CWELCC Rolling Top-Up in 2026: Which Calculation Method Applies to Your Centre?

If your Ontario licensed child care centre received a legacy top-up, growth top-up, or rolling top-up in 2025, you are entitled to a rolling top-up in 2026. The rolling top-up exists to ensure that centres with cost structures that exceed the Schedule A benchmark allocation are not left with a funding gap from one year to the next.

But the 2026 rolling top-up calculation is not straightforward. There are two distinct calculation methods - and which one applies to your centre depends on a specific eligibility condition most operators have not fully worked through.

This guide explains both methods in plain language, walks through how the provisional and confirmed calculations work, and covers the cost review trigger operators need to be aware of.

What Is the Rolling Top-Up?

The rolling top-up is a component of your Program Cost Allocation. It exists because the Ministry's Schedule A benchmark rates represent typical costs for Ontario child care centres - but not every centre's cost structure aligns with the benchmark. Some centres have higher legitimate eligible costs than the benchmark covers, due to geography, setting, staffing structure, or other factors.

In 2025, the legacy top-up addressed this gap for centres that had been in CWELCC since before August 14, 2024. For 2026 and every year after, the rolling top-up carries that support forward - but it is recalculated each year based on the prior year's actual eligible costs and benchmark allocation.

Rolling top-up only applies if your centre received a top-up of any kind in the previous calendar year - legacy top-up, growth top-up, or rolling top-up. If you received no top-up in 2025, your rolling top-up for 2026 is zero.

Two Calculation Methods: Which Applies to You?

The Ministry's 2026 guidelines distinguish between two types of eligible centres for rolling top-up purposes.

Method 1: The 1.02 Factor Method

This method applies to eligible centres with no licensed capacity for eligible age groups (children ages 0 to 5) - meaning centres that serve school-age children only but are still enrolled in CWELCC.

For these centres, the rolling top-up is calculated by multiplying the amount of the legacy top-up or rolling top-up received in the previous calendar year by 1.02.

This is the simpler method. It essentially inflates the prior year top-up by 2 per cent to account for cost escalation, without requiring knowledge of actual eligible costs.

Example: If your centre received a rolling top-up of $15,000 in 2025, your 2026 rolling top-up using the 1.02 factor method would be: $15,000 x 1.02 = $15,300.

Most Ontario licensed child care centres serving children ages 0 to 5 will NOT use this method. The 1.02 factor applies in a narrow set of circumstances - primarily centres licensed as school-age only that remain enrolled in CWELCC.

Method 2: The Standard Ratio Method

This method applies to all other eligible centres - which means the vast majority of Ontario licensed child care centres serving children ages 0 to 5.

The standard ratio method has two stages: a provisional calculation and a confirmed calculation.

Stage 1: Provisional Calculation

At the start of 2026, your SSM calculates a provisional rolling top-up before your 2025 actual eligible costs are known. The provisional calculation works as follows:

Step 1: Calculate the rolling top-up ratio using prior year allocation data: Rolling Top-Up Ratio = Sum of all top-ups in your 2025 Program Cost Allocation divided by Total 2025 benchmark allocation (including any in-year adjustments).

Step 2: Multiply the rolling top-up ratio by your 2026 benchmark allocation: 2026 Rolling Top-Up (provisional) = Rolling Top-Up Ratio x 2026 benchmark allocation.

If there were no top-ups in your 2025 Program Cost Allocation, the rolling top-up ratio is zero and no rolling top-up applies.

Example: Your 2025 allocation included a benchmark allocation of $400,000 and a legacy top-up of $60,000, for a total Program Cost Allocation of $460,000. Rolling top-up ratio: $60,000 / $400,000 = 15%. Your 2026 benchmark allocation is $420,000. 2026 Rolling Top-Up (provisional): 15% x $420,000 = $63,000. Your provisional 2026 Program Cost Allocation: $420,000 + $63,000 = $483,000.

Stage 2: Confirmed Calculation

Once your 2025 actual eligible costs are determined at reconciliation, the provisional rolling top-up is replaced by a confirmed calculation. This is mandatory under the Ministry guidelines - the confirmed calculation must replace the provisional one.

Step 1: Subtract your total 2025 benchmark allocation (including in-year adjustments) from your 2025 actual eligible costs. If the result is negative (meaning your actual eligible costs were lower than your benchmark), the rolling top-up ratio is zero and no rolling top-up applies. If the result is positive (meaning your actual eligible costs exceeded your benchmark), divide the result by your total 2025 benchmark allocation to get the confirmed rolling top-up ratio.

Step 2: Multiply the confirmed rolling top-up ratio by your 2026 benchmark allocation: 2026 Rolling Top-Up (confirmed) = Confirmed Ratio x 2026 benchmark allocation.

Continuing the example: 2025 actual eligible costs (from reconciliation): $445,000. 2025 benchmark allocation: $400,000. Confirmed rolling top-up ratio: ($445,000 - $400,000) / $400,000 = $45,000 / $400,000 = 11.25%. 2026 Rolling Top-Up (confirmed): 11.25% x $420,000 = $47,250.

Notice that the confirmed amount ($47,250) is lower than the provisional amount ($63,000). This is common - the provisional calculation uses the prior year top-up allocation, while the confirmed calculation uses actual eligible costs, which may be lower than the allocation.

The difference between provisional and confirmed rolling top-up affects your in-year funding payments - your SSM will adjust your allocation once the confirmed figure is known.

Why the Confirmed Amount Is Often Lower Than the Provisional

The provisional rolling top-up ratio is based on the top-up that appeared in your 2025 Program Cost Allocation - not what you actually spent. If your actual 2025 eligible costs came in below your Program Cost Allocation, the confirmed ratio will be lower than the provisional ratio.

This is one of the most common surprises operators encounter when their 2026 allocation is finalized. The provisional rolling top-up set expectations, but the confirmed calculation based on actual costs reduces it.

This is exactly why tracking your actual eligible expenses monthly against your Program Cost Allocation is critical - not just for avoiding year-end recoveries, but for understanding what your rolling top-up will look like in the following year.

The Cost Review Trigger

Centres with high rolling top-up ratios are subject to cost review selection by their SSM. Specifically, if your rolling top-up ratio exceeds the Schedule C Growth Multiplier for your CMSM or DSSAB, you are eligible to be selected for a cost review.

Under the Ministry guidelines, SSMs must select and engage the top 10 per cent of existing centres in descending order of top-up ratio for a cost review by March 31 of each calendar year.

A cost review is not necessarily punitive - its purpose is to identify whether any cost reductions are possible, and in many cases the SSM will find that the high costs are justified by the centre's specific circumstances. However, if opportunities for cost reduction are identified, the SSM can reduce your Cost-Based Funding Allocation on a schedule.

Centres subject to a cost review in one year cannot be selected again in the following year, as long as they continue to work on the identified cost reduction actions.

To know whether your rolling top-up ratio exceeds your CMSM or DSSAB's Schedule C Growth Multiplier, you need to know both numbers. ChildcareFundingIQ displays the Schedule C Growth Multiplier for all 47 Ontario CMSMs and DSSABs and calculates your rolling top-up ratio as part of your full 2026 allocation.

Key Takeaways for Ontario Licensed Child Care Centres

Rolling top-up applies only if you received a top-up in the previous year. If your 2025 Program Cost Allocation included no top-up of any kind, your 2026 rolling top-up is zero.

Most centres use the standard ratio method. The 1.02 factor method applies only to centres with no licensed capacity for children ages 0 to 5.

The provisional calculation will likely change. Once your 2025 actual eligible costs are confirmed at reconciliation, your SSM must replace the provisional rolling top-up with the confirmed amount. Plan for this adjustment.

Spending below your Program Cost Allocation in 2025 reduces your 2026 rolling top-up. The confirmed ratio is based on actual eligible costs, not the allocation you received. Under-spending in 2025 has a direct impact on your 2026 rolling top-up entitlement.

High rolling top-up ratios attract SSM scrutiny. If your rolling top-up ratio exceeds your CMSM or DSSAB's Schedule C Growth Multiplier, you may be selected for a cost review in 2026.

Calculating Your Rolling Top-Up

The rolling top-up calculation requires your 2025 benchmark allocation, your 2025 actual eligible costs (from reconciliation), your 2025 top-up amounts, and your 2026 benchmark allocation based on your 2026 service plan.

ChildcareFundingIQ calculates your 2026 rolling top-up as part of your full Program Cost Allocation using your specific inputs. Enter your 2025 rolling top-up ratio and the tool applies it to your 2026 benchmark allocation - so you can see the impact of your rolling top-up alongside your full Schedule A benchmark, growth top-up, Allocation in Lieu of Profit/Surplus, and fee offset in one connected calculation.