Families who receive Child Care Subsidy (CCS) must make a co-contribution to their early childhood education and care (ECEC) fees. They do this by paying the gap fee. There are specific rules when a third party contributes to discount a family’s child care fees.
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From 7 July 2025, you must include information on prescribed third-party payments when submitting and updating session reports. Reporting other third-party payments and discounts will be voluntary.
What are the rules?
There are different rules that apply when a third party or provider contributes to a family’s child care fees.
This is because there are:
- prescribed discounts
- other third-party payments and discounts.
Prescribed discounts are applied to a family’s gap fee after CCS has been calculated. This reduces or removes a family’s co-contribution. They are prescribed under Family Assistance Law (FAL).
Other third-party payments and discounts are applied to a family’s full session fee before CCS has been calculated. These are not covered under FAL.
Prescribed discounts
Prescribed discounts allow third parties or providers to contribute to the gap fee without reducing the family’s CCS entitlement. This can reduce or remove the gap fee. These discounts provide extra support for families.
Prescribed discounts include:
- prescribed third-party payments
- discounted care for early childhood workforce
- provider discounts for a period of emergency.
State or territory government payments
State and territory governments may contribute to some or all of a family’s gap fee with no impact on CCS in the following circumstances:
- when they contribute to the gap fee for a disadvantaged or vulnerable child
- when they contribute to the gap fee for a child attending a preschool program at a Centre Based Day Care service under one of the following funding schemes, from 1 January 2023:
Discounted care for early childhood workforce
Providers can offer discounted ECEC to some employees without reducing their CCS.
Find out more about discounted care for early childhood workforce.
Provider discounts for a period of emergency
During a period of emergency, you can waive the gap fee for families without reducing their CCS, if:
- a child does not attend care
- your service is closed as a direct result of the emergency.
Find out more about help in an emergency.
Manage prescribed discounts
You do not need to adjust the total session fee when managing prescribed discounts. This is because prescribed discounts do not impact CCS entitlement.
You must include information on prescribed discounts when submitting and updating session reports.
Read how to manage prescribed discounts.
Other third-party payments and discounts
Third parties and providers can offer discounts that reduce the family's hourly session fee.
Other third-party payments and discounts include:
- provider loyalty discounts or enrolment incentives for families
- provider discounts for administration staff
- fees paid by a family’s employer
- one-off payments from charitable organisations
- fees paid by an Adult Migrant English Program service provider.
Managing other third-party payments and discounts
You must deduct the contribution from the total session fee. The family’s CCS percentage will then be applied to the reduced session fee.
You must record third-party payments in statements of entitlements provided to families.
Including information on a third-party payment or discount when submitting and updating session reports is voluntary.
Read how to manage other third-party payments and discounts.
Financial assistance paid directly to families
A third party may provide financial assistance to a family directly. The family may choose to use this assistance to pay for early childhood education and care. As this support is provided directly to the family, it is not considered in the calculation of CCS.