Child Care Subsidy Activity Test: Hours Required and Exempt Activities in 2026
How the CCS activity test works — hours of recognised activity required, what counts, exemptions for low income families, and how to maximise your subsidised hours.
How the Activity Test Determines Your Hours
The Child Care Subsidy activity test matches your subsidised child care hours to the amount of recognised activity you and your partner do. There are three activity levels: 8 to 16 hours of activity per fortnight gives you up to 36 hours of subsidised care per fortnight; 16 to 48 hours of activity gives 72 hours; and more than 48 hours of activity gives 100 hours. If you are partnered, the person with the lower activity level determines your CCS hours. For example, if you work 40 hours per fortnight but your partner only does 10 hours of recognised activity, you receive 36 subsidised hours (based on your partner's 8-16 hour bracket). Any child care used beyond your subsidised hours is charged at the full fee with no CCS discount. The activity test applies per family, not per child — the same subsidised hours apply across all children in care.
What Counts as a Recognised Activity
Recognised activities for the CCS activity test include: paid employment (including self-employment), study or training at an approved institution, unpaid work in a family business, looking for work (up to 6 months for job seekers on an employment services program), volunteering for an approved organisation, and any combination of these. Commuting time to and from work or study counts toward your activity hours. If you work from home, your contracted or usual hours count. For self-employed people, your total hours working in and on your business count, including administration, marketing, and service delivery. If you are on unpaid leave (such as parental leave), you are considered to be doing zero hours of activity unless you have other recognised activities. Setting up a new business counts as a recognised activity — keep a log of hours spent as evidence.
Low Income Family Exemption
Families earning $83,280 or less per year qualify for 36 subsidised hours per fortnight regardless of their activity level — even if neither parent works or studies. This is the low income family exemption and it ensures that children from disadvantaged backgrounds can access at least 3 days per week of early education. At this income level, you also receive the maximum CCS percentage of 90%, meaning the government covers 90% of the child care fee up to the hourly rate cap ($15.04 per hour for centre-based day care, $13.73 for family day care). For a family using 36 hours per fortnight at $15.04 per hour, CCS covers $15.04 times 0.90 times 36 equals $487.30 per fortnight, and the family pays just $54.14 per fortnight in gap fees. This exemption applies automatically — you do not need to apply for it separately.
Temporary Activity Test Exemptions
Centrelink can grant temporary exemptions from the activity test for up to 13 weeks in certain circumstances. If you are on a Centrelink payment and transitioning to work, you can get 36 hours of subsidised care for up to 13 weeks while you search for a job. If you are ill, injured, or caring for an ill family member, an exemption allows you to maintain your existing CCS hours. Parents experiencing family and domestic violence can receive up to 100 hours of subsidised care per fortnight for up to 26 weeks, regardless of activity. If you are setting up a new business, you may qualify for 36 hours while you establish your enterprise. To apply for an exemption, contact Centrelink or update your details through myGov — you will need supporting evidence such as a medical certificate, police report, or business registration. Exemptions can be extended if your circumstances have not changed.
Additional Child Care Subsidy (ACCS)
The Additional Child Care Subsidy provides extra financial support beyond standard CCS for families facing genuine hardship. ACCS has four categories: Child Wellbeing (for children at risk of abuse or neglect — provides 100% subsidy for up to 100 hours per fortnight, usually arranged through a state child protection agency); Grandparent (provides 100% subsidy for grandparents on income support who are the primary carer); Temporary Financial Hardship (provides an additional 30 percentage points on top of your CCS rate for up to 13 weeks if you experience a sudden drop in income); and Transition to Work (provides 95% subsidy for up to 36 hours per fortnight for parents moving from income support into work or study). ACCS Temporary Financial Hardship is particularly useful if you lose your job — it boosts your CCS rate and can be claimed through myGov with evidence of your changed circumstances.
Calculating Your Out-of-Pocket Costs
Your actual child care costs depend on three factors: your CCS percentage (based on family income), your subsidised hours (based on activity test), and the hourly rate cap. For a family earning $120,000 per year, CCS covers approximately 77% of fees. If the centre charges $140 per day (roughly $14 per hour for a 10-hour day), the subsidy covers $14 times 0.77 equals $10.78 per hour, leaving a gap of $3.22 per hour or $32.20 per day. For a family using 5 days per week (50 hours per fortnight), the fortnightly cost would be $161.00. If your centre charges above the hourly rate cap of $15.04, you pay the difference plus your gap fee. The annual CCS cap of $10,655 per child applies to families earning over $356,756 — below this income, there is no annual cap and CCS is paid year-round without limit. Always use the Centrelink CCS estimator to check your exact entitlement before committing to a centre.
Tips for Maximising Your CCS
Several strategies can help you maximise your Child Care Subsidy. If your partner is not working, even 8 hours of volunteering per fortnight qualifies as a recognised activity, moving you from zero subsidised hours to 36 hours. Enrolling in a short course or TAFE qualification counts as study activity. Salary sacrificing into superannuation or novated leasing reduces your adjusted taxable income, which may push you into a higher CCS percentage bracket — the breakpoints are $83,280 (90%), $173,163 (85% tapering down), and $356,756 (50%). If you are separated or divorced, your CCS is based on your individual income (unless you have a new partner), which often results in a higher subsidy rate than when you were together. Report any changes in activity or income within 28 days to avoid overpayments that Centrelink will recover through your tax return.
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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
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