Important Information: 2021 Free Kinder For Long Day Care Services

The following update has been provided by the Victorian Government for Long Day Care services.


Treatment of Free Kinder Payments with respect to the Child Care Subsidy

The Commonwealth Government recently provided Victorian early childhood education and care services with advice on the application of Free Kinder payments in 2021. This advice details that the Victorian Government can contribute funding to reduce the out-of-pocket fees for families, without it impacting their Commonwealth Childcare Subsidy (CCS). The advice is available here.


This means that families can receive the full benefit of up to the $2,000 Free Kinder payment in CCS funded long day care services.


Administration of Free Kinder payments

  • Fee reductions for Free Kinder should be made regularly across the year to families’ bills, e.g. weekly, fortnightly or monthly. For example, this could be a monthly credit to families’ accounts or calculated based on how the kindergarten program is structured (e.g. applying a $50 per week fee offset for 40 weeks). Lump sum payments, e.g. for the whole year or a term should not be used.
  • However the fee reduction is applied, the full $2,000 benefit must be provided for eligible children enrolled for the whole kindergarten year. If a family’s out of pocket costs are less than $2,000 across the year, the family should pay no fees and any surplus should be invested to support the kindergarten program.
  • The fee reduction should be identified as ‘Victorian Free Kinder 2021 fee offset’ on families’ accounts, and it should be clear that the offset has been applied after the family’s CCS benefit.
  • Free Kinder funding from the Department will work in the same way as normal kindergarten funding when children leave or commence at the service throughout the year.

Free Kinder payments to providers

  • For the majority of services that have already opted in to Free Kinder, a payment equivalent to three months of Free Kinder funding (for January, February and March) is currently being processed and you should receive this payment this week.
  • Payments for funded enrolments have been made based on your service’s pre-confirmed enrolments (i.e. last year’s enrolments numbers) and will be adjusted to reflect current enrolments following Annual Confirmation.
  • Services that haven’t yet opted in but do so by COB Wednesday 10 February will have their first payment processed next week. The first payment will be a lump sum equivalent to three months of Free Kinder funding. To opt in to Free Kinder, please complete this short form.  
  • From April recurring monthly payments will be provided through KIM for the remainder of the year, as per regular kindergarten funding.

Further information

For further information, please see the Free Kinder webpage or contact your Departmental regional office