Two of the largest childcare centres in Port Stephens contacted by the Examiner this week - Angel Tots in Salamander Bay and TLC in Raymond Terrace - said they were extremely grateful for the federal government support payments at their time of need.

Both stated that attendance had fallen below 50 per cent since the lockdown was announced on August 5.

It was announced that new payments would benefit childcare services in affected areas of regional NSW after seven days of lockdown, with payments backdated to August 23.

Owners will be eligible for payments of 25 per cent of their pre-lockdown revenue.

Outside School Hours Care (OSHC) services will be eligible for payments of 40 per cent.

"Payments will be contingent on services: expecting attendance below 50 per cent; waiving gap fees for all families whose children are not attending; maintaining staffing levels; agreeing to a fee freeze for the duration of support; and not accessing other Commonwealth government-funded supports."

Angel Tots owner Karin Hensley said that the restrictions had been hard on families and on staff.

"We have managed to retain all our staff on reduced hours. Families are also suffering because it means kids are having to stay at home with a parent who may have been forced to temporarily give up work. We are all trying to do the right thing."

Claire Faraday-Bensley, owner of TLC Early Learning Centre, said that their numbers had dropped dramatically since the lockdown.

"We have seen our attendance numbers fall from 60 to about 20, but we have been able to retain all our staff on reduced hours. We are all going through tough times but we are determined to carry on ... for our community, for our families, for our staff."

The funding has also been welcomed by state and local governments.

Port Stephens Council operates Outside of School Hours and Family Day Care services under the banner of Thrive Kids.

These services have been impacted by the current COVID-19 lockdown restrictions which have seen many families keeping their children at home.

"Attendances at OOSH services have dropped by 80 per cent and attendances at FDC by 20 per cent. Currently 1759 families use council's Thrive Kids services," a council spokesperson said.

"Services will remain open during the current COVID-19 lockdown because they are considered an essential service. Our teams at Thrive Kids are implementing COVID safe practices and are committed to doing our bit to care for the community with health and safety as our top priority.

"The financial support is in principle a positive development, however we are waiting to learn further details about how the funding will be applied. We know that our services will not be eligible unless Port Stephens is a declared hotspot for a period of four weeks."

Australian Local Government Association president Linda Scott said the support package would help local government early education and care centres remain open, supporting parents and local communities.

"These are essential community services, caring for and educating our children and enabling parents to keep working in other front-line areas of need. They have helped support Australia through this pandemic, and they'll be vital for our continued economic recovery, so we're pleased the Federal Government has seen fit not to leave them financially vulnerable," she said.

Parliamentary Secretary for the Hunter Taylor Martin said it was critical that childcare services remain available to local parents as COVID-19 restrictions ease.

"This funding is just what the sector needs to ensure places and staff are retained even while most children are being cared for at home," he said.

State Minister for Education and Early Childhood Learning Sarah Mitchell said the sector was in desperate need of support in light of the significant impacts the COVID-19 pandemic was having on services.

"The NSW Government has been in constant consultation with the sector regarding the support they need. I am happy to see early childhood education and care services in NSW receive similar support from the Federal Government as to what was offered to Victoria last year. We will continue working with our childcare sector to ensure this Commonwealth package delivers the support they need to remain viable and continue delivering the essential services that so many parents and carers in NSW rely on," she said.

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