Child Care Subsidy

What is the Child Care Subsidy?

The Child Care Subsidy (CCS) is the Australian Government’s main program that helps families pay for early education and care. Instead of paying the full daily fee charged by a childcare provider, eligible families receive a percentage subsidy that reduces the cost directly at the service. You then pay the gap fee — the remaining amount after CCS has been applied.

The purpose of the Child Care Subsidy is simple: to make early learning more affordable, increase access for families, and support parents to work, study or manage other recognised activities. For many families in Sydney, the CCS plays a crucial role in making long day care, family day care, preschool programs and outside school hours care financially manageable.

Child Care Guide Tip: Child Care Guide offer a complete guide to the Child Care Subsidy.

How the Child Care Subsidy Works

The Child Care Subsidy reduces your childcare fees based on three main factors:

Your family income
The government covers a percentage of your childcare costs. Lower-income families receive a higher subsidy, while higher-income families receive a lower one.
Your activity level
The number of subsidised hours you are entitled to each fortnight is linked to the amount of recognised activity you undertake — such as work, study, volunteering or looking for work.
The type of service and hourly rate cap
Different caps apply to different types of care. Your subsidy is calculated using either the service’s hourly fee or the hourly rate cap (whichever is lower), multiplied by the percentage of subsidy you are entitled to.

Together, these settings determine how much CCS you receive and how many hours per fortnight are subsidised.

Why CCS Matters for Sydney Families

Childcare costs in Sydney are often higher than in many other parts of Australia, especially in areas with strong demand, long waiting lists and higher operational costs. The CCS helps level the playing field so families can access quality early learning without being overwhelmed by fees.

For Sydney families, the Child Care Subsidy can:

make returning to work more financially viable
support more flexible work hours
reduce financial pressure during early childhood years
open access to higher-quality services that might otherwise be out of reach

The goal is not only affordability, but continuity — children benefit most when they attend regularly and build strong relationships with educators. CCS helps make that possible.

Who Can Get the Child Care Subsidy? (Eligibility Overview)

To be eligible for CCS, families must generally meet the following requirements:

You care for a child who is 13 or under and enrolled in an approved childcare service.

You meet the Australian residency and immunisation requirements.

You are responsible for paying the childcare fees.

You meet the income and activity test guidelines.

Approved services include long day care, family day care, outside school hours care and most preschool programs attached to childcare services.

Additional Child Care Subsidy (ACCS)

The Additional Child Care Subsidy (ACCS) provides extra financial support for families facing hardship or special circumstances. It is designed to ensure children at risk, children in foster or kinship care, and families experiencing temporary financial difficulty, domestic violence, or barriers to work can continue accessing early learning. ACCS can cover a much higher percentage of fees than the standard Child Care Subsidy, significantly reducing the cost of care for eligible families.

Child Care Guide Tip: Child Care Guide offer a complete guide to the Additional Child Care Subsidy.

The CCS Activity Test Explained

The activity test determines the number of subsidised hours your family can access each fortnight. Recognised activity includes:

paid work (including self-employment)
study or training
unpaid work in a family business
volunteering
actively looking for work
paid and unpaid parental leave (in most cases)

The more hours of recognised activity you undertake, the more subsidised hours you can receive — up to 100 hours per fortnight.

For families with very young children in Sydney, this often supports a mix of work days and part-time care, especially during transition periods such as returning from parental leave.

How CCS is Calculated (Parent-Friendly Explanation)

Your subsidy percentage is applied to the lower of:

your centre’s hourly fee, or
the government’s hourly rate cap for your type of care.

This means two families paying different daily fees may still receive the same subsidy percentage, but the actual dollar benefit can differ depending on the centre’s fees.

Here’s why: if your Sydney centre charges above the hourly cap, CCS doesn’t cover the fee above that line — the gap becomes an out-of-pocket cost for your family.

Example of CCS in Real Life (Simplified)

If your centre charges the equivalent of $15.50 per hour and the cap is $13.73 per hour, CCS will only apply to $13.73. If you are entitled to a 90% CCS, the government will pay 90% of $13.73, and you pay the rest plus any fee above the cap.

This is why two centres with similar programs can have very different out-of-pocket costs after CCS — especially in Sydney, where daily fees may exceed the cap.

Note: figures are an example for illustration only.

CCS and School Readiness Programs

For children in the year before school, many long day care services run preschool or kindergarten programs delivered by qualified early childhood teachers. CCS can apply to these programs, making them far more affordable than some standalone preschool models.

This gives Sydney families flexibility — especially for those juggling full-time work, long commutes, or inconsistent rosters.

CCS, Attendance and Absences

The Child Care Subsidy is based on bookings and attendance. The system allows for a set number of allowable absences each financial year without affecting your subsidy. Beyond that limit, you may need supporting evidence for additional absences. Consistent attendance also supports children socially and emotionally, making the most of their early learning time.

How to Apply for the Child Care Subsidy

Applying for CCS is done through Centrelink, using your myGov account. The steps usually involve:

providing your family income details
confirming your activity level
nominating your childcare provider
supplying identity and residency documentation

Once your assessment is complete, the subsidy will begin reducing your childcare fees automatically through your chosen service.

Review, Renewal and Keeping Your CCS Accurate

Your Child Care Subsidy entitlement can change if your family income, work hours or personal circumstances change. It’s important to update your details in myGov to avoid overpayments, debt, or subsidy interruptions. Each year, Centrelink also requires you to confirm your income, usually through the tax system.

CCS and the National Quality Standard (NQS)

The CCS and National Quality Standard work together to support quality and access. The NQS sets the benchmark for what high-quality early learning looks like, while the CCS helps families afford that care. This combination aims to give every child — regardless of postcode or income — the chance to experience a safe, engaging and developmentally rich environment.

For families, this means cost and quality don’t need to be competing priorities. You can choose a service based on its philosophy, educators, routines and learning environment, rather than cost alone.

Making the Most of CCS — Practical Tips for Sydney Families

Because childcare fees in Sydney are often above the national average, it is especially important to understand how Child Care Subsidy decisions affect your out-of-pocket cost. Families can maximise their subsidy by:

keeping income and activity details up to date in myGov
comparing daily fees after CCS, not just before it
asking whether the service charges above the hourly cap
planning booking patterns that match your work or study hours
reviewing your entitlements annually or after major changes

It can also be useful to discuss attendance patterns with your service. Sometimes, small adjustments — such as swapping a long day for a shorter session where available — can reduce costs without impacting your child’s learning experience.

What to Ask a Service About CCS

When touring or enrolling, consider asking:

“Do your fees sit above or below the hourly rate cap?”
“How will CCS be shown on my statement?”
“Do you offer different session lengths?”
“How do you handle absences and public holidays?”
“Will you help me understand my gap fee before I enrol?”

Sydney Childcare Tip: A quality service will be transparent, supportive and willing to explain how billing works.

Child Care Subsidy – FAQs

Q: Does the Child Care Subsidy apply to all early learning services?
A: CCS applies to approved childcare services, including long day care, family day care, outside school hours care and many preschool programs delivered through centres.

Q: Does CCS apply during holidays?
A: Yes, if your child is enrolled and booked, CCS may apply — however, normal absence rules and booking policies apply. Check with your provider for details.

Q: Can separated parents share or split CCS?
A: Yes. Centrelink allows eligible parents to receive CCS for their portion of care, depending on arrangements and care percentage.

Q: Do I still get CCS if I reduce my work hours?
A: Possibly. CCS is linked to your recognised activity level, so your subsidised hours may change. Always update your circumstances in myGov.

Q: Can I claim CCS for occasional or casual bookings?
A: Yes, if the service and booking type are CCS-approved. The subsidy will apply to eligible hours you use.

Q: Is CCS paid to me or to the service?
A: CCS is paid directly to your childcare provider, and you pay the remaining gap fee.

Q: What is the Additional Child Care Subsidy?
A: The Additional Child Care Subsidy (ACCS) offers extra financial support for families facing hardship or special circumstances, including children at risk, foster or kinship care arrangements and temporary financial difficulties. ACCS can significantly reduce fees to help ensure children continue accessing early learning when they need it most.

Final Summary

The Child Care Subsidy plays a vital role in helping families access quality early learning at an affordable cost. By understanding how CCS works — and how income, activity and fee structures interact — parents can plan with confidence, reduce financial stress and ensure their child benefits from consistent, high-quality care.

The Child Care Subsidy is more than a financial tool; it supports children’s long-term development by making early learning accessible during the years that matter most. With the right information, Sydney families can make childcare decisions that support work, family life and their child’s wellbeing.