Child Care Subsidy

The Child Care Subsidy builds on the Productivity Commission’s recommendations and will make the system simpler, more affordable, more flexible and more accessible for families.

From July 2018, the Child Care Subsidy will replace the Child Care Benefit and the Child Care Rebate with a single, means-tested payment to better support families with access to affordable child care.

Family eligibility for the Child Care Subsidy will be subject to a three-step activity test, more closely aligning the hours of subsidised care with the hours of work, training, study or other recognised activity undertaken, and providing for up to 100 hours of subsidy per fortnight. 

Families earning $65,710^ or less will receive a subsidy of 85 per cent of the actual fee paid (up to an hourly fee cap). For family incomes above $65,710^, the subsidy tapers down to 20 per cent when family income reaches $340,000^ or more.

Families on incomes below $65,710^ a year will be able to access 24 hours of subsidised care per fortnight without having to meet the activity test.

More information to support families and services to adapt to the new system will be available before the changes come into effect in July 2018.

^Note: These provisions of the Package, as introduced in legislation on 2 December 2015, will be increased by CPI for implementation in July 2018.