Child Care Subsidy (CCS)
What is the Child Care Subsidy?
The Australian Government is committed to ensuring that Australian families are able to access affordable, flexible and high quality child care. The Government provides a number of subsidies and programs to help with the cost of child care, with the Child Care Subsidy being the main type of assistance that most families will use.
What are the eligibility requirements?
To be eligible for the Child Care Subsidy the following requirements must be met:
- the child must
- be a ‘Family Tax Benefit child’ or ‘regular care child’ and
- be 13 or under and not attending secondary school and
- meet immunisation requirements
- the person claiming the Child Care Subsidy, or their partner, must
- meet residency requirements and
- meet the Child Care Subsidy activity test (or be eligible for an exemption) and
- be liable to pay for care provided under a Complying Written Arrangement (their written agreement) with their child care provider
- child care must be provided by an approved provider in Australia and not be part of a compulsory education program, for example school.
There are exemptions for individuals who genuinely cannot meet some eligibility requirements.
How much can a family receive?
The level of subsidy a family receives will depend on three factors:
- Income – a family’s (both partners) combined income
- Activity test – what activities the individual and their partner undertake or exemptions that might apply and
- Service type – the type of approved child care service used, for example Centre Based Day Care.
Combined Family Income
The table below outlines combined family income and relevant rate of Child Care Subsidy to which families will be entitled.
| Your family income | Child Care Subsidy percentage |
|---|---|
| $0 to $70,015 | 85% |
| More than $70,015 to below $175,015 | Between 85% and 50% The percentage goes down by 1% for every $3,000 of income your family earns |
| $175,015 to below $254,305 | 50% |
| $254,305 to below $344,305 | Between 50% and 20% The percentage goes down by 1% for every $3,000 of income your family earns |
| $344,305 to below $354,305 | 20% |
| $354,305 or more | 0% |
The amount of subsidy a family receives will be their Child Care Subsidy percentage of the hourly fee charged or the applicable hourly rate cap, whichever is lower (see hourly caps under Service type below).
Families can use the Department of Human Services Payment and Service Finder (humanservices.gov.au/paymentfinder) to estimate how much Child Care Subsidy they may be entitled to by entering their details.
Activity test
The number of hours of subsidised child care to which a family will be entitled will depend on how much time parents spend undertaking recognised activities, for example work, training, volunteering or study.
The Child Care Subsidy activity test takes into account both parents’ (if applicable) activities, however, the maximum hours a family will receive will be based on the person with the lowest level of activity. A broad range of activities will meet the activity test requirements.
For people with irregular work hours, such as casual employment, an estimate can be used based on the highest number of hours they expect to work in any one fortnight over a three-month period.
There is a three-step activity test to calculate how many hours to which a family will be entitled.
| Activity level each fortnight | Hours of subsidised care each fortnight | Maximum number of hours of subsidy (per fortnight) |
|---|---|---|
| Less than 8 hours | 0 hours if you earn above $70,015 24 hours if you earn $70,015 or below | 36 hours |
| More than 8 to 16 hours | 36 hours | 72 hours |
| More than 16 to 48 hours | 72 hours | 100 hours |
| More than 48 hours | 100 hours |
Service type
There is an hourly rate cap for each hour of child care provided which differs depending on the type of approved child care service used.
Where a child care provider charges less than the hourly rate cap, a family’s subsidy will be their Child Care Subsidy percentage of the actual fee charged.
If a child care provider charges more than the hourly rate cap, a family’s subsidy will be their Child Care Subsidy percentage of the relevant hourly rate cap.
Table: Hourly rate caps by care type
| Type of child care | Hourly rate cap | Hourly rate cap (school aged children) |
|---|---|---|
| Centre Based Day Care – long day care and occasional care | $12.31 | $10.48 |
| Family Day Care | $11.40 | $10.48 |
| Outside School Hours Care – before, after and vacation care | $10.77 | $11.10 |
| In Home Care | $33.47 per family | $32.58 per family |
These hourly rate caps are correct for 2019-20 and will be subject to adjustment through indexation in subsequent years.
Is there an annual cap?
There’s no annual cap on your subsidy if your family income estimate was $189,390 or less.
If your estimate was more than $189,390 and under $353,680, your annual cap is $10,560. This cap applies to each child in care for each financial year.
How will the Child Care Subsidy be paid?
Child Care Subsidy will be paid directly to child care providers to pass on to families as a fee reduction so that their fees are reduced at the time they use child care. Families will pay their provider the difference between their subsidy and the fees charged. Families will not be able to elect to receive their subsidy as a lump sum at the end of the financial year. Families will need to make a claim for Child Care Subsidy when (or before) each child starts attending care.
Any Child Care Subsidy owed to families following the end of year reconciliation process will be paid directly to families as a lump sum. If a family has been overpaid Child Care Subsidy during the year the family may have to repay some Child Care Subsidy (a debt).
When does a family stop receiving Child Care Subsidy?
If a family earns $354,305 (in 2020-21) or more per year, they will not be entitled to any Child Care Subsidy. However, high income families who are not certain of their combined family income for the year ahead, are encouraged to make a claim for Child Care Subsidy. This maintains their eligibility for Child Care Subsidy throughout the year and will ensure they receive entitlement if their actual income at the end of the financial year ends up being below $354,305.
What is the Child Care Subsidy withholding?
Child Care Subsidy withholding is designed to help families avoid or minimise debts at reconciliation, which could occur due to changes in circumstances throughout the year (for example, changes to family incomes or activities).
Parents can request their percentage of withholding be adjusted up or down through Centrelink. However, withholding is important as it helps protect families from possible debts. After reconciliation any outstanding subsidy is returned to the family.
Five per cent of all families’ Child Care Subsidy will be withheld by the Government, however, withholding will not apply to Additional Child Care Subsidy payments.
What is the Additional Child Care Subsidy?
The Additional Child Care Subsidy is a top up payment in addition to the Child Care Subsidy which will provide targeted additional fee assistance to families and children who need extra support.
The Additional Child Care Subsidy has four elements:
- child wellbeing
- grandparents
- temporary financial hardship
- transition to work
Where can I get further information on the child care package?
- Visit the Department of Education and Training Child Care Package website at gov.au/eccc
- Visit the Department of Human Services Child Care Subsidy website humanservices.gov.au/childcaresubsidy
