Child Care Subsidy Rates 2026: How Much Will You Get?
Understand the Child Care Subsidy percentages for 2026, income thresholds, activity test requirements, and how to calculate your out-of-pocket childcare costs.
How the Child Care Subsidy Works
The Child Care Subsidy (CCS) is a government payment that reduces the cost of approved childcare for Australian families. It replaced the old Child Care Benefit and Child Care Rebate from July 2018, combining them into a single, simpler payment. CCS is paid directly to your childcare provider, reducing the fees you pay out of pocket. The amount of subsidy you receive depends on three factors: your combined family income, the hours of recognised activity you and your partner undertake (the activity test), and the type of childcare you use. CCS covers a percentage of the actual fee charged by your provider, up to an hourly fee cap set by the government. If your provider charges more than the fee cap, you pay the difference plus your gap fee. The subsidy percentage ranges from 90% for the lowest income families down to 0% for families earning above the upper income threshold. Around 1 million Australian families use the Child Care Subsidy.
CCS Subsidy Percentages by Family Income (2025-26)
The CCS percentage is determined by your combined family income and decreases as income rises. For families earning $80,000 or less, the subsidy is 90% of fees (up to the hourly cap). Between $80,000 and $530,000, the percentage gradually decreases. At $175,000 family income, the subsidy is approximately 62%. At $260,000, it drops to about 42%. At $350,000, approximately 24%. The subsidy reaches 0% at $530,000 in combined family income. Since July 2023, the government removed the annual cap on CCS — previously, families earning over $190,015 were limited to $10,655 per child per year, but this cap has been abolished. The income thresholds are indexed annually on 1 July. The subsidy rate applies to fees up to an hourly cap: $13.73 per hour for centre-based day care, $12.91 for family day care, and $16.53 for outside school hours care. If your centre charges $15 per hour and you are entitled to 85% CCS, the subsidy covers 85% of $13.73 (the cap), not 85% of $15.
The Activity Test for CCS
To receive CCS, you and your partner must meet the activity test by undertaking a minimum number of hours of recognised activity per fortnight. Recognised activities include paid work, self-employment, study or training, looking for work, volunteering, and other approved activities. The hours of activity you undertake determine the maximum hours of subsidised care you can access. If you or your partner do 8 to 16 hours of activity per fortnight, you can receive up to 36 hours of subsidised care. For 17 to 48 hours of activity per fortnight, you get up to 72 hours. For more than 48 hours per fortnight, you can access up to 100 hours of subsidised care. If one parent meets the activity test but the other does not, the lower activity level of the two parents determines the hours of subsidised care. An exemption applies if one parent earns less than $80,000 — in this case, the family can access up to 36 hours of subsidised care per fortnight even if the lower activity parent does no recognised activity.
Types of Approved Childcare
CCS only covers approved childcare services — not all forms of childcare qualify. Centre-based day care (long day care) is the most common type and has an hourly fee cap of $13.73. Family day care, where care is provided in the educator's home, has a cap of $12.91 per hour. Outside school hours care (before school, after school, and vacation care) has a cap of $16.53 per hour. In-home care, where an educator comes to your home, has a cap of $34.13 per hour but is only available in limited circumstances (such as shift workers, families in rural areas, or families with complex needs). Nanny services are generally not covered by CCS unless provided through an approved in-home care organisation. Au pairs, babysitters, grandparents, and informal care arrangements are not covered. To check if your childcare provider is approved for CCS, you can search the government's Starting Blocks website or ask the provider directly. All approved providers must meet national quality standards and be registered with the Department of Education.
Higher CCS for Multiple Children in Care
Families with more than one child aged 5 or under in approved childcare receive a higher subsidy rate for their second and subsequent children. This policy, introduced in July 2023, provides an additional 30 percentage points of CCS for every child after the first who is aged 5 or under and in care. For example, if your standard CCS rate is 60%, your second child aged 5 or under in care would receive 90% CCS (60% plus 30 percentage points, capped at 95%). The higher rate applies automatically — you do not need to apply for it separately. The standard child (eldest in care) receives the normal CCS rate based on your family income. This measure was designed to address the significant financial barrier that prevented many families, particularly mothers, from returning to work when they had multiple young children in care simultaneously. The higher rate applies per child, so a family with three children under 5 would receive the higher rate for two of them.
How to Claim and Manage CCS
To receive CCS, you need to submit an assessment through your myGov account linked to Centrelink. You will need to provide your family's estimated combined income, details of your activity hours, and your children's childcare enrolment details. Your childcare provider will also need to confirm the enrolment from their end. Once your claim is processed, CCS is paid directly to your childcare provider each fortnight, and they pass the reduced fee on to you — you only pay the gap amount. It is important to keep your income estimate updated throughout the year. If your actual income ends up higher than your estimate, you will have to repay the excess subsidy at reconciliation after the financial year ends. Many families use the CCS withholding option, where 5% of the CCS is withheld and paid at reconciliation to create a buffer against potential overpayments. You can adjust your withholding percentage in your Centrelink online account if you want more or less withheld.
CCS Reconciliation at End of Financial Year
Like Family Tax Benefit, CCS is reconciled at the end of each financial year against your actual income. After you and your partner lodge your tax returns (or notify Centrelink that you are not required to lodge), Services Australia compares your actual combined family income against the estimate you provided during the year. If your actual income was lower than estimated, you may receive a top-up. If your income was higher, you may have a debt to repay. The 5% default withholding helps cover small discrepancies, but significant income increases during the year can still result in a substantial debt. To minimise the risk of overpayment, update your income estimate whenever your circumstances change — a pay rise, bonus, new job, or change in investment income should all trigger an update. You can update your estimate at any time through your Centrelink online account. You have until the end of the lodgement year to confirm your income, or CCS for the entire financial year may need to be repaid.
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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
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