The Child Care Subsidy - How It Works

The Child Care Subsidy (CCS) is the main federal payment that reduces the cost of approved childcare for Australian families. If you’re using a centre, family day care, or preschool listed in this directory, you’re almost certainly eligible for some level of subsidy.

How it works

CCS is paid directly to your provider, who then reduces your out-of-pocket fee. The amount you receive depends on three things:

1. Family income. Lower combined income means a higher subsidy percentage.
2. Activity test. The hours of subsidised care you can access depend on the lower-earning parent’s hours of “recognised activity” (work, study, volunteering, looking for work).
3. Service type. Different rates apply to centre-based care, family day care, outside school hours care, and in-home care.

Activity test (per fortnight)

Hours of activity	Subsidised hours of care per child
Less than 8	0 (with safety-net exceptions)
8 - 16	36
16 - 48	72
Over 48	100

Applying

You apply through myGov linked to Centrelink. You’ll need:

• A myGov account
• Centrelink linked to it
• Your child’s CRN (Customer Reference Number)
• Estimated annual family income

Once you’re enrolled, your provider will send a Complying Written Arrangement (CWA) for you to confirm in your myGov account. CCS doesn’t kick in until that’s confirmed.

Important points

• Annual reconciliation. CCS is paid based on your estimated income. At end of financial year, the actual is reconciled. If you under-estimated, you’ll owe money back.
• Withholding. By default, 5% is withheld to soften reconciliation surprises. You can adjust this.
• Vacancy gaps. CCS only pays for sessions you’re enrolled in, so booking and attendance patterns matter.

Beyond CCS

Some Newcastle families are eligible for Additional Child Care Subsidy (ACCS) - a top-up payment for grandparents, families experiencing temporary financial hardship, families transitioning to work, or where there’s a child wellbeing concern. Talk to your provider about eligibility.

For the official, always-current rates, see Services Australia - Child Care Subsidy.