate for Additional Educator Subsidy’. However, they have not specifically called for indexation of the ISP subsidy rate.
News Coverage:
The Sector - “Australia’s Inclusion Support Program is a gem, ensuring children, who would otherwise be left out, can join early learning”. This article discussed the importance of funding the ISP to support children’s learning. No Author Listed | 6 July 2026 - Read the article here.
The Guardian - “No longer a ‘niche’ group: children with complex needs being turned away from childcare in Australia”. This article reported that obtaining funding for ISP is made difficult by the extensive wait times accompanying both the ISP and NDIS. By: Krishani Dhanji | 19 February 2026 - Read the article here.
ABC News - “Multi-million-dollar Inclusion Support Program is creating barriers, not taking them away, early childhood centres say”. An early childhood education and care director reported that navigating ISP funding processes has been difficult and has limited the number of children with a disability that she could support. By: Nas Campanella & Mary Lloyd | 27 November 2024 - Read the article here.
ABC News - “Parents heartbroken by exclusion of son from kindergarten after epilepsy diagnosis”. This article shared the story of a family whose child faced discrimination at an early childcare centre run by Guardian Childcare and Education, following an epilepsy diagnosis. By: Evan Young and Nas Campanella | 21 June 2024 - Read the article here.
Where to go to learn more:
(2024) A path to universal early childhood education and care | Australian Government Productivity Commission - This report communicated the findings and recommendations from the Productivity Commission’s inquiry into universal early childhood education and care. Recommendation 2.2 explicitly called for indexing the subsidy rate to that wage classification. View the report here.
(2023) The Early Years Strategy: Goodstart Submission | Goodstart Early Learning - This submission communicated Goodstart’s position on the Australian Government’s Early Years Strategy. They included recommendations to amend the ISP subsidy rate to match the actual cost of an educator (indexed annually consistent with increases in the award rate). View the report here.
(2025) Goodstart Early Learning: 2025 Pre-Budget Submission to the Australian Treasury | Goodstart Early Learning - This submission communicated Goodstart’s position on universal early childhood education and care. They included recommendations for the hourly subsidy rate to be increased to represent a Diploma-qualified educator with two years’ experience, including on-costs. They broadly supported the recommendations made in the Productivity Commission’s inquiry into universal early childhood education and care, but urged for further improvements to be made across the board. View the submission here.
(2023) Review of the Inclusion Support Program | Deloitte - This report examined ‘the degree to which the outcomes and objectives being pursued by the [ISP] are being achieved and whether changes to the [ISP] could improve its efficiency and/or effectiveness’. View the review here.
(2025) Standing Committee on Health, Aged Care and Disability - 28/11/2025 - Inquiry into the thriving kids initiative | Australian Childcare Alliance - This transcript provided evidence to the Standing Committee on Health, Aged Care and Disability - Inquiry into the Thriving Kids initiative, which said that there is a significant disparity between the hourly subsidy rate for an additional educator and the cost of employing an additional educator, including on-costs. However, they did not explicitly call for legislative change. Read the transcript here.
Inclusion Support Program Guidelines 2026 - Read the guidelines here.
Human Perspective:
Dinosaur Childcare Centre had a great reputation in the neighbourhood, especially for supporting children with additional needs. One of their students, Emily, was a four-year-old child who loved story time, painting and playing with her friends at childcare. Emily required the support of an Inclusion Support Program additional educator to help her participate in activities, build relationships and feel confident in the classroom. However, because the wage subsidy failed to keep pace with the real cost of employing additional educators, Dinosaur Childcare Centre struggled to cover the growing funding gap. Despite wanting to continue supporting Emily, the centre could no longer afford the cost and was forced to reduce her support. Without the assistance she needed, educators noticed Emily withdrew from group activities and missed out on valuable opportunities to learn and develop alongside her peers. When speaking with other parents, Emily’s dad learned that parents looking to enrol their children with additional needs at the centre were now being turned away completely. While other children continued to build friendships and prepare for school, Emily was getting left behind in the very environment designed to give every child the best possible start in life. This was not because of her needs, but because the funding to support her had fallen behind.
To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.
Conflict of interest/acknowledgment statement:
Australian Childcare Alliance confirmed their support for this solution in an email with FORE Good on 21 August 2026. Shared with their consent.
Early Childhood Intervention Australia Victoria/Tasmania confirmed their support for this solution in an email with FORE Good on 12 August 2026. Shared with their consent.
Support
If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com.
Disclaimers
Please review all FORE disclaimers here.
Reference list:
Association for Children with a Disability (ACD). (2023). Submission: Productivity Commission's inquiry into Early Childhood Education and Care. https://assets.pc.gov.au/__data/assets/pdf_file/0004/360085/sub078-childhood.pdf
Australian Childcare Alliance. (2026). Annual Wage Review 26-27 - How it will impact you. https://www.aca-worker-retention-payment.org.au/blogs/post/annual-wage-review-2026
Australia Childcare Alliance. (2026, January). Pre-Budget Submission: Child Safety, Inclusion, Parental Choice & Workforce Stability in Early Learning. Productivity Commission. https://nsw.childcarealliance.org.au/images/Documents/Submissions/ACA%202026%20Pre-Budget%20Submission.pdf
Australia’s Inclusion Support Program is a gem, ensuring children, who would otherwise be left out, can join early learning. (2026, July 06). The Sector. https://thesector.com.au/article/inclusion-support-program-10-years-early-learning
Brotherhood of St. Laurence. (2023). BSL submission to the Productivity Commission Inquiry into Early Childhood Education and Care. https://assets.pc.gov.au/__data/assets/pdf_file/0017/360116/sub096-childhood.pdf
Campanella, N., & Lloyd, M. (2024, November 7). Multi-million-dollar Inclusion Support Program is creating barriers, not taking them away, early childhood centres say. ABC News. https://www.abc.net.au/news/2024-11-27/inclusion-support-program-not-working-providers-say/104507980
Commonwealth of Australia (Department of Social Services). (2024). Australia’s Disability Strategy 2021-2031. https://www.disabilitygateway.gov.au/sites/default/files/documents/2025-01/5831-dss3513-ads-strategy-2021.pdf
Community Child Care Association & Community Early Learning Australia. (2025, July). Submission: Economic Reform Roundtable. https://itav.org.au/wp-content/uploads/2025/10/Submission-ITAV-CELA-Economic-Reform-Roundtable-14-August-25.pdf
Creche and Kindergarten Association Limited. (2023, June). Productivity Commission: Creche and Kindergarten Association Limited. Productivity Commission. https://assets.pc.gov.au/__data/assets/pdf_file/0006/362778/sub155-childhood.pdf?_gl=1*1lwvxgj*_ga*MTAwNTU1MTEyMS4xNzc3OTYwNTUz*_ga_XNW84J8HF8*czE3ODQwMDk0
MzgkbzYkZzAkdDE3ODQwMDk0MzgkajYwJGwwJGgw
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https://www.education.gov.au/download/2994/inclusion-support-program-guidelines/45581/document/pdf
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Dickinson, H., Smith, C., Yates, S., & Faulkner, A. (2022). Taking the first step in an inclusive life: Experiences of Australian early childhood education and care. Report prepared for Children and Young People with Disability Australia (CYDA). https://cyda.org.au/wp-content/uploads/2023/08/SMALL_REP_CYDATakingFirstStep_Final_Dec22.pdf
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Young, E., & Campanella, N. (2024, June 21). Parents heartbroken by exclusion of son from kindergarten after epilepsy diagnosis. ABC News. https://www.abc.net.au/news/2024-06-21/guardian-childcare-education-disability-epilepsy/103974542
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