Childcare costs are a significant part of the family budget — but the Child Care Subsidy (CCS) can dramatically reduce what you pay out of pocket. In 2026, the CCS system underwent its most significant reform in years, and if you haven't reviewed your entitlements recently, you could be leaving money on the table.
This guide explains the CCS system in plain language, covers the new 3 Day Guarantee that came into effect on 5 January 2026, and includes a practical cost breakdown for Healesville families.
What Is the Child Care Subsidy?
The Child Care Subsidy is a means-tested Australian Government benefit that reduces the cost of approved childcare for eligible families. The subsidy is paid directly to approved childcare providers (like Loving Start Childcare & Education), which reduces the fees families pay.
To be eligible for CCS, families must:
- Have a child who meets immunisation requirements
- Use an approved childcare service
- Meet the income threshold (currently up to $535,279 combined family income per year)
- Be an Australian citizen, permanent resident, or hold a specified visa subclass
The Big Change: The 3 Day Guarantee (From 5 January 2026)
From 5 January 2026, the Child Care Subsidy activity test was replaced with the 3 Day Guarantee. This is the most important change to childcare subsidies in recent years.
What the 3 Day Guarantee Means
Under the previous system, the number of subsidised hours you received depended on how many hours of "recognised activities" (work, study, training, etc.) you undertook each fortnight. This left many families — particularly those with caring responsibilities, part-time work, or irregular employment — with limited subsidy support.
Under the 3 Day Guarantee:
- All CCS-eligible families receive at least 72 hours of subsidised care per fortnight (equivalent to 3 days per week), regardless of their work or study activity.
- Families with more than 48 hours of recognised participation per fortnight (such as full-time work or a combination of work and study), or those with a valid exemption, can access 100 hours of subsidised care per fortnight.
- Aboriginal and Torres Strait Islander children are automatically eligible for 100 hours of subsidised care per fortnight.
This change means thousands more Australian families can now access quality early learning, regardless of their employment status.
Who Benefits Most?
According to the Minderoo Foundation, around 67,000 families are expected to benefit in the first full year of the 3 Day Guarantee, and more than 100,000 families are now eligible for additional hours of subsidised care. Families earning between $50,000 and $100,000 are expected to save an average of $1,460 per year.
CCS Income Thresholds for 2026
The subsidy percentage you receive is based on your combined family income. Here is how it works for the 2025–26 financial year:
| Combined Family Income | CCS Subsidy Rate |
|---|---|
| $0 – $85,279 | 90% |
| $85,279 – $135,279 | Reduces from 90% (tapering) |
| $135,279 – $185,279 | Continues tapering |
| $185,279 – $535,279 | Continues tapering to 0% |
| Over $535,279 | Not eligible for CCS |
Important: The CCS is calculated against an hourly rate cap, not the actual fee charged. For Long Day Care, the current hourly rate cap is $14.63 per hour. If your centre charges more than this cap, you pay the difference in full (known as the "gap fee").
Practical Cost Examples for Healesville Families
The following examples are based on a child attending 3 days of Long Day Care per week. Actual fees will vary by centre. Always confirm exact fees and subsidy calculations with your provider and Services Australia.
| Family Income | CCS Rate | Approx. Weekly Cost (Before CCS) | Approx. Weekly Out-of-Pocket |
|---|---|---|---|
| $60,000 | 90% | $330 | ~$33–$50 |
| $100,000 | ~80% | $330 | ~$66–$85 |
| $150,000 | ~65% | $330 | ~$115–$130 |
| $200,000 | ~52% | $330 | ~$160–$180 |
| $300,000 | ~30% | $330 | ~$230–$250 |
*Note: These are estimates only. Use the MoneySmart Childcare Calculator or contact Services Australia on 13 61 50 for a personalised estimate.*
How Is the CCS Calculated?
The CCS calculation has three components:
- Your income: Determines the percentage of subsidy you receive
- The hourly rate cap: Sets the maximum fee the subsidy applies to ($14.63/hour for Long Day Care)
- Your subsidised hours: Under the 3 Day Guarantee, at least 72 hours per fortnight
Example calculation:
A family earning $75,000 receives a 90% CCS rate. Their childcare centre charges $165/day (approx. $13.75/hour for a 12-hour day). Because this is below the hourly cap of $14.63, the subsidy applies to the full fee. Their daily cost before CCS: $165. CCS covers 90%: $148.50. Gap fee: $16.50 per day. For 3 days a week, that's approximately $49.50 per week.
How to Apply for Child Care Subsidy
- Log in to myGov (my.gov.au) and link your Centrelink account
- Select "Make a claim" and choose "Child Care Subsidy"
- Provide your family income estimate, your child's details, and immunisation status
- Submit your claim — Services Australia will assess your eligibility
- Once approved, your subsidy is paid directly to your childcare provider
Keep your income estimate up to date throughout the year. If your actual income is higher than your estimate, you may face a debt at tax time. If it is lower, you may be underclaiming and paying more than necessary.
Frequently Asked Questions About CCS in 2026
Q: Does the 3 Day Guarantee mean I automatically get 3 days of free childcare?
A: Not quite. You receive 72 hours of subsidised care per fortnight, but "subsidised" means the government covers a percentage of the cost based on your income — not 100% of it. You still pay a gap fee.
Q: What if I need more than 3 days per week?
A: If you undertake more than 48 hours of recognised activities per fortnight (e.g., work, study, volunteering, training), you are eligible for 100 hours of subsidised care per fortnight — approximately 5 days per week.
Q: Do the CCS changes affect Before and After School Care?
A: Yes. The 3 Day Guarantee applies to all approved care types, including Outside School Hours Care (OSHC). At Loving Start, Before School Care and After School Care are each $30 per session.
Q: What happens if I don't update my income estimate?
A: If your income is higher than expected, Services Australia will balance your CCS at tax time and you may need to repay an overpayment. Always update your estimate as soon as your income changes.
Q: Is the hourly rate cap the same for all types of care?
A: No. The hourly rate cap varies by care type. For Long Day Care, the 2025–26 cap is $14.63/hour. Family Day Care and In Home Care have different caps.
Making Childcare Affordable in Healesville
At Loving Start Childcare & Education, we are committed to making quality early childhood education accessible to all Healesville families. Our team can help you understand your CCS entitlements and work through the application process with you.
Ready to explore your options? Contact us today:
- Call us: 03 5905 3735
- Email: Healesville@Lovingstart.com.au
- Visit: 349–353 Maroondah Hwy, Healesville VIC 3777