In 2025-26, your Child Care Subsidy is 90% of your fee (or the Government's hourly cap, whichever is lower) if your family income is $85,279 or less. From there, the percentage drops 1% for every $5,000 your combined income rises above $85,279, hitting 0% at $535,279. And since 5 January 2026, every CCS-eligible family is guaranteed at least 72 hours of subsidised care per fortnight under the new 3 Day Guarantee — replacing the old activity test entirely. To reach the 100-hour tier instead, every adult in your family needs more than 48 hours of recognised participation per fortnight (paid work, study, etc.) — the lower partner sets the cap.
That's the headline. The detail — including how the hourly cap can quietly cap your subsidy below 90%, and what the 3 Day Guarantee changed — is below. Every figure here is the one our calculator uses, locked in lib/rates.ts and verified against Services Australia.
Who can claim CCS
You qualify for CCS if all of the following are true:
- Your child is 13 or younger and not yet at secondary school (some exceptions for children with additional needs).
- They're in approved care — long day care, family day care, outside school hours care (OSHC), or approved in-home care. A grandparent, friend or informal babysitter doesn't count.
- You're an Australian resident with a residency status Centrelink recognises.
- Your child's immunisations are up to date (or have an approved exemption).
- Your family income estimate is below $535,279.
The misconception we see most often: "We earn too much for any subsidy." Up to $535,278 of combined income, you get something — even high-income families with two young kids in care often see meaningful CCS through the higher rate for second-and-later children under 5.
The income test — exact figures for 2025-26
This is the percentage Centrelink calls your applicable percentage:
| Combined family income (estimated for the year) | Subsidy percentage |
|---|---|
| $85,279 or less | 90% (maximum) |
| $85,280 – $535,278 | Reduces by 1% for every $5,000 over $85,279 |
| $535,279 or more | 0% (no subsidy) |
A worked example. A family with combined income of $135,279 sits $50,000 above the base threshold. $50,000 ÷ $5,000 = 10 steps of 1%. Their applicable percentage is 90% − 10% = 80%.
The subsidy is then applied to either your actual hourly fee or the Government's hourly cap for that care type — whichever is lower. If your daily fee works out above the cap, you pay full freight for the difference. CCS only covers up to the capped amount.
Try the free CCS calculator → · Open the full dashboard view → Both run the income test, hourly-cap check and the 3 Day Guarantee. The full dashboard uses your saved profile and links to FTB-A + EOFY reconciliation.
Higher CCS for second and subsequent children under 5
Families with more than one child aged 5 or under in care get a higher subsidy on the second and later children — capped at 95%. The higher-rate tapers are different from the standard tapers (they apply between $143,273 and $367,563). NestWise's calculator picks the right tier automatically when you tell it you have multiple under-5s in care; the formal rules are in DSS Family Assistance Guide §1.2.6.
Hourly fee caps for 2025-26
CCS pays the lower of your hourly fee or these caps (effective 7 July 2025):
| Type of care | Children below school age | School age |
|---|---|---|
| Centre-based day care | $14.63/hr | $12.81/hr |
| Family day care | $13.56/hr | $13.56/hr |
| Outside school hours care (OSHC) | $14.63/hr | $12.81/hr |
| In-home care | $39.80/hr (per family, not per child) | $39.80/hr |
The caps are indexed annually based on CPI. NestWise updates them within weeks of the Government publishing new figures each July — we track that so you don't have to.
How many hours subsidised — the 3 Day Guarantee (from 5 January 2026)
This is the part that recently changed. Until 5 January 2026, CCS used an "activity test" that tied your subsidised hours to the lower-earning parent's recognised activity (work, study, volunteering). The activity test was replaced on 5 January 2026 by the 3 Day Guarantee.
Under the new system:
| Recognised participation per fortnight | Subsidised hours per fortnight per child |
|---|---|
| Less than 48 hours (or none at all) | 72 hours — the 3 Day Guarantee, 3 days/week |
| More than 48 hours | 100 hours |
For couples, the lower of the two parents' recognised participation sets the family's tier. So if you do 60 hours but your partner does 40, the family lands at the 72-hour tier — not 100. This catches people out.
The big shift: every CCS-eligible family now gets at least 72 hours per fortnight regardless of activity. Under the old test, families below the 8-hours-per-fortnight tier got zero subsidised hours unless they qualified for an exemption. That floor is now gone.
What counts as "recognised participation"? Paid work, self-employment, study, training, volunteering, looking for work, and a handful of other categories. There are also exemptions (parental leave, carer responsibilities, transitioning from income support) where the participation requirement doesn't apply at all. Full list: Services Australia — Activity level and subsidised hours.
The five gotchas that catch families out
1. The hourly cap, not your fee. "90% subsidy" doesn't mean 90% off whatever your provider charges. It's 90% off your fee or the Government's hourly cap, whichever is lower. If your centre charges above the cap, you pay full price for the difference.
2. Couples are capped at the lower partner's participation. If you work 60 hours a fortnight and your partner does 40, the family is in the 72-hour tier, not 100. The lower partner sets the cap.
3. 5% withholding by default. Centrelink holds back 5% of your subsidy each fortnight and squares up after you lodge your tax return. If your income comes in higher than estimated, you can owe a chunk back. You can ask Centrelink to withhold more (or less) if you want a different cashflow-vs-risk balance.
4. Income estimates matter — a lot. Centrelink uses your estimate of family income for the year, not your last tax return. An out-of-date estimate means a wrong applicable percentage, which means an end-of-year debt or refund. NestWise's Rate Checker is specifically built to catch this gap before it bites — run it free here.
5. Absences still count — up to 42 days. CCS keeps paying during periods when your child isn't attending, if they're still enrolled. The limit is 42 absence days per child per year before extra documentation is required.
What's NOT covered by CCS
- Informal care (grandparents, friends, family) — not eligible.
- Private nannies or babysitters unless registered through an approved in-home care service.
- One-off / event care outside an approved provider.
If your family situation is unusual (transitioning from income support, grandparent carers, temporary financial hardship, children at risk), there's a separate, extra layer called Additional Child Care Subsidy (ACCS) that can lift your effective subsidy to 100%. It's not automatic — you apply through Centrelink. NestWise links you to the right place: Services Australia — Additional CCS.
How NestWise calculates your CCS
NestWise's calculator implements the formula step by step using the exact figures above:
- Family income test → your applicable percentage.
- Hourly-cap comparison vs your actual fee.
- Higher-rate uplift if you have multiple children under 5.
- 3 Day Guarantee → subsidised hours per fortnight (with the couples lower-partner rule).
- 5% withholding applied.
The whole engine is locked behind 198 regression tests that run on every code change — if a single number drifts, the deploy doesn't ship. The full source list for every rule we use is on the sources page. And NestWise updates rates within weeks of the Government publishing them, so what you see is current.
Once you've read this, the next step is real numbers for your family — not someone else's worked example.
What to read next
- Family Tax Benefit Part A — how much will I get? — FTB-A often pays alongside CCS; it's a bigger amount than most families expect.
- The FTB-CCS debt trap — how one income mistake causes two debts — the most common cause of a Centrelink debt at tax time, and how to avoid it.