child care subsidy 2026: the complete guide for australian families
catherine is an early childhood policy researcher and mother of two from melbourne. she writes about the intersection of government policy and everyday family life.
last updated: april 2026
child care in australia is expensive — but the child care subsidy (CCS) makes a genuine difference. if you are a working parent (or about to return to work), understanding how CCS works can save your family thousands of dollars a year.
this guide covers everything you need to know about the child care subsidy for the 2025-26 financial year, including the latest rates, income thresholds, hourly caps, the activity test, and how to apply. if you just want a quick number, try our CCS calculator.
what is the child care subsidy?
the child care subsidy is a government payment that reduces the cost of approved child care for australian families. it is paid directly to your child care provider, who then passes the reduction on to you as a lower fee.
CCS replaced the older child care benefit and child care rebate in 2018. it is administered by services australia through centrelink.
the amount of subsidy you receive depends on three things:
- your family's combined income
- the activity level of both parents (hours of work, study, or training)
- the type of child care service you use
CCS rates for 2025-26
for the 2025-26 financial year (1 july 2025 to 30 june 2026), the maximum subsidy rate is 90%. this is available to families earning $83,280 or less in combined income. as your income rises, the subsidy percentage gradually tapers down.
income thresholds and CCS percentages
| family income | CCS rate |
|---|---|
| $83,280 or less | 90% |
| $83,281 – $113,280 | 90% – 85% |
| $113,281 – $183,280 | 85% – 50% |
| $183,281 – $353,280 | 50% – 20% |
| $353,281 – $536,432 | 20% – 0% |
| above $536,432 | 0% |
income thresholds are indexed each financial year. the figures above apply from 1 july 2025.
want to see exactly what you would get? use our child care subsidy calculator or check a specific income level like $100k, $150k, or $200k.
hourly rate caps for 2025-26
the CCS is calculated on the lesser of your actual hourly fee or the government's hourly rate cap. if your centre charges more than the cap, you pay the difference on top of your gap fee.
| care type | hourly rate cap |
|---|---|
| centre-based day care (CBDC) | $14.63/hr |
| family day care (FDC) | $12.81/hr |
| outside school hours care (OSHC) | $12.81/hr |
what does this mean in practice?
say your long day care centre charges $15.50 per hour and you have a 90% subsidy rate. the subsidy is calculated on the $14.63 cap — not the $15.50 actual fee:
subsidy per hour = $14.63 x 90% = $13.17
your gap (on the cap) = $14.63 - $13.17 = $1.46/hr
above-cap difference = $15.50 - $14.63 = $0.87/hr
total out-of-pocket = $1.46 + $0.87 = $2.33/hr
the activity test
the activity test determines how many hours of subsidised care you can access each fortnight. it is based on the recognised activity of both parents (or the lower-activity parent in a couple). recognised activities include paid work, study, training, volunteering, and looking for work.
important: if your combined family income is $83,280 or less, the activity test does not apply. you automatically receive 36 subsidised hours per fortnight (enough for 3 days of care).
| activity hours (per fortnight) | max subsidised hours |
|---|---|
| 8 hours or less | 36 hours |
| 8 – 16 hours | 72 hours |
| 16 – 48 hours | 72 hours |
| more than 48 hours | 100 hours |
both parents in a couple must meet the activity test — the lower activity level determines the household's subsidised hours.
what changed from 2024-25?
the key changes for the 2025-26 financial year are:
- income thresholds indexed upward — all income brackets have been adjusted to reflect CPI increases, meaning some families will receive a slightly higher subsidy than the previous year on the same income.
- hourly rate caps increased — the centre-based day care cap rose to $14.63 (up from $14.16 in 2024-25). family day care and OSHC caps rose to $12.81.
- no annual cap — the annual subsidy cap was permanently removed in july 2023. all families receive unlimited CCS regardless of income (subject to the percentage rate).
- low-income activity test exemption continues — families earning $83,280 or less still receive 36 hours of subsidised care per fortnight regardless of activity.
how to apply for the child care subsidy
applying for CCS is done entirely online through your myGov account. here is what you need to do:
set up your myGov account
if you don't already have one, create a myGov account at my.gov.au and link it to centrelink.
confirm your income estimate
provide an estimate of your family's combined income for the current financial year. this is used to determine your subsidy percentage. update it if your circumstances change — an inaccurate estimate can lead to a debt at tax time.
complete the CCS assessment
in your centrelink online account, go to 'child care subsidy' and complete the assessment. you can also use the express plus centrelink app.
enrol your child at an approved service
give your child's CRN (customer reference number) to your child care centre. they will submit an enrolment which you then confirm in myGov.
subsidy starts
once everything is confirmed, the subsidy is paid directly to your provider and your fees are reduced accordingly.
tip: you can apply for CCS before your child starts care. get your assessment done early so the subsidy kicks in from day one.
who is eligible for CCS?
to receive the child care subsidy, you must:
- be responsible for the care of a child aged 13 or under (or 18 or under with a disability) who is not attending secondary school
- use an approved child care service
- meet residency requirements — the child must be an australian citizen, permanent resident, or hold a special category visa
- be liable to pay for the child care fees
types of approved child care
CCS covers four types of approved child care:
centre-based day care
long day care centres — the most common type of care for under-5s.
family day care
care provided in an educator's home, often with smaller groups.
outside school hours care
before-school, after-school, and vacation care for school-age children.
in home care
care provided in your own home — usually for families in remote areas or with specific needs.
find out exactly what you will get
enter your income, activity level, and care type to see your estimated subsidy, gap fee, and annual out-of-pocket cost.
open the CCS calculatorrelated tools and guides
this guide is for informational purposes only and is based on published 2025-26 CCS rates from services australia. your actual entitlement may vary depending on your specific circumstances. always confirm your subsidy amount with services australia. mini mode is not affiliated with the australian government.