🇦🇺 Australian explainer
How the Child Care Subsidy (CCS) Works
A plain-English guide to the CCS — who's eligible, how it's calculated, the activity test, and how to make sure you're getting your full entitlement.
🏫 Explainer·6 min read·Updated March 2026
Return to Work Calculator
See your net childcare cost after CCS →
CCS subsidy rates by income (2025–26)
| Combined family income | CCS subsidy rate |
|---|---|
| $0 – $83,280 | 90% |
| $83,280 – $533,280 | 90% reducing by 1% per $3,000 over $83,280 |
| Above $533,280 | 0% |
The subsidy applies to the hourly rate cap, not necessarily what your centre charges. If the centre charges above the cap, you pay the full gap above the cap amount.
The activity test — how many hours you can claim
| Activity hours (per fortnight) | Subsidised hours available |
|---|---|
| 0 hours (no activity) | 24 hours (safety net) |
| 8–16 hours | 36 hours |
| 16–48 hours | 72 hours |
| 48+ hours | 100 hours |
Recognised activities include: paid work, self-employment, approved study or training, active job search, volunteering, and some unpaid work in a family business.
The activity test uses the lower-earning parent's activity hours as the limit. If one parent does 48+ hours of activity and the other does 16 hours, the limit is 72 hours — not 100.
How to apply and what to keep updated
→
Apply via myGov
Link your myGov account to Centrelink. Apply for CCS before your child starts care — it can't be backdated more than 28 days.
→
Provide income estimate
Enter your estimated combined family income for the financial year. Update this whenever your income changes significantly.
→
Activity details
Record your work/study hours. These determine your subsidised hours entitlement.
→
Confirm each fortnight
Services Australia sends a confirmation each fortnight. Review it to ensure hours and income are correct.
→
Tax time reconciliation
Lodge your tax return. ATO confirms your income to Services Australia, who reconcile your CCS for the year.
Frequently asked questions
Who is eligible for the Child Care Subsidy?
To receive CCS you must: have a child aged under 13 who is not attending secondary school; use an approved childcare service; meet the residency requirements (Australian citizen, permanent resident, or certain visa holders); and meet the activity test (minimum hours of work, study, training, or other recognised activities per fortnight). Income must be under $530,000 combined family income.
What is the activity test for CCS?
The activity test determines how many subsidised hours you can access per fortnight. If each parent does 8+ hours of activity per fortnight, you can claim up to 36 subsidised hours. At 16+ hours, up to 72 hours. At 48+ hours, up to 100 hours. If one parent does no activity, you're limited to 24 hours unless you qualify for an exemption (e.g. disability, single parent).
When does CCS phase out?
From July 2023, families earning under $83,280 receive a 90% subsidy (up from 85%). The subsidy tapers as income rises. At $83,280–$533,280, the subsidy starts at 90% and reduces by 1% for every $3,000 of income above $83,280. Above $533,280, no CCS is payable. These thresholds are indexed annually.
How is CCS paid?
CCS is paid directly to your childcare provider, who reduces your fee by the subsidy amount. You pay the gap (the difference between the full fee and the subsidy). You never receive CCS as a cash payment — it goes directly to the provider. Your annual CCS entitlement is reconciled at tax time based on actual income.
What happens at tax time with CCS?
Services Australia calculates your subsidy based on estimated income during the year. At tax time, once your actual income is confirmed with the ATO, CCS is reconciled. If you underestimated income, you may owe money back. If you overestimated, you may receive a top-up. This is why it's important to update your income estimate in myGov whenever it changes significantly.