Returning to work when raising a child can be a challenging time. Here, we help demystify when and how much subsidy you can obtain when you enrol your child into child care.
Australia’s Child Care Subsidy reduces the daily fees payable for eligible child care (including before and aftercare for school-aged children) and is administered by Centrelink. It is initially calculated based on your estimated level of family income for the year, and at the end of the year (after lodgement of your income tax return), an adjustment will be calculated and may be paid to you.
Eligibility Requirements
To be entitled to the subsidy, you or your partner must satisfy the following minimum requirements:
- Care for your child at least two nights per fortnight, or have 14% care
- Are liable for fees for care provided at an approved childcare service, and
- Meet the residency rules.
Your child must also meet:
- Immunisation requirements, and
- Not be attending secondary school unless an exemption applies.
The residency rule requires that you or your partner must be living in Australia and have one of the following:
- Australian citizenship
- A permanent visa
- A Special Category visa
- Certain temporary visa types
Income levels and activity
There are also income and activity tests to determine the amount of the subsidy you are entitled to, and the below table summarises what’s available.
| Your family income | Child Care Subsidy percentage |
| $0 to $70,015 | 85% |
| More than $70,015 to below $175,015 | Between 85% and 50% The percentage goes down by 1% for every $3,000 of income your family earns. |
| $175,015 to below $254,305 | 50% |
| $254,305 to below $344,305 | Between 50% and 20% The percentage goes down by 1% for every $3,000 of income your family earns. |
| $344,305 to below $354,305 | 20% |
| $354,305 or more | 0% |
Your applicable subsidy percentage is applied to the hourly childcare fees you pay up to the hourly rate cap.
There are also limits on how many hours of subsidy you are entitled to, dependent on the activity level of both you and your partner. The number of hours that can be subsidised each fortnight is determined by the activity of the partner with the least hours.
| Activity level each fortnight | Hours of subsidised care each fortnight |
| Less than 8 hours | 0 hours if you earn above $69,390 24 hours if you earn $69,390 or below. |
| More than 8 to 16 hours | 36 hours |
| More than 16 to 48 hours | 72 hours |
| More than 48 hours | 100 hours |
Activities that can count towards your hours include:
- Paid work or being self-employed
- Paid or unpaid leave, including paid or unpaid parental or maternity leave
- Unpaid work in a family business
- Unpaid work experience or unpaid internship
- Actively setting up a business.
- Undertaking an approved course of education or study
- Doing training to improve work skills or employment prospects
- Actively looking for work
- Volunteering
Annual caps
In addition, there is also an annual cap imposed on the total subsidy you can receive each financial year.
Based on the current income thresholds, if your family earns between $190,015 and $354,305, the maximum amount of subsidy that can be received is $10,655 per child.
Please note that a provision of 5% of your calculated subsidy amount is withheld to reduce the likelihood you will need to pay any amount back to Centrelink.
