Worker Retention Payment and Quality Area 2: what services need to know.
From July 2027, services that do not meet Quality Area 2 of the National Quality Standard may have their funding cut or suspended. Here are the dates, who it applies to and what to do now.
The two dates.
Who it applies to
The condition applies to Centre Based Day Care, Outside School Hours Care and Family Day Care services. The Department of Education says about 95% of services already meet QA2.
What Quality Area 2 covers
Quality Area 2 is children’s health and safety. It has two standards.
- Standard 2.1, Health: wellbeing and comfort, health practices and procedures, and healthy lifestyle.
- Standard 2.2, Safety: supervision, incident and emergency management, and child safety.
If you’re rated below Meeting for QA2
Your provider should address any finding and seek reassessment from your state or territory regulator as soon as possible, and no later than 31 March 2027. Services that have done so and are still waiting will keep receiving funding until the reassessment is completed.
If you already meet QA2
Your rating reflects your last assessment. Teams change, and so do routines. It’s worth checking that supervision, incident management and child safety practice still hold up, and that your evidence is easy to find.
Other situations
- Not yet assessed under the NQF: these services may receive funding until they get their first QA2 rating.
- In a recognised quality uplift program: these services may continue to get funding until reassessed at the end of the program.
- Acquired by a new provider on or after 17 June 2026: these services can continue getting funding until reassessed, if the new provider meets QA2 across at least 90% of its existing services.
- In Home Care services not regulated under the NQF: these need to adopt the IHC Quality and Safety Framework from July 2027.
Where this comes from
This guide summarises the Department of Education’s eligibility and conditions page, checked on 31 October 2026. Rules can change, so check that page and the grant guidelines for your service. This is general information, not legal or financial advice. To the fullest extent the law allows, Yaga Smart isn't liable for decisions made in reliance on it, and your rights under the Australian Consumer Law aren't affected.
Quick answers
When does the QA2 condition start?
From July 2027, services that do not meet Quality Area 2 of the National Quality Standard may have their funding cut or suspended.
What is the deadline to seek reassessment?
If your service is rated below Meeting for QA2, your provider should address any finding and seek reassessment from the state or territory regulator as soon as possible, and no later than 31 March 2027.
Which services does it apply to?
Centre Based Day Care, Outside School Hours Care and Family Day Care services.
What if we’re still waiting for our reassessment?
Services that have sought reassessment by the deadline and are still waiting will continue to receive funding until the reassessment is completed.
Don’t wait for March.
Book a free 20-minute risk scan and find out where to start.