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Short answer
The Child Care Subsidy (CCS) is the Australian Government's main help with childcare fees. If your child goes to an approved service, the government pays a percentage of your fees straight to the provider. For 2026–27, families earning up to $88,520 get the maximum 90%, and the rate drops by 1% for every $5,000 above that until it reaches zero at $538,520. Since 5 January 2026 the old activity test is gone: every eligible family gets at least 72 subsidised hours a fortnight, and 100 hours if both parents do more than 48 hours of work, study or other recognised activity.
Key facts
| Fact | Detail (FY2026–27) |
|---|---|
| Maximum CCS rate | 90% for combined family income up to $88,520 (Services Australia) |
| Taper | Down 1% for every $5,000 of income above $88,520; 0% from $538,520 |
| Higher rate for younger siblings | Up to 95% for second and younger children aged 5 or under, for family income under $370,727 |
| Hourly rate cap — long day care, below school age | $15.19 an hour (Services Australia) |
| Hourly rate cap — OSHC / school age | $13.30 an hour (family day care $14.08) |
| Subsidised hours per child | At least 72 hours a fortnight from 5 January 2026; 100 hours if both parents do more than 48 hours of recognised activity a fortnight |
| Withholding | 5% of your CCS is held back each fortnight until your income is checked after tax time |
How the CCS percentage works
The CCS covers a percentage of your hourly fee or the government's hourly rate cap — whichever is lower. If your centre charges more than the cap, you pay 100% of the gap yourself.
Your percentage depends on your combined family income for the financial year (your estimate during the year, then your actual adjusted taxable income once you've both lodged). The official table is on Services Australia's how much CCS you can get page. Here's roughly where common incomes land in 2026–27:
| Combined family income | Approximate CCS percentage |
|---|---|
| Up to $88,520 | 90% |
| $100,000 | about 87% |
| $150,000 | about 77% |
| $200,000 | about 67% |
| $300,000 | about 47% |
| $400,000 | about 27% |
| $538,520 or more | 0% |
The taper is gradual — there's no cliff where one extra dollar costs you thousands.
Two or more little ones?
If you have more than one child aged 5 or under in care, the younger child (or children) can get a higher rate — up to 95% — as long as family income is under $370,727. Services Australia applies this automatically; you don't need to claim it separately. It's one of the most valuable and least understood parts of the system.
Real example: the Williams family
Sarah and Tom have a combined income of $140,000 and a two-year-old in long day care four days a week. Both work full-time.
- Their CCS percentage is about 79% (90% minus roughly 1% for each $5,000 above $88,520)
- The centre charges $140 for a 10-hour day — $14 an hour, under the $15.19 cap, so the subsidy applies to the full fee
- Four days a week is 80 hours a fortnight; because both parents do more than 48 hours of work, they can get up to 100 subsidised hours, so every hour is covered
- Yearly fees: $28,000 (200 days). CCS pays about $22,100
- Out-of-pocket: about $5,900 a year (roughly $118 a week) — a little more during the year while 5% is withheld, with the balance paid back after tax time
Without the CCS they'd pay the full $28,000.
How many hours are subsidised (the 72-hour rule)
Your CCS percentage sets how much of each hour is covered. The number of subsidised hours sets how many hours that applies to.
From 5 January 2026 the old activity test (where families doing little or no paid work could get 0–36 hours) was replaced. Now (see Services Australia's recognised participation and activity test page):
| Your situation (each parent, per fortnight) | Subsidised hours per child, per fortnight |
|---|---|
| 48 hours or less of recognised activity | 72 hours |
| More than 48 hours of recognised activity (both parents, if partnered) | 100 hours |
| Valid exemption, or an Aboriginal or Torres Strait Islander child | 100 hours |
Recognised activity includes paid work, self-employment, study, volunteering and looking for work (volunteering or job-seeking alone count for up to 16 hours). If you have a partner, Services Australia uses the lower of your two activity levels.
What this means in practice: 72 hours a fortnight is enough for three 12-hour days a week — the "3 Day Guarantee". If you need four or five long days, both parents need more than 48 hours of activity a fortnight, or you pay full fee for hours above 72.
What changed for 2026–27
- The 3 Day Guarantee started on 5 January 2026. Families who previously got 0 or 36 hours because of low work hours now get at least 72.
- Higher income thresholds and caps from July 2026. The 90% threshold rose to $88,520 and the long day care cap to $15.19 an hour. If your centre lifted its fees, check whether it's now above the cap — any gap above the cap is 100% on you.
- The Additional Child Care Subsidy (ACCS) is still there for vulnerable families. If you're in financial hardship, moving off income support, or caring for a child at risk, you may qualify for a higher subsidy regardless of the standard income test. Ask your provider or Centrelink.
How to apply
- Link myGov to Centrelink. If you haven't done this yet, do it first — identity checks can take a few days.
- Get your child enrolled at a CCS-approved service. Your provider has to confirm the enrolment in the system before Centrelink can process anything.
- Submit a CCS claim through myGov. Go to Centrelink → Families → Child Care Subsidy. You'll need income estimates for yourself and your partner, plus your activity details.
- Keep your income estimate accurate. Underestimate and you may get a debt after tax time. Overestimate and you'll get less CCS during the year (the difference is paid back once you lodge your tax return).
Apply before your child starts care — CCS generally isn't backdated beyond a short window.
One thing most parents get wrong
Your CCS is worked out on adjusted taxable income, not your gross salary — and that cuts both ways. Ordinary work-related deductions lower your taxable income, but Services Australia adds back several things, including reportable super contributions (so salary sacrificing into super doesn't lower your CCS income), net investment losses from a negatively geared property, reportable fringe benefits and foreign income. The full list is on Services Australia's what adjusted taxable income is page.
So if you're estimating your income for CCS, start from your taxable income and add those items back. Families who forget the add-backs are the ones who get a surprise debt after tax time.
The bottom line
The CCS can cut your childcare costs dramatically — but it works on a "you claim, they pay" basis. The key things to get right:
- Get your family income estimate as accurate as you can, including the add-backs
- Make sure your partner's details are linked (if applicable)
- If you need more than 72 hours a fortnight, check that both parents' activity is above 48 hours
- Apply before your child starts — don't wait until the first invoice arrives
For most families with young children, the CCS is the single biggest government payment they receive. Pair it with Family Tax Benefit and you've covered the two big ones — and for the full picture see what it really costs to raise a child in Australia and our raising a family in Australia money guide.
FAQ
Frequently asked questions
How much Child Care Subsidy can I get?
It depends on your combined family income. In 2026–27, families earning up to $88,520 get the maximum 90%. The rate drops by 1% for every $5,000 above that and reaches 0% at $538,520. Younger siblings aged 5 or under can get up to 95% if family income is under $370,727.
How many hours of subsidised care can I access?
Since 5 January 2026, every eligible family gets at least 72 hours of subsidised care per child each fortnight, regardless of work hours. You get 100 hours if both parents do more than 48 hours of recognised activity (work, study, volunteering) a fortnight, or if you have a valid exemption.
Does the CCS cover outside-school-hours care?
Yes. Outside School Hours Care (OSHC), vacation care, and before/after school care are all covered by the CCS, as long as the provider is CCS-approved.