Most Melbourne families receive between 50% and 90% Child Care Subsidy based on combined family income. From 5 January 2026, all eligible families receive at least 72 subsidised hours per fortnight (3 days per week) regardless of work status, under the 3 Day Guarantee. At the median Melbourne fee of around $160/day, a family earning $120,000 could pay as little as $38–42/day out of pocket. The subsidy is paid directly to your centre — you only pay the gap.
The Child Care Subsidy (CCS) is the Australian Government's primary financial support for families using approved childcare. It is means-tested and paid directly to your childcare centre, reducing the daily fee you pay. Almost all long day care centres in Melbourne are CCS-approved.
The subsidy percentage you receive depends on two factors: your combined family income, and the number of hours of recognised participation (work, study, training or volunteering) you and your partner undertake each fortnight. From 5 January 2026, a minimum of 72 hours per fortnight is guaranteed to all eligible families regardless of participation level.
Your CCS percentage is determined by your combined annual family income. The table below shows the current thresholds for the 2025-26 financial year, sourced from Services Australia and the DSS Family Assistance Guide (effective 7 July 2025).
The subsidy tapers by 1 percentage point for every $5,000 of income above $85,279, reaching 0% at $535,279. There is no annual cap on CCS.
Families with more than one child aged 5 or under in care may receive a higher CCS rate for their second and younger children — up to 95% for families earning up to $143,273, and up to 80% for families earning up to $267,563. This applies even if the children attend different centres.
Source: DSS Family Assistance Guide 1.1.I.70 (2025-26 financial year)
From 5 January 2026, the activity test was replaced by a new system. All CCS-eligible families now receive a minimum of 72 subsidised childcare hours per fortnight, equivalent to 3 days per week. This is known as the 3 Day Guarantee.
If you have a partner, Services Australia uses the lower of your two participation levels to determine your hours. The income-based CCS percentage is unchanged — only the hours calculation has been updated.
Recognised participation types include paid work, self-employment, study, training, volunteering, and looking for work. Families who previously received fewer than 72 hours due to low activity hours are the primary beneficiaries of this change.
Source: Services Australia, Child Care Subsidy changes (effective 5 January 2026)
Daily long day care fees in Melbourne range from around $110 in outer suburbs to over $200 in premium inner areas. The CCS applies to the lower of the actual daily fee or the government's hourly rate cap. For centre-based long day care in 2025-26, the cap is $14.63 per hour, equivalent to $146.30 for a standard 10-hour day.
This means if your centre charges $160/day, the subsidy is calculated on $146.30 (the capped amount), not the full $160. The $13.70 difference between the cap and the actual fee is paid by you on top of your gap fee.
A family earning $120,000 combined, using 3 days per week at a centre charging $160/day:
For a suburb-by-suburb breakdown of daily fees across Melbourne, see our fee comparison guide.
Rate cap source: DSS Family Assistance Guide 3.5.3 (2025-26 financial year)
The subsidy starts from the date your child begins attending an approved service, provided your claim is lodged. There is no waiting period once your assessment is complete. If your income changes during the year, update your estimate in myGov to avoid an end-of-year debt or underpayment.
Melbourne has one of the widest childcare fee ranges of any Australian capital. Outer suburbs like Cranbourne East average around $150/day, while inner-south suburbs like St Kilda average $162/day or more. The hourly rate cap of $14.63 means families at higher-fee centres pay a larger unsubsidised portion, regardless of income.
For families choosing between centres at different price points, the CCS effectively reduces the real cost difference between centres. A centre charging $180/day and one charging $150/day may only differ by $15–20/day in actual out-of-pocket cost after the subsidy is applied. This is why we recommend comparing gap fees rather than headline fees. Quality, as measured by the NQS rating, should weigh as heavily as price in your decision.
No. The annual CCS cap was removed in July 2023. There is no upper limit on the total subsidy amount you can receive per year, regardless of income.
From 5 January 2026, all CCS-eligible families receive at least 72 hours of subsidised childcare per fortnight (3 days per week), regardless of work or study status. This replaced the old activity test, which previously limited access for families with low or no recognised activity hours. Families doing more than 48 hours of recognised participation per fortnight can still access 100 hours.
Yes. CCS is assessed per child. If you have multiple children in approved care, you receive the subsidy for each child. Families with more than one child aged 5 or under in care also receive a higher CCS percentage for the second and younger children — up to 95% for families earning up to $143,273.
Update your income estimate in myGov as soon as possible. At the end of the financial year, your actual income is reconciled against your estimate. If you overestimated, you may receive a top-up. If you underestimated, you may owe money back to Services Australia.
CCS applies to approved long day care centres that deliver a kindergarten program as part of their daily service. Standalone sessional kindergartens (community kinders) are not CCS-eligible, but are covered by Victoria’s Free Kinder program.
Once you complete the online assessment through myGov/Centrelink, the subsidy typically begins from your child’s first day of attendance. Processing usually takes 1–2 weeks but can be backdated to the start date if there is a delay.
No. The $14.63/hour cap applies to centre-based long day care for children below school age (2025-26). Family day care has a separate cap of $13.56/hour. Outside school hours care and in-home care have different caps again. Always check the current rates on the Services Australia website.
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