What is the Child Care Subsidy?
The Child Care Subsidy is the main Australian Government payment that helps families with the cost of child care. It began on 2 July 2018, replacing the older Child Care Benefit and Child Care Rebate with a single means-tested payment. The idea was simpler than the system it replaced: one subsidy, one income test, paid to the service so families see the reduction on their bill rather than claiming it back later.
Approved care only
CCS is payable only for care at an approved child care service. Approved services include centre based day care (long day care), family day care, outside school hours care (before school, after school, and vacation care), and in home care. A nanny, babysitter, grandparent, or unapproved service cannot attract CCS, even if the care is real and the cost is high. The service must be approved under Family Assistance Law, and it must report each child's attendance to Services Australia. If you are unsure whether a service is approved, ask the service directly: it will know, because approval is what lets it receive CCS payments.
The four care types
| Care type | What it is | 2026-27 hourly cap |
|---|---|---|
| Centre based day care | Long day care in a centre, usually for children below school age | $15.19 below school age; $13.30 school age |
| Family day care | Care in an educator's home, in small groups | $14.08 |
| Outside school hours care | Before school, after school, and vacation care | $15.19 below school age; $13.30 school age |
| In home care | Care in the child's own home, for families who cannot use other approved care | $41.31 per family per hour |
The cap matters because your percentage is applied to the lower of your provider's hourly fee and the cap. If your centre charges $17 an hour and the cap is $15.19, the subsidy is calculated on $15.19, and you pay the extra $1.81 in full on top of your normal gap. The hourly caps page works through this with examples.
Who runs it?
Two parts of government share the work. Services Australia, through Centrelink, decides claims, sets each family's percentage and hours, pays services, and balances subsidies after the financial year. The Department of Education sets the policy, approves services, and publishes the data reports that show how many families use the system. Your day-to-day contact is usually your service, which reports attendance and charges you the gap, and your myGov Centrelink account, where you claim, update income estimates, and check balances.
The 2023 and 2026 reforms in brief
From July 2023 the Cheaper Child Care changes lifted the maximum standard rate from 85% to 90% and extended the taper, so more middle-income families kept a partial subsidy. From 5 January 2026 the 3 Day Guarantee replaced the old activity test as the baseline: every eligible family now gets at least 72 subsidised hours a fortnight per child, regardless of work or study. Families with enough recognised participation can still reach 100 hours. If you read an older article that says a family with no activity gets nothing, that article is out of date.
Sources: Services Australia, Child Care Subsidy guidance; Department of Education, 3 Day Guarantee guidance; Department of Education, Child Care Subsidy data report, June quarter 2026.