Kindergarten funding settings

What's changing in 2026

From 2026, funding and operational settings will change for kindergarten services in Victoria. These changes are designed to:

support the expansion of Pre-Prep
simplify funding for services
ensure funding is better targeted to reflect need.

These changes should be read alongside the Pre-Prep operational policy settings.

Per capita funding rates

Services offering sessional programs, services on the rural rate, non-government school services and local government run services will receive increased per capita rates in 2026.

Integrated long day care services that currently receive the Standard per capita rate (excluding local government and non-government school run services) will be funded at a slightly lower per capita rate in 2026.

View the 2026 kindergarten funding rates.

Standard Type 1 and 2 per capita rates

From 2026, the Standard per capita rate for long day care services will be split into the Standard Type 1 and Standard Type 2 per capita rates.
The following services that currently receive the Standard per capita rate will receive the Standard Type 2 per capita rate:

Sessional services (not operating under the Early Childhood Enterprise Agreements or approved equivalent agreement)
Long day care services operated by local governments
Long day care services operated by non-government schools.

All other long day care services that currently receive the Standard per capita rate will receive the Standard Type 1 per capita rate, except for priority cohort children. These services will receive the Standard Type 2 rate for priority cohort enrolments, for more details refer to new priority cohorts funding arrangements.

This ensures the funding rates are responsive to the context of different delivery settings and children's needs.

The Victorian Government continues to fund long day care services at the highest per capita rate in Australia. This reflects the important ongoing role of long day care services in the kindergarten sector.

Pre-Prep funding

All services will receive extra funding when they deliver extra Pre-Prep hours. Funding will be based on the number of funded hours each child is enrolled.

Funding streams that will increase with extra Pre-Prep hours include:

Free Kinder
per capita
ratio supplement for eligible services.

There will be no changes to School Readiness Funding (SRF) allocations for the 2025-2026 planning cycle.

SRF allocations for 2025-2026 already include funding for Pre-Prep (including priority cohorts).

From 2026, services delivering Pre-Prep will receive additional funding based on the number of Pre-Prep hours they deliver. Every extra hour of Pre-Prep delivered by the service leads to a proportional increase in funding.

Sessional services delivering Pre-Prep will receive:
- 100% of the relevant per capita rate for every hour of Pre-Prep they deliver
- 100% of the Free Kinder - Sessional rate for every hour of Pre-Prep they deliver
- 100% of the Ratio Supplement for every hour of Pre-Prep they deliver.
Long day care services that are paid the Standard Type 1 per capita rate will receive:
- 100% of the Free Kinder – long day care rate for every hour of Pre-Prep they deliver
- 100% of the Standard Type 1 rate for the first 15 hours
- a rate for every hour of Pre-Prep they deliver over 15 hours.
Long day care services that are paid the Standard Type 2, EA, rural or non-government school per capita rates will receive:
- 100% of the relevant per capita rate for every hour of Pre-Prep they deliver
- 100% of the Free Kinder – long day care rate for every hour of Pre-Prep they deliver.
Geographic Pre-Prep roll out: funding example
A long day care service is in a geographic Pre-Prep roll out area and receives the Standard Type 1 per capita rate. A child is enrolled in a 20-hour Pre-Prep program and is not a Priority Cohort enrolment.
The service will receive:
- the Standard Type 1 per capita rate and Free Kinder rate for 15 hours
- 5 hours of per capita funding at $209.44 per hour
- 5 hours of Free Kinder funding at 100% of the Free Kinder - Long Day Care rate.
This works out to be the following funding amounts:
Funding type First 15 hours Additional 5 hours (Pre-Prep) Child total
Per capita $3,601 $1,047 $4,648
Free Kinder $2,101 $700 $2,801

New priority cohorts funding arrangements

From 2026 for sessional services (regardless of their funding rate), a simpler funding approach will apply to all eligible children in Three-Year-Old Kindergarten, Four-Year-Old Kindergarten or Pre-Prep.
Children are eligible if they:
- identify as Aboriginal and Torres Strait Islander
- are from a refugee or asylum seeker background
- have had contact with child protection
- are or were supported by Early Start Kindergarten (ESK) or Access to Early Learning (AEL) in their Three-Year-Old Kindergarten year
- have (or have a parent or guardian who has) a Commonwealth concession card
- are from a multiple birth (triplets or more).
For children meeting the priority cohort funding criteria, funding will comprise:
- the applicable per capita rate (or the Standard Type 2 per capita rate where the applicable per capita rate is lower), and
- the Free Kinder sessional rate.
This replaces the Kindergarten Fee Subsidy in services not participating in Free Kinder.
Funding will be pro-rated based on children’s enrolled hours.
ESK will continue to apply for these children in Three-Year-Old Kindergarten. The ESK rate will be calculated as above.
These children will receive the Free Kinder sessional rate, even if the service has not opted in to Free Kinder. This ensures that eligible children can attend kindergarten at no cost.
In addition, there have been some changes to simplify the application process for ESK for children from refugee or asylum seeker backgrounds. For more information please see Early Start Kindergarten information for professionals.
From 2026 for all long day care services (regardless of their funding rate), a simpler funding approach will apply to all eligible children in Three-Year-Old Kindergarten, Four-Year-Old Kindergarten or Pre-Prep.
Children are eligible if they:
- identify as Aboriginal and Torres Strait Islander
- are from a refugee or asylum seeker background
- have had contact with child protection
- are or were supported by Early Start Kindergarten (ESK) or Access to Early Learning (AEL) in their Three-Year-Old Kindergarten year.
These children will receive the same funding amount across both kindergarten years. This approach will reduce complexity for families. Previously, these children attracted different funding rates in Three-Year-Old and Four-Year-Old Kindergarten.
For children meeting the priority cohort funding criteria, funding will comprise:
- the applicable per capita rate (or the Standard Type 2 per capita rate where the applicable per capita rate is lower), and
- the Free Kinder sessional rate.
This replaces the ESK extension and Free Kinder - long day care rate.
Funding for Three-Year-Old Kindergarten enrolments will be pro-rated based on children's enrolled hours up to 15. Where services deliver extra Pre-Prep hours, they will receive a rate for every hour of Pre-Prep they deliver over 15 hours.
ESK will continue to apply for these children in Three-Year-Old Kindergarten. The ESK rate will be calculated as above.
In addition, there have been some changes to simplify the application process for ESK for children from refugee or asylum seeker backgrounds. For more information please see Early Start Kindergarten information for professionals.
This change supports greater affordability for families. It also simplifies funding arrangements across the two years of kindergarten in long day care services.
Long day care services will have simplified funding arrangements for children meeting the four criteria set out above. Children from families who hold a Commonwealth concession card or are from a multiple birth (triplets or more) are not eligible for the simplified priority cohort funding in long day care services. These children will continue to attract the Free Kinder – long day care rate on top of their service’s per capita rate.

Baseline funding

Baseline funding is a minimum guaranteed level of funding provided to eligible kindergarten services. It is set at the time of Annual Confirmation based on the number of enrolments recorded at that point. If enrolment numbers fall during the year, the service will still receive funding at the baseline level. This gives funding certainty to services that have limited ability to adjust staffing or generate income outside of government funding.

From 2026, the following funding streams will be included in baseline funding for sessional services:
- per capita
- Free Kinder (where eligible)
- Priority cohort funding, ESK and AEL
- Ratio Supplement (where eligible)
- ECTS (where eligible).
This change ensures that sessional services can confidently plan staffing and program arrangements and remain financially viable, even if enrolments decrease during the year.
Long day care services have greater flexibility to adjust staffing based on enrolments.
From 2026, long day care services that are paid the Standard Type 1 per capita rate will no longer receive baseline funding. Instead, the point-in-time funding approach will ensure that long day care services receive their full funding entitlement for each child.
Baseline funding will continue for long day care services that are paid the Standard Type 2, EA, rural or non-government school per capita rates. The following streams will be included:
- per capita
- priority cohort funding (per capita component only), ESK and AEL
- ECTS (where eligible).

Point-in-time funding

From 2026, funding will be calculated based on when enrolments are entered into Arrival. This point-in-time funding calculations will make payments and reporting clearer.

Under this approach, providers will need to enter enrolment information into Arrival when each child enrols. This will help ensure services receive their full and accurate funding entitlements as early as possible.

Providers will have until 31 March 2026 to enter enrolment information into Arrival. Enrolments entered on or before this date will be funded from the start of the year.

From 1 April 2026 onwards, funding for each enrolment will begin from the first day of the month after the enrolment is entered into Arrival. For example, if a child’s enrolment is entered on 12 April, funding will begin from 1 May.

Similarly, children that cease during the month will have funding ceased from the start of the next month.

After 1 April 2026, payments will no longer be backdated for periods before a child’s enrolment is entered into Arrival. It is critical for service providers to ensure enrolments are entered promptly.

From 2026, monthly kindergarten payments will be made between the 4th and 7th day of each month. This is a change from the current approach, where payments are made on the first Tuesday of each month.

This change will ensure payments reflect the new monthly calculations and support a more accurate and timely funding process.

Why we are making this change

The current approach to funding involves constant recalculation of annual funding entitlements as enrolment numbers fluctuate. This includes backdating funding when enrolments are entered late.

The new approach will make payments and reporting clearer.

Early Childhood Teacher Supplement

From 2026, the method used to calculate the Early Childhood Teacher Supplement (ECTS) will change. The ECTS will be based on the number of more experienced teachers (at Level 2.5 and above) who lead kindergarten programs. ECTS will no longer be based on the number of enrolments.

Services that employ eligible teachers under the Victorian Early Childhood Teachers and Educators Agreement (VECTEA), Early Education Employees Agreement (EEEA), or another department-approved equivalent agreement will continue to receive the ECTS.

This includes long day care services that employ eligible teachers under one of the above agreements. Non-government school operated kindergarten services are not eligible for the ECTS.

Why the calculation is changing

This change better reflects the actual costs to of employing more experienced teachers. This will be particularly important for services with lower enrolment numbers, or where enrolments fluctuate from year to year.

It also allows the department to calculate and pay funding sooner, with less data required from services.

Who is eligible

ECTS will remain available to services that employ eligible teachers under the VECTEA, the EEEA, or an equivalent agreement approved by the department. This includes long day care services that have signed one of the agreements above.

Non-government school operated kindergarten services are not eligible for the ECTS.

Rural baseline funding

A base level of funding is provided to all rural classified kindergarten services with 18 or fewer enrolments. This supports the ongoing financial viability of these services.

This rural baseline funding will continue in 2026, with adjustments to reflect the introduction of Pre-Prep.

Services that are not delivering Pre-Prep in 2026 will see no changes.

For services delivering Pre-Prep programs in 2026, the rural baseline will increase in-line with the Pre-Prep hours they deliver (up to the geographic roll-out schedule). Enrolments will be counted using a full-time equivalent (FTE) approach. For example, a service delivering 20 hours of Pre-Prep will receive funding for 20 hours of kindergarten being delivered to at least 18 enrolments.

In this example:

each Pre-Prep enrolment (20 hours) counts as 1 FTE
each Three-Year-Old Kindergarten enrolment (15 hours) counts as 0.75 FTE.

ESK enrolments will be included in the baseline funding calculation, like all other Three-Year-Old Kindergarten enrolments.

Rural baseline funding example

A rural funded service located in a 2026 roll-out LGA is delivering a 20-hour per week Pre-Prep program with:

10 Pre-Prep enrolments (20 hours) = 10 FTE
10 Three-Year-Old Kindergarten enrolments (15 hours) = 7.5 FTE
Total FTE = 17.5

As this is under the 18 enrolment baseline, the service qualifies for rural baseline funding.

The service will receive funding for 20 hours of kindergarten being delivered to at least 18 enrolments.

Pre-Purchased Places

Pre-Purchased Places (PPP) will continue to help eligible children access a kindergarten place outside normal enrolment periods. PPPs reserve a funded place for children experiencing vulnerability or disadvantaged children who miss regular enrolment timelines.

Pre-Purchased Places are not available in long day care services.

Sessional services

In 2026, all PPPs will be paid at 20 hours to reflect the roll-out of Pre-Prep. PPPs can be used for eligible Three- and Four-Year-Old Kindergarten and Pre-Prep enrolments, even if they are enrolled for less than 20 hours.

Funding for Aboriginal Community Controlled Organisations

From 2026, Aboriginal Community Controlled Organisations (ACCOs) will benefit from increased funding that will provide more certainty and greater flexibility through a single per-child funding stream. This change will help ACCOs to deliver tailored programs that respond to the needs of their communities.

ACCOs delivering funded kindergarten programs will be funded through a new streamlined (per-child) funding rate that combines all other kindergarten funding streams. This new rate will be prorated for additional Pre-Prep hours.

ACCO-managed services will also now receive a minimum funding equivalent to 18 enrolments at the new ACCO rate.

This builds on Victoria’s commitment to improving outcomes for First Nations children and advancing self-determination.

Learn more about kindergarten funding changes for ACCOs.

More information and support

view the 2026 kindergarten funding rates
read the operational policies and funding settings
view the Pre-Prep roll-out schedule
contact your local Early Childhood Improvement Branch.

Early childhood

Updated 8 December 2025

Funding type	First 15 hours	Additional 5 hours (Pre-Prep)	Child total
Per capita	$3,601	$1,047	$4,648
Free Kinder	$2,101	$700	$2,801