Child Care Subsidy
CCS, explained.
Child Care Subsidy can feel complicated. It doesn't need to.
We've broken down the numbers, the rules and the steps so you can understand what affects your CCS, and what you may actually pay for care.
Your CCS comes down to three things: your percentage, your subsidised hours, and the hourly fee CCS can be calculated on.
1. Your percentage
Worked out by Services Australia from your family's estimated combined income.
2. Your subsidised hours
How many hours per child, per fortnight your subsidy can apply to.
3. The hourly fee CCS uses
Either your service's hourly fee or the government hourly cap, whichever is lower.
CCS in 60 seconds
Up to 90%
Standard CCS rate
Eligible families with combined family income up to $88,520 can receive a standard CCS rate of 90%.
72 hours
The minimum subsidised hours
Under the 3 Day Guarantee, CCS-eligible families can access at least 72 subsidised hours per child, per fortnight.
Up to 100 hours
For eligible families
Some families can receive 100 subsidised hours per child, per fortnight, depending on participation and other qualifying circumstances.
$15.19 per hour
2026–27 CCS hourly rate cap
For children below school age in Centre Based Day Care, $15.19 is the maximum hourly amount the government uses when calculating CCS. It is a subsidy calculation limit, not a cap on what a service may charge.
90% is the standard maximum. Higher CCS rates of up to 95% may apply to second and younger eligible children, so 90% is not the absolute maximum CCS rate in every circumstance.
The important part: your CCS percentage is not always simply applied to your full daily fee.
How CCS is worked out
1
Your family income
Services Australia determines your family's standard CCS percentage from your estimated combined family income.
Between $88,520 and $538,520, the percentage decreases by 1 percentage point for each $5,000 of family income.
2
Your subsidised hours
The 3 Day Guarantee changed this in 2026.
From 5 January 2026, all CCS-eligible families can access at least 72 subsidised hours per child, per fortnight.
Eligible families can receive 100 hours per child, per fortnight where relevant circumstances apply, including:
- more than 48 hours of recognised participation per fortnight
- caring for an Aboriginal and/or Torres Strait Islander child
- a valid exemption or exceptional circumstances
- receiving ACCS child wellbeing, temporary financial hardship or grandparent payments
72 hours is a CCS entitlement. It does not guarantee a child care place or require a family to book exactly three days.
How do my booked days fit within my CCS hours?
CCS hours are calculated over a fortnight, so both the number and length of your booked sessions matter.
For example, a family with 72 subsidised hours per fortnight could attend three 11.5-hour sessions each week. That totals 69 hours across the fortnight, so all three sessions fit within the 72-hour entitlement.
Families entitled to 100 subsidised hours per fortnight have additional flexibility. For example, five 10-hour sessions each week totals 100 hours across the fortnight.
Your Centre team can help you understand how your booked sessions fit with your CCS hours.
3
The hourly rate cap
The hourly rate cap is not a fee cap
Child care fees vary between services. The CCS hourly rate cap does not set the fee a service must charge. It sets the maximum hourly amount the government will use when calculating CCS.
A service's fee may reflect factors such as its operating hours, staffing and service model, learning environments, facilities, meals and other inclusions, resources and local operating costs.
Your CCS percentage
×
the lower of
your service's hourly fee
or
the government hourly rate cap
=
your CCS entitlement
For 2026–27 Centre Based Day Care, the cap for children below school age is $15.19 per hour.
- If the service's hourly fee is below the cap, CCS is calculated on the actual hourly fee.
- If the hourly fee is above the cap, CCS is calculated on the cap rather than the entire hourly fee.
Your CCS percentage and your service fee are two different things.
Your CCS percentage tells you how much subsidy may apply to the eligible hourly amount. Your actual out-of-pocket cost also depends on the service fee, the government hourly rate cap, your available subsidised hours and CCS withholding.
When comparing child care fees
It can be helpful to look beyond the daily fee alone. Compare your estimated out-of-pocket cost after CCS, the length of the session, and what is included in the service you are choosing.
Things such as operating hours, educators and staffing, learning environments, facilities, meals and other inclusions can differ between services.
At First5Years, our daily fee includes meals, nappies, wipes and sunscreen, alongside our early learning program and care throughout the day.
Different hourly rate caps apply to school-aged children. You can check the current caps on the Services Australia website.
4
More than one young child in care
Families with more than one CCS-eligible child aged 5 or under in care may receive a higher CCS rate for their second and younger eligible children.
See 2026–27 higher CCS rates
Show me an example
So what might I actually pay?
An illustrative example only. This is not a First5Years fee quote. This example assumes the family has sufficient subsidised hours available for the full 11.5-hour session.
Step 1
Work out the hourly fee
$179.50 ÷ 11.5 hours = approximately $15.61 per hour.
Step 2
Apply the CCS hourly rate cap
The service fee in this example works out to approximately $15.61 per hour. For CCS purposes, the government calculation is capped at $15.19 per hour, so CCS is calculated using $15.19.
Step 3
Calculate the CCS entitlement
90% × $15.19 × 11.5 hours = approximately $157.22 CCS entitlement, before withholding.
Step 4
Services Australia withholding
Services Australia normally withholds 5% of CCS to help reduce the risk of an overpayment.
If, when Services Australia balances this family's CCS, the $7.86 withholding was not needed to cover an overpayment, it would form part of the family's CCS top-up.
The 5% withholding is not a First5Years fee. It is part of the CCS system and is considered when Services Australia balances your CCS.
Actual family outcomes vary. 5% is the usual default, and a family can ask Services Australia to change it.
What happens to the 5% CCS withholding?
Think of the 5% withholding as a buffer.
Services Australia normally withholds 5% of your CCS entitlement each fortnight to reduce the chance of you being overpaid. It is not a First5Years fee and it is not 5% of your child care fee.
After the financial year ends, Services Australia balances your CCS using your confirmed family income, your circumstances and your child's attendance information.
If the withholding wasn't needed to cover an overpayment
it is included in your CCS top-up.
If you received too much CCS during the year
some or all of the amount withheld may be used to reduce what you owe.
If you were entitled to more CCS than you received
your top-up may be more than the amount that was withheld.
Any remaining CCS top-up is generally paid by Services Australia to your nominated bank account after balancing. Existing CCS-related debts may be deducted first.
When does this happen?
CCS balancing starts from mid-August after the end of the financial year, once Services Australia has the information it needs, including confirmed family income and attendance information.
Can I change the 5%?
Yes. Families can change their CCS withholding percentage through their Centrelink online account. Services Australia currently allows this to be changed online up to twice each financial year.
Sources: Services Australia, CCS withholdings and Services Australia, balancing Child Care Subsidy.
Why am I paying more than my CCS percentage suggests?
The hourly cap
Your CCS may be calculated on the government cap rather than your full hourly fee.
The 5% withholding
Services Australia normally withholds part of your CCS during the year. What happens to it.
Your subsidised hours
Not every booked hour will necessarily attract CCS if you exceed your entitlement.
More than one child
Children in the same family can have different CCS percentages.
CCS isn't fully set up yet
Your CCS claim, CRNs, CWA and enrolment confirmation need to be complete.
Your circumstances have changed
Income estimates and family circumstances can change your entitlement.
Starting with us? Here's what needs to happen.
1
Claim CCS and find your CRNs
Get a Centrelink Customer Reference Number and lodge your Child Care Subsidy claim.
Get your CRN & apply for CCS2
Give First5Years your CRNs
We need the claiming parent's CRN and the child's CRN exactly as Centrelink records them.
3
Sign your CWA
Your Complying Written Arrangement confirms your child's care arrangement before CCS can be paid.
How to sign your CWA4
Confirm your First5Years enrolment
After we submit your enrolment, you confirm it through Centrelink.
How to confirm your enrolmentUntil the required CCS and enrolment steps are complete, full fees may appear on your account.
Every family is different.
The best way to estimate your own out-of-pocket cost is the Australian Government Starting Blocks Child Care Subsidy Calculator.
Use the official CCS CalculatorQuestions families ask
Does First5Years decide my CCS percentage?
No. Services Australia works out your CCS percentage from your family's estimated combined income and circumstances. We apply the subsidy Services Australia advises to your account.
Who receives the CCS payment?
Your CCS is generally paid directly to your child care service, and it is applied to your fees. You pay the remaining gap.
Why does Services Australia withhold 5%?
Services Australia normally withholds 5% of your CCS entitlement each fortnight to reduce the chance of you being overpaid. It is not a First5Years fee.
What happens when CCS is balanced?
After the financial year ends, Services Australia compares the CCS you received with what you were entitled to, using your confirmed family income, your circumstances and your child's attendance information. Balancing starts from mid-August.
What if I have more than one young child in care?
Families with more than one CCS-eligible child aged 5 or under in care may receive a higher CCS rate, up to 95%, for their second and younger eligible children.
What if my circumstances change?
Tell Services Australia as soon as your income estimate, care arrangements or family circumstances change. Your CCS percentage and subsidised hours can change with them.
Why can a child care service charge more than the CCS hourly rate cap?
Because the CCS hourly rate cap is not a fee limit. It is the maximum hourly amount the government uses when calculating Child Care Subsidy. Child care services set their own fees, which can vary depending on factors such as operating hours, staffing and service model, facilities, learning environments, meals and inclusions, resources and local operating costs. When comparing services, consider both your estimated out-of-pocket cost after CCS and what is included in the service you are choosing.
What happens with absences?
CCS can generally still be paid for a limited number of absence days each financial year, and additional absences may be covered in certain circumstances. The rules are detailed, so check the official Services Australia guidance for your situation.
Updated for 2026–27. Last reviewed August 2026.
This guide provides general information only. Child Care Subsidy eligibility and entitlement are determined by Services Australia and can change depending on family circumstances and government settings.
Sources