For many families, balancing rising living costs with high-quality early childhood education can feel like an impossible task.
The Child Care Subsidy (CCS) exists to make high-quality childcare more affordable and accessible, and recent updates from the Australian Government continue to provide meaningful support to households across the country.
In this guide, we break down what the childcare subsidy is in simple terms, explaining how it’s calculated, what’s changing, and how you can make the most of this scheme.
Key Takeaways
- Child Care Subsidy helps families cover childcare costs based on combined family income, activity hours, and the child care provider’s hourly rate.
- All CCS-eligible families now receive at least 72 hours of subsidised care per fortnight, regardless of activity level.
- The subsidy is paid directly to your approved child care service, reducing your out-of-pocket child care fees.
- Families with second and younger children under six may receive a higher subsidy rate.
- Additional Child Care Subsidy provides extra support for families experiencing temporary financial hardship or certain circumstances.
What Is the Child Care Subsidy?
The Child Care Subsidy (CCS) is financial assistance from the Australian Government to help families cover the cost of childcare at an approved childcare service.
The subsidy amount you receive is calculated based on several factors, including your family’s income, activity hours, and your childcare provider’s hourly rate.
“The CCS is a support system that really opens the door to quality early learning. Families are often surprised by how much support they’re actually eligible for once we walk through it together,” the team at Guardian Parramatta.
How Your CCS Is Calculated
Three main components determine your child care subsidy CCS percentage:
- Your combined family income
- Your level of recognised activity
- Your childcare provider’s hourly rate
Let’s look at each one more closely.
Your Family Income
Your family’s combined annual income determines what percentage of child care fees the government subsidises. Lower household income families can receive up to 90% subsidy, with the percentage gradually decreasing as income rises.
Thresholds are updated annually in each financial year. One of the most common mistakes families make is not updating income estimates. Doing that regularly ensures you receive exactly what you’re entitled to.
Number of Children in Care
If you have more than one child under the age of six in approved childcare, you may receive a higher subsidy for your second and younger children attending the same service, depending on your family’s income. This is a huge benefit for families with multiple younger children in early education and care.
Your Recognised Activity Level
Your hours of subsidised care depend on how much recognised participation activity you and your partner undertake. This includes far more than paid work. Everything from studying, volunteering, job hunting, and unpaid work in a family business may count toward your family’s activity hours.
Examples of recognised activities:
- Paid work (including commute time)
- Authorised leave, such as maternity or annual leave
- Study or training, including outside scheduled hours
- Volunteering
- Looking for work, including preparing for interviews
Your activity level determines how many subsidised hours you can access each fortnight through the activity test.
A Recent Update to Activity Levels
Recent Federal Government changes, popularly referred to as the three-day guarantee, mean all CCS eligible families can now receive at least 72 hours of subsidised care per fortnight. This is the equivalent of three days per week, regardless of activity level.
This is significant for eligible families with fluctuating schedules, limited activity hours, or those who are transitioning back to work.
Additional Child Care Subsidy (ACCS)
Some families may be eligible for the Additional Child Care Subsidy (ACCS), which provides extra support in certain circumstances.
This subsidised childcare assistance is available to help families who need additional support beyond standard CCS entitlements.
ACCS options include:
- Support for families experiencing temporary financial hardship.
- Transition to Work subsidies, covering up to 95% of fees for families returning to the workforce.
- Support for Grandparent Carers, offering up to 100 hours of subsidised care per fortnight.
- Support for families receiving certain income support payments.
These options ensure children can continue to access high-quality childcare during challenging times.
Additional Support for Aboriginal and Torres Strait Islander Children
Every Aboriginal or Torres Strait Islander child is eligible for at least 36 hours of subsidised care per fortnight, regardless of family activity level (unless an exemption applies).
This ensures consistent access to early learning that supports cultural identity, well-being, and school readiness.
Understanding CCS Hourly Rate Caps
The CCS amount is calculated using the lower of:
- Your child care service’s actual hourly fee, or
- The government’s hourly rate cap
The Australian Government recently increased the hourly rate cap, which may lower out-of-pocket childcare costs for some families using approved childcare services.
How is Child Care Subsidy Paid?
Once you’ve met the child care subsidy eligibility criteria and your application is approved through Services Australia, the subsidy is paid directly to your approved childcare provider on your behalf.
This means you only pay the gap amount (the difference between the full fee and your subsidy) to your childcare provider. You’ll see the reduced cost of childcare reflected in your invoices from the centre.
You can track your subsidy payments and hours through your myGov account linked to Services Australia, or via your Centrelink online account. Your customer reference number (CRN) will help you access these details easily.
How to Make the Most of Your CCS
Here are simple steps to ensure you’re receiving your full CCS entitlements:
- If you’re new to childcare: Apply for CCS as soon as possible. Claims can only be backdated 28 days through the Services Australia website.
- Update your family income: Report any changes to your combined income to avoid under- or over-payment.
- Track all recognised activities: Even small things like volunteer hours add up to increase your family’s hours of care eligibility.
- Check your hours regularly: Your hours of subsidised care may increase if your recognised participation changes.
- Meet residency and immunisation requirements: Ensure your child meets all immunisation requirements and residency requirements to maintain CCS eligibility.
- Use a child care subsidy calculator: Tools like Guardian’s CCS calculator help you estimate potential savings and understand your eligibility criteria.
- Talk to your Centre: Your child care provider can help you understand your specific situation.
“Our team helps families understand their CCS every day. We can walk through the calculations together so families feel confident and informed,” the team from Guardian Aspley.
Understanding the Child Care Subsidy can empower your family to access more care, reduce costs, and give your child the best possible start in life through quality early childhood education.
We’re Here to Help You Understand CCS
Navigating the Child Care Subsidy doesn’t have to be complicated. At Guardian Childcare, our friendly and knowledgeable teams are here to help you understand your CCS entitlements and get the most out of your subsidy.
Find your local centre and submit an enquiry or call 13 82 30 today. Let us help you navigate the CCS and find the perfect childcare solution for you and your family.
Frequently Asked Questions About Child Care Subsidy
How do I check my child care subsidy eligibility?
You can check your CCS eligibility through your myGov account or Centrelink account linked to Services Australia. You’ll need to confirm that you meet residency requirements, your child meets immunisation requirements, and you’re using an approved child care service. The eligibility criteria include your combined family income, activity hours, and whether you receive an income support payment or are in certain circumstances.
Can I get extra support if we’re experiencing temporary financial hardship?
Yes. Families experiencing temporary financial hardship may be eligible for Additional Child Care Subsidy (ACCS). This provides extra support and increased subsidised hours to help families maintain their child care while working through challenging financial situations. Contact Services Australia or speak with your child care provider to learn more about applying for this extra support.
How often should I update my income information with Services Australia?
You should update your family’s income information through your Centrelink online account whenever there’s a significant change, such as a new job, pay increase, or change in employment status. Services Australia reconciles your actual income each financial year, so keeping your estimate accurate helps you avoid owing money back or missing out on subsidised care per fortnight you’re entitled to. Regular updates ensure your subsidy amount stays accurate.
Does the CCS cover all child care fees, or will I still need to pay something?
Most families will have a gap payment, which is the difference between the hourly rate your childcare provider charges and your subsidy amount. The Child Care Subsidy CCS reduces your child care fees, but typically doesn’t cover the full cost of child care. How much you pay depends on your household income, activity test results, and your provider’s fees compared to the hourly rate cap set by the Australian Government.
