Child Care Subsidy (CCS) is an Australian Government payment designed to help eligible families manage the cost of approved child care. Instead of paying the full childcare fee, eligible families can have CCS paid directly to their approved childcare provider, reducing the amount they need to pay themselves.
For parents considering an early learning centre understanding how CCS works can make it easier to plan childcare costs and compare different services.
How Does Child Care Subsidy Work?
The amount of CCS a family receives depends on several factors, including:
- Family income
- The number of children aged 5 or under in care
- The type of approved child care being used
- The hourly fee charged by the provider
- The applicable CCS hourly rate cap
- The number of subsidised hours the family is entitled to
The CCS percentage is applied to the lower of the childcare service’s hourly fee or the relevant government hourly rate cap. Families generally still pay a gap fee, which is the remaining amount after CCS has been applied.
This means that two families attending the same childcare centre may have different out-of-pocket childcare costs depending on their individual circumstances.
New CCS Changes and Limitations in 2026
One of the biggest recent changes to CCS happened on 5 January 2026, when the previous CCS activity test was replaced by the 3 Day Guarantee.
Under the current system:
- All CCS-eligible families can receive at least 72 hours of subsidised child care per fortnight.
- This is equivalent to at least 3 days of subsidised care per week.
- Families may receive 100 hours per fortnight in certain circumstances.
- Aboriginal and Torres Strait Islander children can receive 100 hours of subsidised care per fortnight.
- The 3 Day Guarantee provides subsidised hours but does not guarantee a childcare place.
- Families still need to meet CCS eligibility requirements and pay any applicable gap fee.
Families may be entitled to 100 hours per fortnight where, for example:
- Both members of a couple have more than 48 hours of recognised participation per fortnight.
- The family has a valid exemption.
- The child is Aboriginal and/or Torres Strait Islander.
- Other specific circumstances apply under the CCS rules.
The change means parents no longer need to rely on the old activity-test structure simply to receive the minimum level of subsidised care.
New CCS Income Threshold Limits for 2026–27
The CCS percentage is also linked to family income. The income thresholds were increased from 6 July 2026 for the 2026–27 financial year.
Standard CCS income thresholds
| Family Income (Annual) | Standard CCS Rate |
| Up to $88,520 | 90% |
| More than $88,520 and less than $538,520 | Between 90% and 0% |
| $538,520 or more | 0% |
For families between $88,520 and $538,520, the subsidy percentage gradually decreases by 1 percentage point for every $5,000 of additional family income.
Importantly, reaching $538,520 or more does not prevent a family from submitting a CCS claim. However, the standard CCS rate is 0% at that income level.
Higher CCS rate for second and younger children
Families with more than one child aged 5 or under in child care may receive a higher CCS rate for their second and younger eligible children.
For 2026–27, the higher-rate thresholds are:
- 0–146,437: 95% CCS
- More than $146,437 to below $191,437: rate decreases from 95% to 80%
- $191,437 to below $270,727: 80%
- $270,727 to below $360,727: rate decreases from 80% to 50%
- $360,727 to below $370,727: 50%
- $370,727 or more: the higher rate no longer applies and the standard CCS rate applies to all eligible children.
These figures are particularly relevant for families with two or more young children attending childcare at the same time.
Who Is Eligible for Child Care Subsidy?
To receive CCS, families need to meet specific requirements.
Generally, the parent or their partner must:
- Care for the child at least 2 nights per fortnight or have at least a 14% share of care.
- Be responsible for paying the childcare fees.
- Use an approved childcare service.
- Meet the relevant Australian residence requirements.
The child generally must:
- Meet the Australian Government’s immunisation requirements.
- Be 13 or younger and not attending secondary school, unless an applicable exception applies.
There are some circumstances where CCS can apply to older children, including certain situations involving disability or a need for supervision.
The type of childcare service also matters. CCS can apply to approved services such as centre-based day care, long day care, family day care and outside school hours care.
How to Apply for Child Care Subsidy
Parents can apply for CCS through myGov and Centrelink.
The general process is:
1. Create or access your myGov account
Sign in to myGov and make sure your Centrelink online account is linked.
2. Start your claim
Select:
- Make a claim or view claim status
- Make a claim
- Under Families, select Get started
- Choose the option to apply for Family Assistance Payments and follow the instructions.
3. Provide your information
You may need to provide information about:
- Your family circumstances
- Your children
- Your expected family income
- Your childcare arrangements
- Your residence and other eligibility details
Services Australia may also request supporting documents.
4. Your childcare provider submits enrolment details
After you enrol your child with an approved childcare service, the provider submits the relevant enrolment information.
You may need to review and confirm your child’s enrolment details through your Centrelink account before CCS can be paid.
5. Keep your information updated
It is important to keep your family income estimate and other relevant details up to date. CCS is balanced against your actual family income, so incorrect information can affect the final amount you receive.
How CCS Can Help With Childcare Costs
For families using an early learning centre in Narre Warren South, CCS can make childcare expenses easier to understand and plan.
Before choosing a centre, parents can compare:
- Daily childcare fees
- CCS eligibility
- Estimated subsidy percentage
- Available subsidised hours
- Gap fees
- Kindergarten programs
- Long day care options
- Learning programs and facilities
- Opening hours
- Family communication and support
It is also useful to remember that CCS is calculated based on individual family circumstances. A childcare centre can provide information about its fees and enrolment process, while Services Australia determines a family’s CCS entitlement.
Conclusion
Child Care Subsidy is an important form of financial assistance for eligible Australian families using approved childcare services. The amount a family receives depends mainly on family income, the number of eligible children in care, the type of childcare and the applicable hourly rate cap.
The 2026 CCS changes are particularly important for parents to understand. Since 5 January 2026, the 3 Day Guarantee means CCS-eligible families can receive at least 72 hours of subsidised care per fortnight, with 100 hours available in certain circumstances.
For the 2026–27 financial year, the standard CCS income threshold begins at $88,520 for the maximum 90% rate and phases down to 0% at $538,520 or more.
Families looking for childcare can use this information as a starting point when planning their childcare budget and researching an appropriate early learning service.
Frequently Asked Questions About CCS
1. What is CCS in Australia?
CCS stands for Child Care Subsidy. It is government assistance that helps eligible families reduce the cost of approved childcare.
2. What is the new CCS limit in 2026?
From 5 January 2026, CCS-eligible families can receive at least 72 hours of subsidised care per fortnight. Some families can receive 100 hours.
3. What is the CCS income threshold for 2026–27?
Families with income up to $88,520 can receive the maximum standard CCS rate of 90%. The standard rate gradually reduces above this amount and reaches 0% at $538,520 or more.
4. Can families with two children receive a higher CCS rate?
Yes. Families with more than one child aged 5 or under in care may receive a higher rate for their second and younger eligible children, subject to the applicable income thresholds.
5. Does CCS pay the entire childcare fee?
Not necessarily. CCS reduces the eligible portion of childcare fees, and families generally need to pay the remaining gap fee.
