Still Working Towards the National Quality Standards?

The new Federal Law to withdraw Child Care Subsidy (CCS) access from services that are persistently Working Towards the National Quality Standards (NQS) has commenced.

Since becoming law on 2 August 2025, the Federal Government has identified 30 services across Australia that now have 6 months to improve or else they cannot receive CCS.

Some and not all of these 30 services (of which 7 are from NSW) will be from the 185 NSW-based services (as of 12 August 2025) that are persistently not at least Meeting the NQS.

NOTE: These 30 services (nationally) could represent up to 43.8% of NSW-based services that are Working Towards or Significant Improvement Required. That said, mathematically, 30 would also be less than 1% (ie 0.86%) of all NSW services.

For those persistently Working Towards the NQS or lower, it is worth noting the spread of the number of years between Assessment & Rating in NSW, especially when compared against all NSW-based services.

It is also worth noting the spread of the Quality Ratings for all NSW-based services too.

The Federal Department of Education has published their Strengthening Regulation of Early Childhood Education and Care Safety through the Child Care Subsidy - Provider Guidelines.

These Guidelines show the Federal Department's approach on how they are likely to identify which services they will use their new Federal Law on. Those services on Working Towards the NQS or lower should contrast the Federal Department's financial integrity compliance pyramid as well as their Provider Self-Assessment tool on themselves.

It is ACA NSW's understanding that those services that are approached by the Federal Department of Education will be formally notified of its intention to impose conditions, namely:

1. that the service must be assessed as Meeting the National Quality Standards within 6 months; and

2. the Approved Provider must notify all families enrolled at that service within 2 days that such a condition has been imposed.

The official notice of intention is likely to also include the reasons for their consideration to impose conditions, as well as invite written submissions as to why this action should not be taken by a certain date and time.

Regardless of the process, the service always has a right of review and, if warranted, the opportunity to challenge the Federal Department of Education's decision via the Administrative Review Tribunal.

For any further information/clarification/advice/assistance, members can contact the ACA NSW team via 1300 556 330 or nsw@childcarealliance.org.au.

UPDATED: 21 AUGUST 2025

FIRST PUBLISHED: 15 AUGUST 2025