Child Care Subsidy is determined by three factors. First, your combined family Adjusted Taxable Income sets your subsidy percentage — up to 90% for families earning $85,279 or less, tapering to 0% at $535,279. Second, your activity test result sets your fortnightly hours entitlement — either 72 or 100 hours. Third, the government hourly cap ($14.63 for centre-based day care in 2025–26) limits the fee the subsidy is calculated on.
From 5 January 2026, all eligible families receive at least 72 hours of subsidised care per fortnight regardless of their activity test result. Before this change, families with low activity could receive as few as 24 hours. Families who work, study, or train for 48 or more combined hours per fortnight can still access the full 100 hours.
72 hours per fortnight is the minimum guaranteed under the 3-Day Guarantee — equivalent to three standard childcare days. 100 hours per fortnight is the maximum, available to families who meet the higher activity test threshold of 48 or more combined hours of work, study, training, or approved activities. The activity test looks at each parent's activity separately; the lower-activity parent's hours determine the entitlement band.
CCS is paid during the year based on your estimated income. After you lodge your tax return, Services Australia compares the estimate with your actual Adjusted Taxable Income. If your income was higher than estimated, you may have received more subsidy than you were entitled to — creating a balancing debt. This can happen after a bonus, salary rise, or if you underestimated investment income. Centrelink withholds 5% of your CCS by default to reduce this risk.
Government Paid Parental Leave is taxable income and is included in ATI. If it pushes your combined family ATI above a CCS taper threshold, your subsidy percentage may reduce for the financial year. While on leave, the 3-day guarantee (72 hours per fortnight) protects your access to subsidised care even if you are not meeting the activity test.
Yes. Salary packaging reduces your taxable income but generates a Reportable Fringe Benefits Amount (RFBA) that is included in ATI. For Section 57A exempt employers (hospitals, PBIs, charities), the RFBA is adjusted to 53% for CCS purposes. For standard employers, the full RFBA is added to ATI. Many families are surprised that packaging can reduce their CCS even as their take-home pay increases.
Answers to the most common Child Care Subsidy questions — how your CCS percentage is calculated, what the 3-Day Guarantee means for 2026, the difference between 72 and 100 hours, balancing debts, and how income changes affect your subsidy.
Free. No login. Takes about 2 minutes.