Child Care Subsidy (CCS) is generally paid to providers who pass it on to families as a fee reduction. Families must make a co-contribution by paying the gap fee. Providers must report fee information to the government.
On this page:
Child Care Subsidy payments
From 10 July 2023, CCS is changing. Most families using child care will get more subsidy. Some families previously not eligible for CCS will now get it. You should inform families when the CCS changes will take effect with regard to your service’s billing practices.
Services Australia pays CCS to approved providers to pass on to families as a fee reduction.
In limited circumstances, Services Australia may pay CCS directly to a family.
Services Australia uses session reports to calculate CCS payments.
CCS fortnights
A CCS fortnight is a 2-week period that starts every second Monday.
Generally, we calculate CCS at the start of a CCS fortnight. This amount continues for the whole fortnight regardless of any change of circumstance.
For example, if a child turns 6 partway through a CCS fortnight, any younger children will keep the higher subsidy for the whole fortnight.
How payments are made
Payments are made to a provider's nominated bank account.
You must keep your bank account details up to date in the Child Care Subsidy System. Check and update your details via the Provider Entry Point (PEP) or your third-party software.
When payments are made
Services Australia processes payments at 9 am each Monday. Payments are for sessions of care that occurred in the week prior that were reported by 9 pm on Sunday.
Session reports submitted after 9 pm on Sunday are processed upon receipt, after 9 am on Monday.
| Session report submitted | Payment processed |
|---|---|
| Before 9 pm on Sunday | 9 am the following Monday |
| After 9 pm on Sunday | Upon receipt |
Payment adjustments
You can update or withdraw session reports up to 28 days after the start of the week for which the report relates.
Failure to update incorrect session reports within 28 days may result in compliance action.
If you update or withdraw a session report, any payment adjustments will be processed upon receipt.
Payment notifications
Once a payment has been processed, you’ll receive a payment advice in the Child Care Subsidy System. Access the payment advice via the PEP or your third-party software.
The payment advice outlines:
- how much CCS was paid
- how much CCS was withheld
- if any amount was taken as payment towards a debt owed
- the total amount paid to the provider
- if any amount was paid directly to the family.
Passing payments on to families
You must pass payments on to families, as a fee reduction, within 14 days of receiving it. If you cannot pass on a payment within this timeframe, you must pay it back to Services Australia via the Child Care Subsidy System.
Failure to pass payments on to families may result in compliance action.
You must provide a statement of entitlement to families who get CCS every fortnight. We outline what a statement of entitlement must include below.
Payments to families
Services Australia may occasionally pay CCS directly to a family. This occurs when care is provided before a family has been assessed as eligible for CCS.
Generally, families should make a CCS claim and establish their eligibility before their child attends care. You may occasionally provide care to a child before their claim has been finalised.
In this scenario, you should charge the family full fees. You should not charge fees based on estimated CCS or ACCS entitlements.
This is because Services Australia will pay any backdated CCS directly to the family if they are assessed as eligible.
Providers that charge fees based on estimated entitlements are responsible for recovering any unpaid amounts.
Services Australia may also pay CCS directly to a family if the family tells them about a change of circumstances that would increase their entitlement after a session report has been submitted.
Withholding
Services Australia withholds 5% of a family's CCS. If a family receives too much CCS, the withholdings that have been set aside will reduce what they owe at the end of the financial year.
Families can change their withholding percentage up to twice a year using their Centrelink online account through myGov. If families want to change it more than this, they’ll need to call the Families line.
Overpayments
Sometimes, you may receive more CCS than you're entitled to. This is known as an overpayment. If this happens, we’ll use your future CCS payments to pay back the difference.
Learn about overpayments.
Balancing
Services Australia balances CCS payments after each financial year to ensure families are paid the right amount. The balancing process is a matter between families and Services Australia.
Learn about balancing.
Gap fees
From 1 July 2023, families must pay the gap fee using electronic means. Find out more about changes to gap fee payments.
Families who get CCS must make a co-contribution to their child care fees. This is a requirement under Family Assistance Law.
They do this by paying the difference between the provider’s fee and the CCS amount. This is known as the gap fee.
This requirement does not apply to families who receive Additional Child Care Subsidy child wellbeing or grandparent. This is because this subsidy generally covers 100% of the fee charged.
Waiving fees
You may be able to waive gap fees in certain circumstances, such as during a period of emergency or due to COVID-19.
Learn about waiving gap fees during a period of emergency.
Learn about waiving gap fees due to COVID-19.
Third-party payments
There are rules when a third party contributes to a family’s child care fees.
In most cases, the third-party contribution will reduce the family’s CCS amount. There are some exceptions to help disadvantaged and vulnerable children and families.
Learn about the rules when a third-party contributes to gap fees.
Discounts for early childhood workforce
Providers can offer a discounted fee to educators or cooks they employ whose children are enrolled at one of their services. The discount will not affect the employee’s CCS entitlement.
Learn about discounts for the early childhood workforce.
Fee caps
We set a maximum hourly rate of subsidy for each care type.
See the hourly rate cap for each care type.
Reporting fees
It is important that information about fees is available to families.
You must report your current fees in the Child Care Subsidy System. Do this via the PEP or your third-party software.
We publish this information to StartingBlocks.gov.au.
We cannot accept fee reporting by phone or email.
For help see the task card on reporting fees in the PEP or contact your software provider.
You must report:
- current hourly fees before CCS, discounts or reductions, or
- current session fees before CCS, discounts or reductions, and
- any changes to fees, within 14 days of the change.
This is a requirement under Family Assistance Law. We may take compliance action if you fail to meet your obligations.
Statements of entitlement
You must provide a statement of entitlement to families who get CCS at your service every fortnight.
This is a requirement under Family Assistance Law. We may take compliance action if you fail to meet your obligations.
The statement of entitlement helps families understand the relationship between:
- their CCS amount
- the amount withheld, and
- the fee you charge.
The below table outlines what a statement of entitlement must include.
You can only issue a statement of entitlement for care that has already occurred. You cannot issue them in advance based on estimates.
When and how you invoice families is an individual business decision. We don’t recommend invoicing in advance based on estimates as a family’s CCS entitlement can vary for a range of reasons.
| Details | What to include |
|---|---|
| Statement details |
|
| Provider and service details |
|
| Sessions of care |
|
| Fees |
|
| Fee reduction amounts |
|
| Actual attendance |
|