Last Updated on May 31, 2019

These are the childcare subsidies available in 2019

If you have children in childcare, you may qualify for a government subsidy. From 2 July 2018, the federal government streamlined the childcare subsidies into a new child care package.

The child care package is made up of the Child Care Subsidy and Child Care Safety Net, which includes the Additional Child Care Subsidy. The new package replaced the previous child care system and any associated benefits, like the Child Care Benefit and Child Care Rebate.

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Child Care Subsidy

The Child Care Subsidy is means-tested and designed to provide more financial support to low- and middle-income families. The amount of the subsidy is determined by the outcome of a three-step activity test, combined family income, and childcare service type.

Recognised activities include, but are not limited to:

  • Paid work
  • Volunteer work
  • Work-related study
  • Unpaid internships or work experience

In two-parent families, both parents are subject to the activity test. The number of subsidised hours are decided by the parent with the lowest entitlement.

Activity Test

Correct at the time of writing (May 2019)

Step Activity hours per fortnight Maximum subsidised hours per child
1 8 to 16 36
2 17 to 48 72
3 49+ 100

Activity test exemptions do apply to those who are unable to meet the activity test criteria, such as parents with a disability or carers.

Combined family income is also considered when determining the Child Care Subsidy. There is no annual subsidy cap for families who earn $186,958 or less per year. Families who earn more than $186,958 and less than $351,248 are subject to a yearly subsidy cap of $10,190 per child.

The subsidy will contribute to whichever is lower: the percentage of child care fees or the relevant hourly rate cap. The below tables show the rate of subsidy as it relates to income, and the maximum hourly rate cap by service type.

Figures are based on 2018-19 and are correct as of May 2019.

Income-based subsidy rate (2018-19)

Correct at the time of writing (May 2019)

Combined family income Rate of subsidy
Up to $66,958 85%
$66,959 through $171,957 Gradual reduction to 50%
$171,958 through $251,247 50%
$251,248 through $341,247 Gradual reduction to 20%
$341,248 through $351,247 20%
$351,248+ 0%

Child Care Subsidy hourly rate caps (2018-19)

Correct at the time of writing (May 2019)

Child care service type Maximum hourly rate cap
Outside school hours (before/after/vacation) $10.29
Family day care $10.90
Centre-based day care $11.77
In home care $32.00 per family

To estimate your entitlement for the Child Care Subsidy, use the Department of Human Services Payment and Service Finder. The subsidy is paid directly to child care providers.

To apply for the Child Care Subsidy, your children must be 13 or under, not attending secondary school (some exceptions apply), and meet immunisation requirements. In a two-parent family, both parents must meet activity requirements or be exempt. This refers to the hours spent working or studying.

Parents can apply for the subsidy through their online Centrelink account on myGov. Once your application has been assessed, you’ll receive notification of the outcome either by letter or through your myGov inbox. The notification will let you know the following:

  • Child’s name
  • Subsidy type
  • Subsidy percentage
  • Subsidised hours per fortnight
  • Withholding amount
  • Annual cap

You can get a maximum of 100 hours of subsidised care per fortnight, per child.

Child Care Safety Net

The Child Care Safety Net was rolled out in July 2016 and is focused on supporting vulnerable families. It is made up of three components:

  1. Additional Child Care Subsidy
  2. Community Child Care Fund
  3. Inclusion Support Programme

The Community Child Care Fund and Inclusion Support Programme are geared towards child care service providers, while the Additional Child Care Subsidy is for families.

The Child Care Safety Net also includes subsidised care for low income families who earn $66,958 or less per year and do not meet the activity test. These families can get 24 hours of subsidised child care per child each fortnight.

Additional Child Care Subsidy

Families in need of extra financial assistance may be eligible for the Additional Child Care Subsidy. There are four categories for this subsidy. Families can apply through their online Centrelink account or in person at a Centrelink office.

1. Additional Child Care Subsidy — Child Wellbeing

This subsidy helps families who need practical help to support their children’s safety and wellbeing. The subsidy is equal to the fee charged, up to 120% of the Child Care Subsidy hourly rate cap for up to 100 hours every two weeks, for a maximum of six weeks. The activity test does not apply.

Eligibility can be determined by talking to your child care provider.

2. Additional Child Care Subsidy — Grandparents

This subsidy also provides up to 100 hours of subsidised care per fortnight. It is available to grandparents who receive income support, are the principal carer (65% or greater responsibilities), and have autonomy over regular decisions pertaining to the child’s welfare. Eligible grandparents do not have to pass the activity test.

3. Additional Child Care Subsidy — Temporary Financial Hardship

A short-term subsidy (up to 13 weeks per event) is available for families who are experiencing temporary financial hardship. It is a subsidy equal to the fee charged, up to 120% of the hourly rate cap, for up to 100 hours every two weeks. The activity test does not apply.

4. Additional Child Care Subsidy — Transition to Work

The Transition to Work subsidy provides 95% of the fee charged up to 95% of the hourly rate cap, for up to 12 weeks after a parent gains employment and stops receiving income support payments. The activity test does apply.

Families who receive one of the following may be eligible:

  • Youth Allowance
  • Disability Support Pension
  • Parenting Payment
  • Newstart Allowance

Individuals with an employment pathway plan (Job Plan) in effect may also be eligible.

Looking for child care? Visit Childcare Comparison to find available childcare centres in your area.