Child Care Subsidy

The Complete Australian Guide

Choosing childcare is one of the biggest decisions families make — and understanding the Child Care Subsidy (CCS) is key to making it more affordable. This guide answers the following common Child Care Subsidy questions:

What is the Child Care Subsidy?
Who Is Eligible for Child Care Subsidy?
How Much Child Care Subsidy Will I Get?
How is the Child Care Subsidy Calculated?
How do I Apply for the Child Care Subsidy?

We provide you with the best answers, examples, and tips to help you make confident, cost-effective choices.

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What is the Child Care Subsidy?

The Child Care Subsidy (CCS) is the Australian Government’s main financial support program to help families pay for early childhood education and care. It is designed to make childcare more affordable and accessible, reducing the fees you pay when you use an approved service such as a long day care centre, family day care, outside school hours care, or certain preschool programs.

Rather than being paid directly to you, CCS is paid straight to your childcare provider, reducing your out-of-pocket costs each billing cycle. The goal is simple: to remove cost barriers so more children can benefit from early learning, and more parents can return to work, study, or training.

Key points to know about CCS:

• It’s a means-tested payment, based on your family income and activity level.
• The subsidy applies per hour of care and is calculated against a government-set hourly rate cap.
• You must be using an approved childcare service for CCS to apply.
• Most families receive a subsidy — in fact, the majority pay less than half of the advertised childcare fee once CCS is applied.

Why CCS matters: Early childhood education is linked to better learning, social, and emotional outcomes. CCS is part of the National Quality Framework to ensure all children — regardless of family income — can access quality care in their crucial first years.

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Upcoming CCS Changes

From 5 January 2026, the CCS activity test is being replaced by the Government’s new 3 Day Guarantee. That means all CCS-eligible families will have at least 72 hours of subsidised care per fortnight (about three days a week), and First Nations families will be eligible for 100 hours per fortnight. Between now and then, the usual annual indexation on 7 July 2025 will update income thresholds and hourly rate caps, so your CCS % (and out-of-pocket fees) may shift slightly.

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Annual Indexation and Threshold Updates

Each year on 7 July, the Australian Government applies annual indexation to the CCS income thresholds and hourly rate caps. This means your subsidy percentage may change slightly even if your circumstances stay the same. You can check the latest figures on eligibility or run a new estimate in our Child Care Subsidy Calculator.

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Who Is Eligible for Child Care Subsidy?

Most families in Australia qualify for some level of Child Care Subsidy (CCS), but there are specific eligibility requirements you must meet. You may be eligible if you:

• Have a child aged 13 or under who is not attending secondary school.
• Use an approved childcare service (such as long day care, family day care, OSHC, or certain preschool programs).
• Meet immunisation requirements for your child.
• Meet the residency requirements (you and/or your partner must be Australian citizens, permanent residents, or hold an eligible visa).
• Satisfy the activity test, which links your subsidy hours to your work, study, or other recognised activities.

Some families can also receive CCS in special circumstances — for example, if they are experiencing financial hardship, caring for a child at risk, or have a newborn. These cases may qualify for Additional Child Care Subsidy or exemptions to the standard activity test.

Child Care Subsidy – Age and Schooling

Your child must be aged 13 or under and not attending secondary school. If your child turns 14 during the financial year, your subsidy will generally stop at the end of that financial year. Children with a disability or additional needs may qualify for extended support in certain cases — see CCS tips for details on managing exemptions.

Child Care Subsidy – Residency Requirements

At least one parent or guardian must meet Australian residency criteria, such as being a citizen, permanent resident, or holding a recognised visa type. If you’re a temporary visa holder, you may still qualify — check with Services Australia for details.

Child Care Subsidy – Immunisation Requirements

To receive the Child Care Subsidy, your child must meet National Immunisation Program requirements, be on a recognised catch-up schedule, or have a valid exemption. Most families meet this automatically through standard vaccination programs.

Child Care Subsidy – Activity Test

The activity test connects your subsidised hours to the amount of recognised activity you (and your partner, if applicable) do. Recognised activity includes:

• Paid work, including self-employment
• Approved study or training
• Volunteering
• Actively looking for work
• Paid or unpaid parental leave

If both parents do different amounts of activity, Services Australia uses the lower figure to calculate your entitlement.

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How Much Child Care Subsidy Can You Get?

The amount of Child Care Subsidy (CCS) you receive depends on four main factors:

1. The type of childcare service – different hourly rate caps apply to long day care, family day care, outside school hours care (OSHC), and in-home care.
2. Your family income – determines the percentage of fees the government will subsidise.
3. Your activity level – determines how many hours per fortnight you can claim.
4. The hourly rate cap – the maximum hourly fee the government will subsidise.

1. Family Income and Subsidy Percentage

The Child Care Subsidy is calculated on a sliding scale. Families with lower incomes receive a higher subsidy, while higher-income families still receive support but at a reduced rate. As of the 2024–25 financial year, the thresholds are:

Combined Family Income	Subsidy Percentage
Up to $80,000	90%
$80,001 – $530,000	Gradually reduces from 90% to 0%
Above $530,000	0% (no CCS)

For every $3,000 over $80,000, the subsidy reduces by 1%. This tapering means many middle-income families still receive meaningful support.

2. Activity Test and Subsidised Hours

Your recognised activity determines the maximum number of subsidised hours you can claim per child, per fortnight:

Recognised Activity (per fortnight)	Subsidised Hours
0 – 8 hours	0 hours (unless exempt)
8 – 16 hours	36 hours
16 – 48 hours	72 hours
48+ hours	100 hours

Example:
If both parents work 20 hours per fortnight, you’re eligible for 72 subsidised hours per child. If one parent works 50 hours and the other 10 hours, your subsidy is based on 10 hours — so you’d still receive 36 hours per child.

3. Hourly Rate Caps Explained

The Child Care Subsidy isn’t calculated on your daily bill — it’s based on the hourly rate cap. This is the maximum hourly fee the government will subsidise for each care type. If your provider charges more than the cap, you’ll pay the difference.

Care Type	2024–25 Hourly Rate Cap (approx.)
Long Day Care	$13.73
Family Day Care	$12.72
Outside School Hours Care	$13.02
In-Home Care	$36.35

Example:
If your long day care centre charges $14.50 per hour and you’re entitled to a 90% subsidy, CCS will cover 90% of $13.73 — not 90% of $14.50. You’ll pay the gap.

Putting It All Together: The CCS Formula

A simplified way to think about it is:

Subsidy Paid = (Your CCS %) × (Lower of hourly fee or hourly cap) × (Eligible hours)

Example:

• Family income: $72,000 → 90% subsidy
• Hourly fee: $13.50 (cap: $13.73)
• Eligible hours: 100 per fortnight

Subsidy paid = 0.90 × $13.50 × 100 = $1,215 per fortnight
If the service fee was $15/hour, the calculation would use $13.73 instead of $15.

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The Child Care Subsidy Activity Test – What Counts and How It Works

The activity test is one of the most important — and most misunderstood — parts of the Child Care Subsidy. It’s how the government links the number of hours you can receive subsidised childcare to the amount of “recognised activity” you (and your partner, if applicable) do each fortnight.

What Counts as Recognised Activity

Recognised activity isn’t just full-time work. The list is broad and designed to reflect the different ways families participate in work, study, and community life. Activities that count include:

• Paid work – full-time, part-time, casual, contract, or self-employment.
• Approved study or training – including vocational education, university, or short courses that improve employment prospects.
• Volunteering – with a registered organisation or community group.
• Actively looking for work – including preparing resumes, attending interviews, or applying for jobs.
• Work experience or internships – unpaid placements that build employable skills.
• Paid or unpaid parental leave – including maternity, paternity, or adoption leave.

If you’re a couple, Services Australia will use the lower of the two parents’ recognised activity hours when calculating your entitlement. For example, if one parent works 50 hours and the other studies for 20 hours, your subsidy hours will be based on 20 hours.

Common Exemptions and Special Circumstances

Some families don’t meet the standard activity requirements but can still receive CCS due to special circumstances. You may be exempt from the activity test if:

• You’re the primary carer of a child at risk (as assessed by a provider or agency).
• You’re experiencing temporary financial hardship.
• You’re caring for a newborn (generally for the first 26 weeks).
• You receive certain income support payments, such as Parenting Payment or Carer Payment.

If you think you might qualify, it’s worth discussing your situation with Services Australia before assuming you’re ineligible.

Activity Test Scenarios – How It Works in Practice

• Example 1: A single parent working 18 hours a fortnight would be eligible for 72 subsidised hours of care per child.
• Example 2: A couple where one parent works 40 hours and the other volunteers for 10 hours would be eligible for 36 subsidised hours, based on the lower activity figure.
• Example 3: A parent on unpaid maternity leave is still considered to be undertaking recognised activity and remains eligible for CCS hours during that period.

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Hourly Rate Caps and Session Length – The Key to Maximising Your Subsidy

One of the most common sources of confusion for parents is how hourly rate caps and session lengths affect their CCS. The subsidy is calculated per hour, not per day or per week, and this small detail can have a big impact on your out-of-pocket costs.

How Hourly Caps Work

Each type of childcare service has a government-set hourly rate cap — the maximum hourly fee the subsidy will apply to. If your provider charges more than this, you’ll pay the difference. If they charge less, your subsidy is based on their actual fee.

For example:

• If your centre charges $13.00/hour and the cap is $13.73, your subsidy is based on $13.00.
• If they charge $15.00/hour and the cap is $13.73, your subsidy is based on $13.73.

Session Length and Its Impact

Childcare services often offer sessions of different lengths (e.g. 9-hour, 10-hour, or 12-hour days). Because the Child Care Subsidy is hourly, the session length changes the effective hourly fee.

For example:

• A 10-hour session costing $135 = $13.50 per hour
• A 12-hour session costing $135 = $11.25 per hour

In this example, the 12-hour session is subsidised more efficiently because the hourly rate is lower and stays under the cap. This means your out-of-pocket cost could be significantly reduced, even if the total daily fee is the same.

Why Your Costs Might Fluctuate

It’s normal for your childcare bill to vary month to month — even if your days and hours stay the same. Here’s why:

• Public holidays or pupil-free days – fewer days of care can affect subsidy totals.
• Casual or additional days – extra attendance increases your usage and cost.
• Income or activity changes – a higher income or lower activity hours may reduce your subsidy.
• Service fee changes – annual fee reviews or mid-year increases affect your hourly rate.

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Approved Childcare Types That Qualify for CCS

Not all childcare qualifies for CCS — it must be delivered by an approved provider that meets the National Quality Framework and reporting standards. Here’s a breakdown of the main types:

Long Day Care (LDC)

• Centre-based education and care for children aged 0–5.
• Usually open from 7am to 6pm, Monday to Friday.
• Offers structured learning programs aligned with the Early Years Learning Framework (EYLF).
• The most common type of care and fully CCS-eligible.

Family Day Care (FDC)

• Small group care in a registered educator’s home.
• Offers a more flexible and home-like environment.
• Often ideal for parents working irregular hours or seeking smaller settings.
• CCS applies the same way as centre-based care.

Outside School Hours Care (OSHC)

• Includes before-school, after-school, and vacation care for primary school-aged children.
• Can be particularly useful for working families with school-aged children.
• CCS applies to all OSHC services approved under the framework.

Kindergarten / Preschool (Within Approved Services)

• Early education programs focused on school readiness.
• CCS may apply if the program runs within an approved childcare service (e.g., a long day care centre).
• If the program is run by a school or state government outside the CCS system, subsidies may differ.

Occasional Care and In-Home Care

• Occasional care offers flexible, short-term care for families needing irregular hours.
• In-home care is available for families who can’t access other options due to complex needs, disability, remote location, or non-standard work hours.
• Eligibility criteria are stricter, but CCS may still apply if conditions are met.

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How to Apply for the Child Care Subsidy – Step-by-Step

Applying for the Child Care Subsidy isn’t difficult, but it’s important to get each step right to avoid delays or missed payments. Here’s a clear walkthrough of the process from start to finish.

1. Set Up Your myGov and Centrelink Accounts

If you haven’t already, create a myGov account and link it to Centrelink. This will be your main portal for submitting your claim, tracking progress, and managing your subsidy long term.

• Go to my.gov.au and create an account.
• Link the “Centrelink” service by following the on-screen instructions.
• Make sure your personal details and contact information are up to date.

2. Submit Your Child Care Subsidy Claim

Once your accounts are ready, you can submit a Child Care Subsidy claim online. Be prepared to provide:

• Personal details for you and your partner (if applicable)
• Estimated family income for the current financial year
• Details about your recognised activity (e.g. work hours, study load, volunteering)
• Information about your child, including their Customer Reference Number (CRN)
• Evidence of immunisation status

The claim usually takes around two to four weeks to process, but it can be quicker if all documents are provided upfront.

3. Enrol With an Approved Provider

Next, enrol your child with an approved childcare service. Once you do, the provider will submit an enrolment notice to Services Australia.

This notice confirms details such as the service type, days and hours of care, and start date. It’s a crucial step — CCS can’t be paid until the enrolment is confirmed.

4. Confirm Your Enrolment

Log in to your Centrelink online account and confirm the enrolment details. If anything looks incorrect (like days, start dates, or service type), contact your provider before confirming.

5. Keep Your Details Up to Date

Once your subsidy starts, it’s vital to update your details promptly if anything changes. This includes:

• Family income
• Work hours or activity level
• Childcare usage (e.g. more days or different sessions)
• Family structure (e.g. relationship changes or new children)

Failing to update your details can lead to underpayments, overpayments, or large end-of-year adjustments.

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Common Child Care Subsidy Mistakes – and How to Avoid Them

Even well-prepared families can make errors that affect their subsidy. Here are the most common pitfalls and how to prevent them:

1. Not Updating Income Estimates

If your income changes significantly during the year but you don’t update it, you could end up with an overpayment (and a bill at tax time) or underpayment (and missed support).

2. Forgetting to Confirm Enrolments

Your subsidy won’t start until you confirm your childcare enrolment. Many families overlook this final step after the provider submits the notice.

3. Ignoring Activity Changes

Your subsidy hours are based on your activity level. If you change jobs, increase or reduce work hours, or start studying, your Child Care Subsidy hours may change too.

4. Misunderstanding Hourly Rate Caps

Some families assume that the Child Care Subsidy covers a fixed percentage of their daily fee — but it’s actually based on hourly caps. This can lead to unexpected out-of-pocket costs.

5. Not Exploring Session Options

If your service only offers one session length, you might be paying more than necessary. Different session lengths can significantly change your hourly fee and subsidy amount.

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Additional Child Care Subsidy (ACCS) – Extra Help When You Need It Most

While the standard Child Care Subsidy helps most families, some situations require additional support. That’s where the Additional Child Care Subsidy (ACCS) comes in — a targeted payment for families facing extra challenges.

ACCS can cover up to 100% of the hourly rate cap and offer more subsidised hours than standard CCS. It’s designed to remove financial barriers so children in vulnerable circumstances can still access quality early education.

Types of ACCS

1. ACCS (Child Wellbeing) – For children at risk of abuse, neglect, or other safety concerns. Usually initiated by the childcare service in partnership with support agencies.
2. ACCS (Grandparent) – For grandparents who are the primary carers of their grandchildren. This can cover a significant portion — or all — of childcare costs.
3. ACCS (Temporary Financial Hardship) – For families who experience a sudden drop in income due to events like illness, job loss, or natural disasters.
4. ACCS (Transition to Work) – For parents moving into employment from income support. Provides higher subsidies during the transition period.

How to Apply for ACCS

The application process is similar to standard Child Care Subsidy but may require additional evidence to support your claim. In some cases, your childcare provider can help you start the process, especially for wellbeing-related applications.

• You must already be receiving CCS to qualify for ACCS.
• Applications are submitted through your Centrelink online account.
• Supporting documents (such as income evidence, legal documents, or agency letters) may be required.

Real-World Examples

• A grandparent raising two grandchildren full-time might have 100% of childcare fees covered, removing the financial burden entirely.
• A family experiencing sudden job loss may receive temporary ACCS support while searching for new employment.
• A parent escaping domestic violence could receive ACCS to ensure their child remains in stable, continuous care.

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Real-World Scenarios – How CCS Works in Everyday Situations

The best way to understand the Child Care Subsidy is to see how it plays out in real life. These examples show how family income, activity hours, and service choices combine to affect your final childcare costs.

Scenario 1: Two Working Parents With Full-Time Care

• Family income: $120,000
• CCS percentage: ~78%
• Activity: Both parents work full-time → 100 subsidised hours per fortnight
• Childcare fee: $130 per day for a 10-hour session (=$13/hour, below cap)

Calculation:
78% × $13 × 100 hours = $1,014 subsidy per fortnight

✅ Out-of-pocket cost: $286 per fortnight

Scenario 2: One Parent Working Part-Time, One Volunteering

• Family income: $85,000
• CCS percentage: ~88%
• Activity: One parent works 40 hours, the other volunteers 10 hours → lower figure used = 36 subsidised hours per fortnight
• Childcare fee: $135 per day for a 9-hour session (=$15/hour, above cap of $13.73)

Calculation:
88% × $13.73 × 36 hours = $434 subsidy per fortnight

✅ Out-of-pocket cost: $116 per fortnight

Scenario 3: Grandparent Primary Carer

• Family income: N/A
• ACCS type: Grandparent
• Subsidy: Up to 100% of the hourly rate cap
• Childcare fee: $12/hour (below cap)

Calculation:
100% × $12 × 100 hours = $1,200 subsidy per fortnight

✅ Out-of-pocket cost: $0

Scenario 4: Parent Returning to Study

• Family income: $65,000
• CCS percentage: 90%
• Activity: 20 hours of study per fortnight → 72 subsidised hours
• Childcare fee: $11/hour (below cap)

Calculation:
90% × $11 × 72 hours = $712.80 subsidy per fortnight

✅ Out-of-pocket cost: $79.20 per fortnight

Child Care Subsidy – FAQs

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Estimate Your Child Care Subsidy

Before you enrol — or whenever your circumstances change — it’s a smart idea to run the numbers. Our Child Care Subsidy Calculator can help you:

• Estimate your CCS percentage based on your income
• Calculate your likely out-of-pocket costs
• Compare different care types and session lengths
• Plan for returning to work or study

Use the Child Care Subsidy Calculator to get a quick, personalised estimate.

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Child Care Subsidy Tips

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Next recommended steps:

• Explore the Additional Child Care Subsidy (ACCS) in more depth.
• Read our guide on Understanding the National Quality Framework to choose a high-quality service.
• Visit the Find Childcare directory to search services in your area.