Child Care Subsidy (CCS) Explained
22 March 2023
Have you heard of the BIG changes coming to the CCS this July? 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.
These payments scale depending on your combined family income and currently cover up to 85% of your childcare fees – increasing to 90% in July 2023!
In this post, we give an overview of the CCS, how it’s calculated and how it’ll change in 10 July 2023.
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 %|
|$0 – $72,466||85%|
|More than $72,466 to below $177,466||Between 85% and 50% – the percentage goes down by 1% for every $3,000 of income your family earns|
|$177,466 to below $256,756||50%|
|$256,756 to below $346,756||Between 50% and 20% – the percentage goes down by 1% for every $3,000 of income your family earns|
|$346,756 to below $356,756||20%|
|$356,756 or more||0%|
However, a change to the current CCS payment will take effect on 10 July 2023 which will have significant changes to your CCS payments.
Changes to the CCS
The Federal Government is altering the CCS to make childcare more accessible for families. From 10 July 2023, the way CCS is calculated based on your family income will change.
However, be sure to remember that the discount will also be affected by factors such as session hours, session fees, CCS hourly cap, and hours/percentage entitlements.
The new CCS system is as follows:
|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|
Additionally, if you have more than one child aged 5 or under in care, you can still get a higher rate for second and younger children. In other words, your first child will be calculated at the ‘standard rate’ for your family income bracket, but any additional children may be calculated at the ‘higher rate’ if:
- You get or will be eligible for CCS.
- Your family’s combined income is under $362,408.
- You have more than one CCS eligible child aged 5, or younger.
- Your higher rate child or children are using childcare.
Your activity level refers to the numbers of hours of subsidised childcare your family can access per week. Activity level can include any of the following:
- Paid work (including being self-employed).
- Paid or unpaid leave, including paid or unpaid parental or maternity leave.
- Unpaid work experience or unpaid internship.
- Actively setting up a business.
Activity level can also include:
- An approved course of education or study.
- Training to improve work skills or employment prospects.
- Actively looking for work.
- Volunteering and other activities on a case-by-case basis.
Importantly, some activities are only recognised for a certain amount of time:
- Periods of unpaid leave for up to six months – this doesn’t apply to unpaid parental leave.
- Setting up a business for six months out of every twelve months.
There are four activity levels:
|Activity level each fortnight||Hours of subsidised care each fortnight|
|Less than 8 hours||0 hours if you earn above $72,466|
24 hours if you earn $72,466 or below
|More than 8 to 16 hours||36 hours|
|More than 16 to 48 hours||72 hours|
|More than 48 hours||100 hours|
You can access up to 36 hours of subsidised childcare per fortnight if your only activity is either:
- actively looking for work
To access this amount, you must spend a minimum of 8 hours each fortnight doing the activity.
CCS Hourly Cap
The maximum hourly rate the Government will subsidise is based on the type of childcare service. In 2023, the maximum hourly rate for Centre-based long day care, such as Explorers, is $12.74.
Importantly, there is currently no annual cap for childcare.
Explorers and the CCS
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 10 July 2023. 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.