Commonwealth Outcomes Fund
Purpose of the fund
The fund supports governments and service providers to test and refine reforms that address entrenched disadvantage.
It uses outcomes‑based contracting to:
- build evidence about what works
- strengthen collaboration across jurisdictions
- support scaling of effective approaches over time.
The fund supports broader government priorities. This includes the Early Years Strategy and an increased focus on prevention and early intervention to achieve better long‑term outcomes.
Establishing the fund
The Commonwealth Outcomes Fund was announced as part of the $199.8 million entrenched disadvantage package in the 2023–24 Budget.
The Australian Government committed:
- $100 million to establish the Commonwealth Outcomes Fund
- $5.5 million in the 2024–25 Budget to implement the fund.
The fund will make payments to state and territory governments as well as to service providers and social enterprises.
Payments are linked to achieving agreed outcomes.
We will implement the fund over up to 10 years. This allows time for:
- program design
- service delivery
- outcomes to be achieved
- final payments to be made.
Focus areas
The first round of the fund supported projects in three focus areas:
- Supporting families and children
- Overcoming barriers to employment
- Supporting people facing or experiencing homelessness.
Investment portfolios
Rounds 2 and 3 of the fund will narrow these focus areas into two portfolios:
- Keeping Kids Safe at Home
- Overcoming Barriers to Employment.
Parameters for each portfolio will be developed through a multi-jurisdictional co-design process in early 2026.
Portfolio 1: Keeping Kids Safe at Home
This portfolio focuses on early intervention and prevention to improve outcomes for children and families. It aims to reduce demand for child protection and out‑of‑home care services.
Projects may include initiatives that:
- build family capacity to provide safe and stable homes
- reduce entries into out‑of‑home care
- support families through early, community‑based supports.
Culturally appropriate and community led responses for First Nations families are strongly encouraged. Projects should align with the National Agreement on Closing the Gap, particularly Target 12.
Portfolio 2: Overcoming Barriers to Employment
This portfolio supports collaborative approaches to addressing long-standing barriers to employment and responding to labour market disruption.
Projects should:
- integrate with existing employment services and be scalable over time
- support sustained employment outcomes.
The Australian Government will prioritise projects that:
- reduce long‑term welfare reliance
- create jobs and clear job pathways
- support people facing multiple or complex barriers to work.
States and territories are invited to partner with the Australian Government through complementary initiatives. These may include:
- stimulating economic activity in disadvantaged communities
- community asset buy‑backs
- establishing or growing local businesses
- care sector and workforce reforms that support employment.
How the fund works
The fund delivers outcomes‑based projects through three targeted commissioning rounds.
Four projects were selected through Round 1 in 2024. Learn more at Commonwealth Outcomes Fund projects.
Two further rounds will commence from 2026. Rounds 2 and 3 will focus on government priorities and support prevention, early intervention and long‑term impact.
Round 2: State and territory led projects
States and territories will be invited to submit project proposals between May 2026 and February 2027.
Projects must align with one of the two portfolios:
- Keeping Kids Safe at Home, or
- Overcoming Barriers to Employment.
Service delivery is expected to begin from late 2026.
Round 3: Direct commissioning with service providers
The Australian Government will provide grants directly to service providers for projects under the Overcoming Barriers to Employment portfolio.
The Community Grants Hub will manage the grant process.
Grant applications are expected to open in late 2026.
More information
Email OutcomesFund@dss.gov.au.