New Child Care Subsidy Changes for 2025-2026 Financial Year

Your go to guide for making care more affordable this financial year.

Starting childcare is exciting, but navigating fees and government subsidies can feel overwhelming and confusing. To make your transition to childcare as easy and stress-free as possible, we’ve updated our popular CCS cheat sheet with all the key information that will apply from 7 July 2025 through 30 June 2026.

What is CCS?

The Child Care Subsidy is a payment the Australian Government sends straight to your childcare provider. It reduces your out of pocket fees so quality early education is within reach for every family.

Who can get it?

You or your partner must:

Meet Australian residency requirements
Be liable for childcare fees under a written agreement
Meet the requirements for the CCS activity test or hold an approved exemption.

Your child must:

Attend an approved childcare service in Australia
Be under 13 years and not attending secondary school
Be up to date with immunisations or have an approved exemption.

How much CCS will I receive?

The amount of CCS you are entitled to is based on a few key areas, such as your combined household income and the results of the CCS Activity Test.

Family Income

Services Australia determines a family’s CCS percentage based on their estimated family income.

A family’s CCS subsidy rate is the percentage of the hourly rate that the government will subsidise. It will apply to the hourly fee or the relevant hourly rate cap, whichever is lower.

Family Income	Subsidy Rate
Up to $85,279	90%
More than $85,279 to below $535,279	Between 90% and 0% The percentage decreases by 1% for every $5,000 of income a family earns
$535,279 +	0%

Standard subsidy rates for the first child, 0-5 years of age.

Number of Children in Care

Families with more than one child aged 5 or under in care may receive a higher subsidy for their second child and younger children. Siblings do not need to attend the same service to get a higher subsidy.

The rates for each child are worked out using two separate income tests.

Family Income	Second and Younger Sibling Subsidy Rate
$0 – $143,273	95%
More than $143,273 to below $188,273	Between 95% and 80% The percentage decreases by 1% for every $3,000 of income a family earns
$188,273 to below $267,563	80%
$267,563 to below $357,563	Between 80% and 50% The percentage decreases by 1% for every $3,000 of income a family earns
$357,563 to below $367,563	50%
$367,563 +	Higher CCS rates no longer apply; all children in the family will receive the standard CCS rate

Higher subsidy rates for second and younger siblings

Activity Test

The hours of subsidised care a family can get each fortnight depends on their activity level. The higher the level of activity, the more hours of subsidised care families can get.

Services Australia looks at both parents’ activity levels. They use the parent with the lower activity level to determine a family’s hours of subsidised care.

Families need to do a recognised activity to get CCS. Exemptions apply for parents who cannot meet activity test requirements.

Fortnightly Hours per Activity	Hours Subsidised per Fortnight
Less than 8 hours	0 hours if you earn above $85,279 24 hours if you earn $85,279 or below 36 hours for Aboriginal and/or Torres Strait Islander children, regardless of family activity
More than 8 – 16 hours	36 hours
More than 16 – 48 hours	72 hours
More than Over 48 hours	100 hours

Activity hours according to the Services Australia website for the 2025-2026 financial year

There are certain circumstances that you may meet, where you will be exempt from the activity test, and be eligible for 100 hours of subsidised care per fortnight. These include: if you have a disability or impairment or if you are a grandparent who is the principal carer for your grandchild, and you do not receive income support payments (see our section on Additional Child Care Subsidy if you do). There are many other reasons you may be exempt.

Visit the Services Australia website to find out if you are within the guidelines for an exemption.

What’s changes are coming in 2026?

The Government’s proposed 3 day guarantee would give every CCS eligible child 72 hours (~3 days) per fortnight, and 100 hours for First Nations children, regardless of activity.

Legislation is before parliament, watch this space for a 2026 start date.

Payments, withholding & reconciliation

Your CCS is paid directly to your childcare provider. This means you’ll only ever pay your childcare provider the difference between your subsidy amount and the full fee.

That’s why it’s essential to apply for the Child Care Subsidy well before your child begins care. We recommend submitting your application at least two months in advance to allow time for approval and ensure your subsidy is in place from day one.

While your child can start care before your CCS is approved, please note that you will be responsible for paying full fees during this time. If you’re a new applicant, CCS can only be backdated up to 28 days from the date your application is submitted, and any back payments will be reimbursed to you directly, not to the centre.

The Australian Government will withhold 5% of your CCS entitlement before it is paid to your childcare provider. This is to reduce the likelihood of you incurring a debt by being overpaid your CCS entitlement.

Absences

You can claim CCS for up to 42 paid absence days per child, per financial year (public holidays, sickness, family reasons). Additional absences may be covered in special circumstances and require further evidence. Find out more on absences here.

Additional absence days can be paid by Centrelink, provided the circumstances meet those defined by the Family Assistance Law. Some of these include if the service is closed due to an emergency.

Additional Child Care Subsidy (ACCS)

ACCS tops up CCS for families:

Facing financial hardship
Caring for a grandchild full time
Transitioning to work from income support
Where a child is vulnerable or at risk

Find the full list of circumstances for eligible ACCS here.

New to CCS? Here’s a final checklist for you:

✔ Apply at least two months before the start date
✔ Update MyGov quickly if your income or activity changes
✔ Keep immunisations current and up to date

Need a hand?

Our Imagine Childcare Enrolments Team is here to guide you through the CCS maze. Book a centre tour or call us anytime. Let’s make quality early education affordable for your family in 2025-2026!

Please note, this is only a simplified guide to CCS. For a more detailed overview and more information, head to the Australian Government Services Australia website at https://www.servicesaustralia.gov.au/child-care-subsidy

Find an Imagine Childcare centre near you and book a tour to discover the Imagine difference!

Imagine Childcare and Kindergarten Smithfield and Imagine Childcare and Kindergarten Melton are opening soon. Follow them on Facebook to receive regular updates on their progress.

Source: Services Australia. See their website for full details.

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