Planning Childcare for 2027? Understanding CCS and Your Care Costs

Planning childcare for 2027 often starts with two big questions:

How much will childcare cost?

And:

How much will the Child Care Subsidy actually reduce that cost?

If you are new to childcare, the Australian Government’s Child Care Subsidy (CCS) can initially seem complicated. There are percentages, income thresholds, subsidised hours, hourly rate caps and childcare fees to consider.

The good news is that you do not need to become a CCS expert to start planning.

In simple terms, eligible families receive a government subsidy towards the cost of approved childcare. The subsidy is generally paid directly to the childcare provider, reducing the amount the family needs to pay. The remaining amount is commonly referred to as the gap fee or out-of-pocket childcare cost.

For families planning childcare in 2027, understanding a few key CCS rules now can make it much easier to estimate your budget, compare childcare fees and decide how many days of care will work for your family.

If you want a quick estimate of your CCS, complete our calculator now. 

The Quick Answer: How Does CCS Reduce Childcare Costs?

Your childcare provider sets its own fees.

If you are eligible for CCS, the Australian Government subsidises part of those fees, up to a government-set hourly limit.

Your actual childcare cost after CCS therefore depends mainly on:

• your family’s CCS percentage
• your childcare provider’s fee
• the length of the childcare session
• the applicable CCS hourly rate cap
• how many subsidised hours you are entitled to
• whether you have more than one eligible young child in care
• any other fee relief that may apply.

Services Australia calculates your CCS entitlement based on your circumstances and pays the subsidy directly to your approved childcare service.

That is why two families attending the same childcare centre for the same number of days can have different out-of-pocket costs.

What Is the Child Care Subsidy?

The Child Care Subsidy, or CCS, is Australian Government assistance designed to help eligible families with the cost of approved childcare.

CCS can apply to approved forms of care including Centre Based Day Care, Family Day Care, Outside School Hours Care and In Home Care.

Most Young Academics families attending long day care will fall under Centre Based Day Care for CCS purposes.

Rather than receiving the subsidy as cash and then paying the full childcare bill yourself, CCS is generally paid directly to the childcare provider to reduce your fees.

For example, if your childcare fee is $150 for the day and CCS contributes $120 towards that session, the difference is $30 before taking into account matters such as the standard CCS withholding.

The important point is:

Your childcare fee and your out-of-pocket childcare cost are not necessarily the same thing.

Who Can Get Child Care Subsidy?

According to Services Australia, to be eligible for CCS you generally need to:

• care for your child at least 2 nights per fortnight or have at least 14% care
• be responsible for paying childcare fees
• use an approved childcare service
• meet Australian residence requirements.

Your child must also meet immunisation requirements and generally must not be attending primary school unless an exemption applies.

Eligibility and the amount you receive are ultimately determined by Services Australia, not your childcare provider.

How Much CCS Can Families Get in 2027?

This is where the timing matters.

If your child starts care between January and June 2027, the current 2026–27 CCS rates will apply.

The Australian Government adjusts CCS income thresholds and hourly rate caps annually. The rates applying from July 2027 onwards have not yet been published as at September 2026.

So families planning care for the second half of 2027 should check the latest figures once they are released rather than assuming today’s thresholds will remain unchanged.

For the 2026–27 financial year, the standard CCS rates are:

For families earning more than $88,520 and below $538,520, the standard CCS percentage reduces by 1 percentage point for every $5,000 of family income above $88,520.

This means a CCS percentage is not simply determined by what one parent earns.

Services Australia uses your family income estimate.

What Income Does Centrelink Use for CCS?

One common mistake is assuming CCS is calculated purely from your combined salaries before tax.

Services Australia actually uses your family’s estimated adjusted taxable income for the financial year.

Depending on your circumstances, adjusted taxable income can include items such as:

• taxable income
• reportable fringe benefits
• reportable superannuation contributions
• net investment losses
• certain tax-free pensions or benefits
• foreign income.

If you have a partner, their income is generally included as well.

When estimating your income for CCS, you need to consider your income for the whole financial year, including income already earned and what you expect to earn for the remainder of the year.

That can include things such as bonuses, overtime, a return to work following parental leave, self-employment income or a change in working hours.

This is particularly relevant for families starting childcare after parental leave.

If one parent returns to work during 2027, your family’s income may look quite different from the previous financial year.

Why Keeping Your Income Estimate Up to Date Matters

Your initial CCS payment is based on an estimate of your family’s income.

After the financial year ends, Services Australia compares that estimate with your family’s actual adjusted taxable income and balances your CCS.

If your actual income was higher than you estimated, you may have received too much CCS and could have an overpayment.

If your actual income was lower and you did not receive enough CCS, Services Australia may pay you an outstanding amount when your payment is balanced.

So if your circumstances change significantly during the year, updating your family income estimate through Centrelink can help reduce surprises later.

What Is the 3 Day Guarantee?

This is one of the most important recent CCS changes for families planning childcare for 2027.

From 5 January 2026, the previous CCS activity test was replaced by the 3 Day Guarantee.

Under the new rules, all CCS-eligible families can access at least:

72 hours of subsidised childcare per child, per fortnight.

The Australian Government describes this as equivalent to approximately three days of subsidised care per week.

Importantly, families can receive these 72 subsidised hours regardless of their level of work, study or other recognised participation, provided they otherwise meet the eligibility requirements for CCS.

For families who previously found the activity test difficult to navigate, this is a significant simplification.

Does the 3 Day Guarantee Mean Childcare Is Free for Three Days?

No. This is an important distinction.

The 3 Day Guarantee guarantees eligible families access to at least 72 hours that can attract CCS.

It does not mean the government pays 100% of your childcare fees.

Your CCS percentage and the hourly rate cap still apply, so most families will continue to pay a gap fee.

It also does not guarantee that your preferred childcare centre has a vacancy.

The Australian Government specifically states that families still need to secure a place with their chosen childcare provider.

This is particularly important when planning childcare for 2027.

You may be entitled to subsidised childcare hours, but you still need to secure the actual enrolment and the weekdays your family needs.

Who Can Get 100 Hours of Subsidised Childcare?

Some families can receive up to 100 hours of subsidised care per child each fortnight.

Under the current rules, this may apply where:

• each parent in a couple undertakes more than 48 hours of recognised participation per fortnight
• a single parent undertakes more than 48 hours of recognised participation
• the family cares for an Aboriginal and/or Torres Strait Islander child
• an approved exemption applies
• certain Additional Child Care Subsidy circumstances apply.

Where both parents’ participation is relevant, Services Australia generally uses the lower participation level when determining subsidised hours.

If you are unsure whether your family qualifies for 72 or 100 hours, check your Centrelink CCS assessment.

What Is the CCS Hourly Rate Cap?

This is probably the most misunderstood part of childcare costs and CCS.

Your CCS percentage does not always apply to the entire childcare fee.

The Australian Government sets an hourly rate cap.

Your CCS percentage is applied to the lower of:

your childcare service’s hourly fee

or

the applicable government hourly rate cap.

For Centre Based Day Care in 2026–27, the hourly rate cap is:

These caps are indexed periodically and the amount applying from July 2027 may therefore differ.

Why the Hourly Cap Changes Your Childcare Cost After CCS

Imagine a family has an 80% CCS rate.

Their child attends a 10-hour session.

Example A: The childcare fee is below the hourly cap

The centre charges:

$150 for a 10-hour session

That equals:

$15 per hour

Because $15 is below the current $15.19 Centre Based Day Care cap for a below-school-age child, the family’s 80% CCS percentage can be applied to the $150 fee.

For a simple illustration:

• Childcare fee: $150
• CCS percentage: 80%
• Indicative CCS entitlement: $120
• Indicative family contribution: $30

This example is simplified and is before the standard CCS withholding described below.

Example B: The childcare fee is above the hourly cap

Now imagine the centre charges:

$170 for a 10-hour session

That equals:

$17 per hour

The government’s current hourly cap is $15.19, so CCS would be calculated using the lower capped amount rather than the full $17 hourly fee.

Ten hours at the $15.19 cap equals:

$151.90

At an 80% CCS rate:

80% of $151.90 = $121.52

The indicative family contribution would therefore be:

$170 − $121.52 = $48.48

Again, this is a simplified illustration before withholding.

This is why knowing your CCS percentage alone is not enough to calculate your childcare cost after CCS.

The childcare fee and hourly rate cap also matter.

Why Does Centrelink Withhold 5% of CCS?

Services Australia generally withholds 5% of a family’s CCS entitlement.

This is designed to reduce the risk of families being overpaid during the year and later receiving a debt when CCS is balanced.

For example, if your calculated CCS entitlement for a session were $120, the standard 5% withholding would be $6.

Your provider would initially receive approximately $114 in CCS for that session rather than the full $120.

That means the amount you pay your childcare service during the year may be slightly higher than the simple:

fee minus CCS percentage

calculation suggests.

At balancing time, the withheld amount is taken into account.

Services Australia allows families to change their withholding percentage online up to two times per financial year, although families should consider their circumstances carefully before doing so.

What Is the Gap Fee?

Your gap fee is essentially the difference between the childcare fees you are responsible for and the CCS paid towards those fees.

Services Australia also describes the gap fee as the family’s out-of-pocket cost or co-contribution.

This is the amount families generally need to budget for when comparing childcare options.

So when a parent asks:

“What does childcare cost?”

there are really two different questions:

1. What is the centre’s childcare fee?
2. What will my childcare cost be after CCS?

The answers can be very different.

Can Families With More Than One Child Get Higher CCS?

Potentially, yes.

Families with more than one CCS-eligible child aged 5 or under in care may receive a higher CCS rate for their second and younger eligible children.

The eldest eligible child aged 5 or under is usually treated as the standard rate child.

The second and younger eligible children may receive the higher rate.

For 2026–27, the higher rates include:

Within the reducing bands, the higher-child rate falls by 1 percentage point for every $3,000 of income.

The rules around which child receives the higher percentage can depend on your family’s circumstances, so your Services Australia assessment remains the authoritative source.

Do Siblings Need to Attend the Same Childcare Centre?

The Australian Government states that siblings do not have to attend the same childcare service for the higher CCS rate for eligible second and younger children to apply.

Again, eligibility depends on your family’s circumstances rather than simply the childcare provider you choose.

How Many Childcare Days Can CCS Cover?

Although CCS is calculated in hours per fortnight, it is easier for families to think about how many days of care they need.

Under the 3 Day Guarantee, eligible families receive at least 72 subsidised hours per child, per fortnight, while some families qualify for 100 hours.

At Young Academics, session lengths can be structured to help families make the most of their CCS entitlement. For example:

• 72 hours: can support 3 days per week on 11-hour sessions, or 4 days per week on 9-hour sessions
• 100 hours: can support up to 5 days per week on 10-hour sessions

The key is to check whether your family is eligible for 72 or 100 hours, then speak with our Enrolments Team about the number of days you need. We can help explain the available session options and how they align with your CCS entitlement.

Your CCS percentage, hourly rate cap and childcare fees will still determine your final out-of-pocket cost.

How Can I Estimate My Childcare Cost After CCS?

The easiest way is to use the Child Care Subsidy Calculator to get an indicative estimate of your out-of-pocket childcare fees based on your circumstances.

If you want to calculate this yourself you will need to know four things:

1. Your centre’s childcare fee

Childcare providers set their own fees. The Australian Government does not set childcare fees.

2. Your CCS percentage

You can view your assessed percentage through your Centrelink account.

3. Your subsidised hours

Check whether your family receives 72 or 100 hours of subsidised care each fortnight.

4. The applicable hourly rate cap

For a below-school-age child attending Centre Based Day Care, the current 2026–27 cap is $15.19 per hour.

A calculator is useful for planning, but it should always be treated as an estimate rather than an official CCS assessment. Services Australia determines your actual entitlement.

Why Your Actual Weekly Childcare Cost May Change

Even after you have estimated your childcare costs, your actual amount can change.

Common reasons include:

• your family income changes
• your CCS percentage changes
• your subsidised hours change
• your childcare days change
• your child moves into another age or CCS category
• you become eligible or cease to be eligible for the higher sibling rate
• government CCS thresholds or rate caps are indexed
• other fee relief applies.

This is why families planning childcare for 2027 should consider CCS an important part of their household budget, but not treat an early estimate as a guaranteed fixed fee for the entire year.

What Happens When My Child Is Absent?

Another useful cost consideration is how CCS treats childcare absences.

Services Australia currently allows up to 42 allowable absence days per child per financial year where CCS may still be paid if the family is charged for the session.

These allowable absences can generally be used for any reason without evidence.

Additional absence days may be available in specific circumstances, such as illness, subject to the relevant requirements.

However, there are special rules around absences before a child’s first physical attendance and after their final attendance.

In most circumstances, CCS will not cover fees charged simply to reserve a childcare place before the child has physically begun attending.

That is worth knowing when planning an enrolment commencement date.

When Should I Apply for CCS for 2027?

You claim CCS through Centrelink via myGov.

Services Australia states that a CCS claim can currently be backdated no more than 28 days before the date the claim is submitted, subject to eligibility.

However, relying on backdating is not the ideal childcare-planning strategy.

If you know your child is starting care, it makes sense to organise your CCS claim early enough to allow your details to be assessed and your enrolment confirmed.

Once your childcare provider submits your child’s enrolment details, you may also need to confirm the enrolment through your Centrelink account before CCS can be paid.

A useful 2027 checklist is therefore:

1. Secure your childcare place.
2. Confirm your intended start date and days.
3. Check your CCS eligibility.
4. Lodge or update your CCS claim.
5. Confirm your childcare enrolment through Centrelink when required.
6. Check your CCS percentage and subsidised hours.
7. Estimate your out-of-pocket childcare costs.

What About NSW Preschool Fee Relief in 2027?

For NSW families, CCS may not be the only government assistance relevant to early childhood education costs.

The NSW Government has announced that a new Fee Relief for Long Day Care program will replace the existing Start Strong for Long Day Care program from 2027.

The NSW Government has also confirmed that eligible families receiving this fee relief can continue to receive the Australian Government’s CCS.

Because the 2027 program is changing and detailed individual fee-relief arrangements may continue to be updated, families should check the latest NSW Government guidance and speak with their childcare provider about what applies to their child.

This assistance is separate from CCS.

What Is Additional Child Care Subsidy?

Some families facing particular circumstances may qualify for Additional Child Care Subsidy (ACCS) on top of regular CCS.

Services Australia identifies several ACCS categories, including support for:

• eligible grandparents receiving certain income support
• families transitioning from certain income-support payments to work
• families experiencing temporary financial hardship
• children requiring support for their safety and wellbeing.

ACCS has its own eligibility and payment rules, so families who believe they may qualify should refer directly to Services Australia.

Childcare Fees: Compare What Is Included, Not Just the Headline Number

When budgeting for childcare, it is tempting to compare centres based entirely on the daily fee. That number matters but families should also understand what is included in the fee and whether there are additional costs they may need to budget for.

When comparing childcare fees, ask questions such as:

• Are meals and snacks included?
• Are nappies or other essentials included?
• Are educational programs included?
• Are incursions or activities charged separately?
• Are there additional administration or enrolment charges?
• How are public holidays and absences charged?
• Is preschool fee relief available where relevant?
• What will my estimated cost be after CCS?

The most useful comparison is ultimately:

What will this childcare arrangement cost my family after all applicable subsidies and fee relief?

Not simply:

Which centre has the lowest advertised daily fee?

Planning Childcare for 2027: Start With Your Actual Family Budget

If you already know you will need childcare next year, you do not need to wait until your return-to-work date is approaching to understand your potential costs.

Start by working out: How many days would we ideally like?

Then: What CCS percentage and subsidised hours are we likely to receive?

And finally: What would our approximate weekly out-of-pocket cost be at our preferred centre?

The Young Academics CCS Calculator can help you estimate your potential fees, while the Young Academics Enrolments Team can discuss individual centre fees, available days and 2027 enrolment options with you.

If you are still deciding on a location, you can also find your nearest Young Academics centre and compare the options that best suit your family’s routine.

Secure Your 2027 Childcare Place Early

Understanding childcare costs and CCS is one part of planning for 2027. Securing the childcare arrangement you actually want is the other.

The new 3 Day Guarantee means all CCS-eligible families can access at least 72 hours of subsidised care per fortnight. It does not, however, guarantee that three days will be available at your preferred centre.

If you already know you will require childcare in 2027, contacting our Enrolments Team early gives you a better opportunity to discuss:

• your preferred centre
• your anticipated start date
• the days you need
• centre fees
• your potential CCS costs
• next steps for enrolment.

You can contact the Young Academics Enrolments Team to start planning your 2027 childcare place.

There is no need to have every detail finalised before making an enquiry. The aim is simply to understand your options early enough that your family can make an informed decision.

Frequently Asked Questions About CCS and Childcare Costs