What is the Child Care Subsidy (CCS)?

The Child Care Subsidy – A Go-To Guide for Families

For many Australian families, balancing rising living costs with the expenses of early childhood education can cause significant financial strain. Thankfully, there are government-funded programs designed to ease the burden. 

The Child Care Subsidy (CCS) exists to make high-quality childcare more affordable and accessible, and recent updates from the Australian Government offer even more 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, the latest guidelines, and how to apply for funding that could make a huge difference to your family’s finances.

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 the details of each one more closely.

Your Family Income

Your family’s combined annual income determines what percentage of childcare fees the government subsidises. In 2025-26, families earning up to $535,279 may be eligible for support through the Child Care Subsidy. 

For those earning below $85,279, a generous 90% subsidy is available, significantly reducing out-of-pocket expenses. The percentage gradually decreases as income rises. For a full explanation of how your income affects your subsidy percentage, visit the Services Australia page on how income affects your CCS.

Guardian’s Expert Tip: Income thresholds and subsidy entitlements are updated annually in each financial year. One of the most common mistakes families make is not updating their 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 aged 5 or under in approved childcare, you may receive a higher subsidy for your second and younger children, depending on your family’s income. 

Families earning less than $367,563 with multiple children could receive up to 95% for their younger children. Your children don’t need to attend the same service for this higher rate to apply. 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 more than ordinary 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 include:

• 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. If you have a partner, Services Australia uses the lower of your two activity levels when calculating your entitlement above the 72-hour baseline, so it’s worth both partners tracking and reporting their recognised activities.

A Recent Update to Activity Levels

From 5 January 2026, Federal Government changes known as the three-day guarantee mean all families eligible for CCS 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.

Families where each partner does more than 48 hours per fortnight in a recognised activity (such as work, volunteering, or training and education) may be eligible for five days of subsidised care per week (100 hours per fortnight).

This is significant for eligible families with fluctuating schedules, limited activity hours, or those who are transitioning back to work. For full details on what changed in January 2026, see the Services Australia overview of CCS changes and the three-day guarantee.

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 children at risk of serious abuse or neglect (Child Wellbeing).
• 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.

These options ensure children can continue to access childcare during challenging times. For more information on each category and how to apply, visit the Services Australia Additional Child Care Subsidy page.

Additional Subsidies for Children Aged 3-5

There are additional subsidies on top of the Child Care Subsidy for families with children aged 3-5 attending a government-approved preschool or kindergarten program. For more information, visit our fee support information page.

Additional Support for Aboriginal and Torres Strait Islander Children

Every Aboriginal or Torres Strait Islander child is entitled to 100 hours of subsidised care per fortnight, regardless of the family’s level of recognised participation (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

In July 2025, changes to the Child Care Subsidy took effect, making childcare more accessible and affordable. Higher income thresholds and adjustments to the hourly rate cap have meant families can qualify for greater support and save more on out-of-pocket fees.

How to Apply for the Child Care Subsidy

• Set up a myGov account if you don’t already have one, and make sure you have a customer reference number (CRN).
• Link your Centrelink online account to myGov.
• Verify your identity. You can do this online or in person at a Services Australia service centre.
• Gather your supporting documents, including payslips, your child’s birth certificate, and immunisation records.
• Submit your documents through your Centrelink online account, the Express Plus Centrelink mobile app, by mail, or in person at a service centre.
• Lodge your CCS application via myGov.
• Confirm your child’s enrolment. Once you’ve lodged your claim, your Guardian centre will submit your child’s enrolment details through the government system. You’ll then need to confirm this enrolment in your myGov account before CCS payments can begin, so keep an eye out for the notification.
• Receive your assessment. Services Australia will notify you of your entitlements, including your subsidy percentage and subsidised hours, so everything is in place before your child starts.

Most claims are assessed within a few days, though processing times can vary.

For full details on the application process, including step-by-step guidance on completing your CCS assessment, visit the Services Australia CCS application page.

Guardian’s Expert Tip: When it comes to CCS applications, the golden rule is to apply early, ideally before your child’s first day of care. Claims can only be backdated 28 days, so applying ahead of time ensures you don’t miss out on any entitlements.

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.

A common source of confusion is that the government automatically withholds 5% of your CCS each fortnight. This 5% is a built-in buffer to protect against overpayments. At the end of the financial year, your payments are reconciled against your actual income:

• If you haven’t been overpaid, the withheld amount is returned to you. 
• If your income was higher than estimated, the withheld amount helps offset what you owe. 

This is another reason why keeping your income estimate up to date throughout the year is so important.

You can track your subsidy payments and hours through your myGov account linked to Services Australia, or via your Centrelink online account. Having your customer reference number (CRN) handy will help you access these details easily.

How to Make the Most of Your CCS

Here are a few tips and tricks 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. You can use the Services Australia eligibility tool to guide you through the application process.
• 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.
• Keep your child attending regularly: CCS eligibility stops if your child doesn’t attend care at least once in any 26-week period. If that happens, you’ll need to submit a new claim. This is worth knowing if you’re planning an extended break or period of travel.
• Confirm your income each year: After each financial year ends, you need to confirm your family’s actual income with Services Australia, usually by lodging a tax return. If you miss the deadline, your CCS can stop. See the Services Australia guide to income confirmation deadlines for exact timeframes.
• 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’s team: If you have any questions that you’re struggling to find answers to, your childcare provider can give you advice specific to your situation.

“Our team helps families understand their CCS every day. We can go through the calculations together so families feel confident and informed,” the team from Guardian Aspley.

Understanding the Child Care Subsidy can enable your family to access more care, reduce costs, and give your child the best possible start in life through quality early childhood education. 

At Guardian, we believe every child should have access to care that puts them first. Hopefully this guide will help you secure any financial support your family is eligible for so your child has the best possible start.  

We’re Here to Help You Understand CCS

Taking care of your family can be complicated, but getting the most out of the Child Care Subsidy program doesn’t have to be. 

At Guardian Childcare, our friendly and knowledgeable teams are here to help you understand your CCS entitlements and make sure you get maximum value from the program.

Book a tour at your local Guardian or call 13 82 30 to get all your CCS questions answered. Let our friendly team help you find the perfect childcare solution for you and your family.