Child Care Subsidy: the subsidy that can cover up to 90% of childcare costs

Childcare in Australia can cost between $1,500 and $3,000 per month per child. The Child Care Subsidy (CCS) is the Australian federal subsidy paid directly to your childcare provider — reducing what you pay on your invoice. Depending on your family income, it can cover up to 90% of the cost.

But the CCS is not a fixed amount. It has three variables that work together:

1. Subsidy percentage — depends on your annual family income. The lower the income, the higher the percentage.
2. Subsidised hours per fortnight — depends on each parent's participation in work or education. In 2026, with the new 3-Day Guarantee, the guaranteed minimum is 72 hours per child per fortnight.
3. Hourly Rate Cap — the government doesn't subsidise the full childcare fee, but only up to an hourly limit set by the type of service. If the centre charges more than this cap, the difference comes out of your pocket without subsidy.

1. Subsidy percentage by income

2. Subsidised hours per fortnight — 3-Day Guarantee (2026)

From 5 January 2026, the hours system was reformed. The old Activity Test (which calculated hours based on each parent's working hours) was replaced by the simpler 3-Day Guarantee model:

The 72 guaranteed hours apply per child — if you have two children in childcare, each one is entitled to their own subsidised hours.

3. Hourly Rate Cap — 2025-26

The government sets the maximum hourly amount used as the basis for calculating the subsidy. If the childcare centre charges more than this cap, the difference is paid by you in full, without any subsidy.

Practical examples

The examples below use a centre charging $15/hour (or $150/day for 10h), 4 days a week = 80 hours per fortnight.

The government cap is $14.63/hour, so the centre is $0.37/hour above the cap — that difference comes out of your pocket without subsidy.

Scenario 1 — Income $70,000 | Both parents working (100h entitlement)

• Income: $70,000 → below $85,279 → subsidy: 90%
• Hours used: 4 days × 10h = 80h/fortnight
• Subsidised hours: 80h (within the 100h entitlement)
• Subsidy per hour: 90% × $14.63 = $13.17
• Out-of-pocket per hour: $15.00 − $13.17 = $1.83
• Government pays: $13.17 × 80h = $1,053.60
• You pay: $146.40/fortnight → ~$293/month
• Full cost would be $2,400/month → you pay just 12% of the total

Scenario 2 — Income $135,000 | Both parents working (100h entitlement)

• Income: $135,000 → subsidy: 80%
• Subsidised hours: 80h (within the 100h entitlement)
• Subsidy per hour: 80% × $14.63 = $11.70
• Government pays: $11.70 × 80h = $936
• You pay: $264/fortnight → ~$528/month
• Full cost would be $2,400/month → you pay 22% of the total

Scenario 3 — Income $135,000 | One parent at home (72h entitlement)

• Income: $135,000 → subsidy: 80% (same as Scenario 2 — income doesn't change)
• Subsidised hours: 72h (guaranteed minimum — one parent at home doesn't block access)
• Unsubsidised hours: 8h (paid in full)
• Government pays: $11.70 × 72h = $842.40
• You pay: $3.30 × 72h + $15.00 × 8h = $357.60/fortnight → ~$715/month
• Full cost would be $2,400/month → you pay 30% of the total

Scenario 4 — Income $200,000 | Both parents working (100h entitlement)

• Income: $200,000 → subsidy: 67%
• Subsidy per hour: 67% × $14.63 = $9.80
• Government pays: $9.80 × 80h = $784
• You pay: $416/fortnight → ~$832/month
• Full cost would be $2,400/month → you pay 35% of the total

Scenario 5 — Income $200,000 | More expensive centre ($18/hour)

• Income: $200,000 → subsidy: 67% (same as Scenario 4)
• Centre fee: $18.00 | Government cap: $14.63 → uses the cap (lower)
• Gap above cap: $18.00 − $14.63 = $3.37/hour (no subsidy on this)
• Subsidy per hour: 67% × $14.63 = $9.80
• Out-of-pocket per hour: $18.00 − $9.80 = $8.20
• Government pays: $9.80 × 80h = $784
• You pay: $656/fortnight → ~$1,312/month

Scenario 6 — Income $70,000 | Two children in childcare (ages 2 and 4)

When there are two children aged under 5 and family income is below $367,563, the younger child receives a higher subsidy.

Older child (age 4):

• Standard subsidy: 90% × $14.63 = $13.17/hour → government pays $1,053.60 per fortnight
• You pay: $146.40/fortnight

Younger child (age 2):

• Higher subsidy (second child): 95% × $14.63 = $13.90/hour
• Government pays: $13.90 × 80h = $1,112 per fortnight
• You pay: $88/fortnight

Total per fortnight (two children): you pay $234.40 → ~$469/month Full cost for both would be $4,800/month → you pay just 10% of the total

If you have children, it's also worth checking the Family Tax Benefit — it's a separate benefit from the CCS, and many eligible families never claim it.

Who is eligible for the CCS?

To receive the CCS, your family must meet three criteria at the same time: eligible visa, parental participation, and up-to-date vaccinations.

1. Visa — who is included

On the day you apply for the subsidy, you or your partner must be living in Australia and hold one of the following:

Full entitlement

• Australian citizens
• Holders of a permanent visa (any PR subclass)
• Holders of a Special Category Visa (SCV) — New Zealand citizens

Partial entitlement (eligible temporary visas)

• Subclass 820 – Partner visa (provisional, onshore)
• Subclass 309 – Partner visa (provisional, offshore)
• Subclass 785 – Temporary Protection Visa
• Subclass 790 – Safe Haven Enterprise Visa
• International students receiving financial assistance from the Australian government
• Cases of proven hardship or special circumstances

Generally NOT eligible

• Tourist visa (subclass 600)
• Student visa (subclass 500) — unless receiving an Australian government scholarship
• Temporary work visa 482 (TSS)
• Visa 485 (Graduate Visa)

2. Parental participation — the new model (3-Day Guarantee)

What changed in January 2026

Until the end of 2025, the number of subsidised hours depended directly on how many hours each parent worked, studied or volunteered. From 5 January 2026, this system was replaced by the 3-Day Guarantee model. The logic is now simpler:

What counts as "recognised participation"?

• Paid work — formal employment, casual, part-time, self-employed
• Paid or unpaid parental leave
• Study or training — approved course, university, vocational training
• Volunteering — limited to the first 16 hours per fortnight if it's your only activity
• Active job seeking — limited to the first 16 hours per fortnight
• Setting up a business — for up to 13 fortnights within a 12-month period

How is it calculated for couples?

The government uses the parent with fewer hours of activity as the reference. It's not a sum — it's the lower of the two that determines the outcome.

Example: Parent A works 60h/fortnight and Parent B works 20h/fortnight. The lower is 20h, below 48h → 72 subsidised hours (guaranteed minimum).

Example: Both work 50h+ per fortnight → both above 48h → 100 subsidised hours.

Situations with automatic exemption (100 hours)

• Families in risk or vulnerable situations (ACCS — Additional Child Care Subsidy)
• Parents on documented medical leave
• Special circumstances approved by Centrelink

3. Up-to-date vaccinations

To be eligible for the CCS, your child must be up to date with all vaccinations on the Australian childhood immunisation schedule (National Immunisation Program), or have an approved medical exemption.

If your child came from another country, you'll need to register their vaccination history in the Australian system (AIR — Australian Immunisation Register) or have the missing vaccines administered. Without this registration, the subsidy can be blocked even if your child has already received all doses.

How to apply

The process can take a few days to a few weeks. Apply as soon as you know which childcare centre your child will attend — ideally before they start.

Declaring your income correctly

The CCS is calculated based on your estimated income for the current financial year. At the end of the year (July), the government reconciles the estimate against your actual income. If you underestimated your income, you may have to repay part of the subsidy received.

So be realistic with your estimate. If your income changes during the year (new job, promotion, change in hours), update it on myGov.

The most common mistake: waiting to apply

Many families pay the full childcare fee for months without knowing they're entitled to the CCS. The subsidy is not backdated — you only receive it from the date you applied. The sooner you apply, the better.

If you already have a child in childcare and haven't applied yet: stop now and do it today.