Federal Child Care Subsidy Program in Australia, Eligibility, Payment Rates 

Starting from July 8, 2024, the Federal Government’s CCS provides families with a streamlined and essential service fee reduction. This new means-tested subsidy has replaced the previous CCB and CCR, simplifying the process compared to the older multi-payment plans.

Federal Child Care Subsidy Program

The CCS is the Australian Government’s main child care fee assistance program. It is designed to help families with the cost of early childhood education and care services, making quality child care more accessible. Starting from 8 July 2024, it replaced the previous Child Care Rebate and Child Care Benefit programs.

The CCS is designed to be an income-tested subsidy, meaning the amount of assistance a family receives is based on their combined income. This ensures that the program targets low- and middle-income families who need the most support in affording quality child care.

Eligibility for the Federal Child Care Subsidy Program

The CSS program offers valuable assistance to Australian families, but eligibility is crucial to accessing this support. The specific criteria families must meet is:

  • The child must be 13 years of age or younger. 
  • Children enrolled in secondary school typically aren’t eligible for the CCS unless they have an exemption. However, the CCS can cover outside school hours care (OSHC) for school-aged children.
  • The child care service used must be registered and approved by the Australian Children’s Education and Care Quality Authority (ACECQA). ACECQA ensures the service meets national quality standards for child care.
  • Paying Fees: The family must be responsible for paying the child care fees for the service they choose.
  • The child must be an Australian resident.
  • The child’s immunisation records must be up-to-date. This requirement aligns with the Family Tax Benefit (FTB) Part A eligibility.
  • Families must undertake a minimum number of approved activities each week to qualify for the CCS. 
  • The CCS is income-tested, meaning the amount a family receives depends on their combined income. Higher income families receive a lower percentage of their child care fees subsidised.

How the Federal CCS Works in Australia?

The Child Care Subsidy (CCS) program helps Australian families manage the cost of early childhood education and care services:

Income-Based Subsidy:

  • A family’s annual taxable income determines the percentage of CCS they’re eligible for.
  • There’s always a gap between the subsidy and the total child care fees charged by the service provider.
  • The CCS rate itself remains consistent for all families (except for second and younger children as explained below).

Rates for Second and Younger Children (as of July 8th, 2024):

  • $0 to $141,321: 95% subsidy rate
  • >$141,321 to <$186,321: Decreases by 1% for every $3,000 of income
  • $186,321 to <$265,611: 80% subsidy rate
  • >$265,611 to <$355,611: Decreases by 1% for every $3,000 of income
  • $355,611 to <$365,611: 50% subsidy rate
  • >$365,611: Standard CCS rate applies (no additional benefit for second and younger children)

Activity Test:

  • The number of subsidised care hours depends on the activity test.
  • Higher activity levels (work, study, etc.) lead to more subsidised hours (up to 100 hours per fortnight).
  • Approved activities include paid work, study, volunteering, and searching for work.
  • Certain activities have time limits (unpaid leave, setting up a business).

Hours of Activity Per Fortnight and Subsidy Entitlement:

  • The parent/guardian with the lowest activity level determines subsidised hours.
  • Hours of subsidy are based on activity level (exceptions apply for Aboriginal and/or Torres Strait Islander children).

Activity Level | Hours of Subsidy (per child, per fortnight)

  • Less than 8 hours | 0 hours (if income > $83,820) | 24 hours (if income <= $83,820)
  • 8 to 16 hours | 36 hours
  • 16 to 48 hours | 72 hours
  • Over 48 hours | 100 hours

CCS Rate Caps by Service Type:

  • An hourly rate cap is set based on the approved child care service you use.
  • Centre-based daycare: $14.29 (indexed annually)
  • Family daycare: $13.24
  • Outside school hours care: $14.29 (except WA: $12.51 for school-aged children)
  • Families with Aboriginal and/or Torres Strait Islander children receive a minimum of 36 subsidised hours per fortnight, regardless of activity level.
  • Casual workers can estimate their fortnightly work hours based on a three-month period.

Calculating the Potential Federal CCS Payment

The Child Care Subsidy (CCS) program helps Australian families manage child care costs, but the actual amount you receive depends on several factors. Here is how to estimate your potential CCS payment:

  • Combined Family Income: This is the primary factor influencing your CCS rate. Higher income families receive a lower percentage of the subsidy. 
  • Type of Child Care Service: The CCS rate differs for centre-based care and outside school hours care (OSHC). Centre-based care typically receives a higher subsidy rate compared to OSHC.
  • Approved Activity Hours: To be eligible for the CCS, families must undertake a minimum number of approved activities per week. These activities include work, study, volunteering, or actively seeking employment. 
  • While Services Australia handles the final calculations, you can estimate your potential CCS payment using the CCS Estimator Tool provided by Services Australia.

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