The Child Care Subsidy (CCS) is an Australian Government payment that reduces the cost of approved childcare. It is paid directly to your childcare provider as a fee reduction — you pay only the gap. CCS is income-tested and activity-tested, so the amount each family receives depends on their combined income and how much they work, study or train.
CCS is calculated as a percentage of the government hourly cap. Your percentage is determined by your combined family Adjusted Taxable Income (ATI):
Your activity test result determines how many hours of subsidised care you can access per fortnight. From 5 January 2026, the 3-Day Guarantee ensures all eligible families receive at least 72 hours per fortnight regardless of activity. Families who work, study or train for 48 or more combined hours per fortnight can access up to 100 hours.
CCS is calculated on the lower of your provider's hourly fee or the government hourly cap. For centre-based day care the cap is $14.63 per hour. If your provider charges above the cap, the subsidy is still calculated on $14.63 — you pay the full difference above that in addition to your regular gap fee.
CCS is paid during the year based on your income estimate. Centrelink withholds 5% of your entitlement by default. After you lodge your tax return, Services Australia reconciles your payments against your actual Adjusted Taxable Income. If your income was higher than estimated, you may owe a balancing debt. Always update your income estimate on myGov when your circumstances change.
How the Child Care Subsidy works in 2026–27: income thresholds, hourly fee caps, activity test tiers and balancing rules — then estimate your CCS in minutes.
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