Question 1

How is the Child Care Subsidy (CCS) calculated?

Accepted Answer

The CCS is calculated based on three factors: your combined family income (determines the subsidy percentage from 0% to 90%), the type of childcare (determines the hourly rate cap), and the activity test (determines the maximum subsidised hours per fortnight). The subsidy is applied to the lower of the actual fee or the hourly cap.

Question 2

What are the CCS income thresholds for 2025-26?

Accepted Answer

Families earning up to $85,279 receive the maximum 90% subsidy. The rate decreases by 1% for every $5,000 of income above this threshold. Families earning above $535,280 receive no subsidy. These thresholds are indexed each year.

Question 3

What is the hourly rate cap?

Accepted Answer

The government sets maximum hourly rates it will subsidise. For 2025-26, centre-based day care and OSHC are capped at $14.63/hour, and family day care at $13.56/hour. If your provider charges more than the cap, you pay the difference in full plus your gap fee.

Question 4

What is the activity test?

Accepted Answer

The activity test determines how many hours of subsidised care you can access per fortnight. Activities include paid work, study, training, volunteering, or looking for work. From January 2026, all families receive a minimum 72 subsidised hours per fortnight (equivalent to 3 days per week) regardless of activity, known as the 3-day guarantee.

Question 5

How is the CCS paid?

Accepted Answer

The CCS is paid directly to your childcare provider, reducing the amount you need to pay. You pay the gap fee — the difference between the total fee and the subsidy. At the end of the financial year, your subsidy is reconciled based on your actual family income from your tax return.

Question 6

Do I need to be working to get the CCS?

Accepted Answer

From January 2026, all families with children aged 0-5 in approved care receive a minimum 72 hours per fortnight (3-day guarantee), regardless of their activity level. For additional hours beyond 72, at least one parent needs to meet the activity test. Families with school-age children (6-13) still need to meet the activity test for all subsidised hours.

Period	Subsidy	After Withholding	Out of Pocket	Total Cost
Weekly	$395	$375	$125	$500
Fortnightly	$790	$751	$249	$1,000
Annual	$20,541	$19,513	$6,487	$26,000

Childcare Subsidy Calculator

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