Child Care Subsidy (CCS) Explained
18 June 2025
Have you heard of the BIG changes coming to the Child Care Subsidy this July and the new ‘3 Day Guarantee’ scheme? Read on for a breakdown of all the CCS changes and how they’ll affect your budget.
Enrolling your little one into childcare can be stressful for parents, so government subsidies are often the last thing on your mind.
However, the Child Care Subsidy (CCS) is a Federal Government subsidy you should know about. The CCS cuts out a large part of your childcare fees which will result in significant savings for families in the cost of childcare.
Family structure and dynamics across Australia continue to evolve, with more parents relying on a dual-income to combat cost of living rises. As such, the need for early learning education and childcare services has never been more prevalent.
The Australian Government’s new ‘3 Day Guarantee’ Child Care Subsidy will make early learning more accessible and affordable than ever before!
What’s more, the Federal Government will remove the ‘Activity Test’, a huge obstacle Australian families face when seeking childcare subsidy (CCS) for their children.
Here’s everything you need to know.
How Does the Current CCS Payment Work?
Currently, the Federal Government assists families with childcare payments in the form of the CCS. This payment is made directly to childcare providers, like Explorers, who then pass it on to families as a fee reduction.
These payments scales depending on your combined family income:
| Your Family Income | Child Care Subsidy % |
| $80,000 or less | 90% |
| Between $80,000 – $530,000 | Between 90% and 0% – decreasing 1% for every $5,000 your family earns |
However, a change to the current CCS payment will take effect on 7 July 2025 which will have some minor changes to your CCS payments.
Changes to the CCS
On 7 July 2025, the Federal Government will alter the CCS to make childcare more accessible for families.
Notably, the family income threshold to be eligible for the maximum amount of Child Care Subsidy will increase.
The new CCS system is as follows:
| Family Income | Child Care Subsidy % |
| $0 – $85,279 | 90% |
| More than $85,279 to below $535,279 | Between 90% and 0% – The percentage decreases by 1% for every $5,000 of income a family earns |
| $535,279 or more | 0% |
On top of these changes, the Australia Government is also rolling out a brand new Child Care scheme at the beginning of 2026, one that will be a complete gamechanger and make early learning more accessible than ever.
3 Day Guarantee Subsidy Explained
To assist families further, the Australian Government are investing $426.7 million over the next five years to guarantee eligible families at least 3 days of subsidised childcare (CCS).
The 3-day guarantee will kick into effect from January 5, 2026.
As outlined by the Department of Education, the aim of the 3 day guarantee is to “support universal access” to childcare and early learning education, “ensure more children are school-ready” and finally, “provide targeted cost-of-living relief to families.”
This subsidy will make the early learning sector more affordable and accessible for parents, reducing financial strain and encouraging flexibility for key demographics that include but are not limited to:
- Working parents
- Single parents
- First-time parents
- Low-income families
Furthermore, First Nations families will now have access to 100 hours of subsidised care per fortnight – a substantial increase from the previous minimum of 36 hours each fortnight.
Who is eligible?
In Australia, every family that earns less than $533,280 per year will be eligible for the 3 Day Guarantee. Families earning above this threshold will not be able to access the subsidy.
The Australian Government has estimated that in its first full financial year, over 66,000 families will be benefit from the 3 Day Guarantee.
What’s more, over 100,000 families will also be eligible for additional hours of subsidised care, granting greater flexibility when exploring childcare and early learning services in the process.
How much money will families save?
The Government fact sheet published alongside the announcement of the subsidy outlines how much families can expect to save.
This estimate has been created based on the following parameters:
- One child in care for 36 hours per week (three full days).
- 50 weeks of care per year.
- Average Centre-Based Day Care hourly fees for 2025–26.
- Rounded savings estimates for clarity.
| Annual Household Income | Savings Per Week | Savings Per Year (50 weeks of care) |
| $90,000 | $230 | $11,400 |
| $120,000 | $220 | $10,630 |
| $140,000 | $200 | $10,110 |
For example, a couple with a combined family income of $90,000 per annum were previously only eligible for 18 hours of subsidised ECEC per week. Starting in January 2026, they will now have access to 36 hours per week (72 hours per fortnight) under the 3 day guarantee scheme.
The amount each family can save varies depending on a range of factors, such as:
- Family income threshold
- Hourly fee of their chosen Childcare centre
- Number of days childcare services are utilized
Activity Level Test for CCS Removed
Starting January 2026, the Activity Test will no longer be a barrier for families who have previously not qualified for CCS via the old calculator.
The activity test, first introduced in 2018, required a parent to work, study or volunteer to qualify for childcare subsidies. An estimated 126,000 children, many of whom come from low-income families, have been unable to access childcare and early learning education because their parents failed the activity test.
This is fantastic step forward in making these services available to all Australian families, particularly those from low socio-economic backgrounds.
Explorers and the CCS
At Explorers Early Learning, we strive to provide the best quality childcare and early learning education. Through our Reggio-Emilia inspired approach, all our centres encourage curiosity, spark excitement in learning and support families and children along the journey.
To qualify for the CSS, you must have a MyGov account and complete a CCS assessment. Additionally, your MyGov account must be linked to Centrelink to qualify for, and receive, the CCS.
You can register for a MyGov account here.
As mentioned previously, the CCS is paid directly to the Centre and is based on your child’s attendance records. The gap between the Centre’s daily charge and the CCS will be payable by the family via direct debit.
If you already receive CCS, these changes will automatically come into effect as of 7 July 2025. You don’t need to do anything, just make sure your family income estimates are accurate and to regularly update them if your circumstances change.
For more information on the changes to the CCS, please visit the Department of Education website for an in-depth factsheet. Otherwise, you can always contact our Family Support Team at 1300 000 335 or visit our Family Support Portal.
🍃 Families looking to utilise the 3 Day Guarentee subsidy to increase their days with Explorers – or begin their childcare journey – book a tour at one of our centres or visit our website to learn more.