Understanding the childcare subsidies in NSW

Understanding the childcare subsidies available to families in Australia can prove difficult with all the different websites offering up information plus. So the team at Reggio Emilia have broken down exactly what financial assistance is available from the Child Care Subsidy also known as the CCS.


CCS Components


The amount of CCS you receive is based on three components. These are:

  1. The combined family income – typically the sum of assessable income of the parents
  2. Your level of activity – the number of hours spent on both paid and unpaid work
  3. The childcare’s hourly rate


When it comes to the calculation itself and the exact value, feel free to give Reggio Emilia a call on 02 9811 2222


For now, however, let’s take a look at each component in detail.


Component Two: Combined family income


The combined family income is the component that determines the percentage of CCS you’re entitled to. To make things easier, we’ve created the table below to quickly summarise the percentages based on different family incomes.


Family income Child Care Subsidy percentage
$0 to $69,390 85%
More than $69,390 to below $174,390 Between 85% and 50.

The percentage goes down by 1% for every $3,000 of income your family earns

$174,390 to below $253,680 50%
$253,680 to below $343,680 Between 50% and 20%.

The percentage goes down by 1% for every $3,000 of income your family earns

$343,680 to below $353,680 20%
$353,680 or more Nil


For many families, their total income will change over time. This could be through pay-rises, changes in rental income, maternity leave or the unfortunate case of becoming unemployed. So whenever there is a change in income, you’ll need to contact Centrelink and provide them with an update.


Component Two: Activity Level

For many parents, this is usually the most difficult to understand due to difficulties calculating the hours and the number of exemptions to the Activity Test.

To keep it simple, CCS takes into account how the family (the parents in particular) contribute to the economy through activity. This activity includes paid and unpaid activity and is calculated by looking at the parent with the lowest number of hours per fortnight.

Activity level* Hours subsidised*
Less than 8 hours 0 hours if you earn above $68,163

24 hours if you earn $68,163 or below

More than 8 to 16 hours 36 hours
More than 16 to 48 hours 72 hours
More than 48 hours 100 hours

*The above figures are per fortnight.


Is there a list of ‘activities’?

As mentioned above, an activity can be both paid and unpaid. The government has fortunately provided a non-exhaustive list to assist with the calculation. You can find this below.

  • Paid work (including all-time between drop off at the centre and pick up at centre, commute time, lunch breaks etc)
  • All types of work across all jobs/employers
  • Authorised leave (e.g. maternity leave, long service leave, annual leave)
  • Unpaid leave of up to 6 months
  • Unpaid work in a family business
  • Time spent setting up a business that has not yet started to operate
  • Training and study (including additional study outside scheduled hours, holiday and non-class periods)
  • Work experience/internships (paid or unpaid)
  • Volunteering
  • Looking for work (including contacting employers, preparing resumes and letters of application, preparing for and attending job interviews etc)

What are the exemptions?

There are a number of exemptions to the activity test and these are best discussed with one of our friendly staff on 02 9811 2222. 

Some examples of exemptions include four year preschool programs. If your child is attending an early education program at a centre 2 years before their first year of school, they area entitled to 36 hours of care irrespective of the parent’s activity.

Furthermore both low income families and those on income support will automatically qualify for 24 hours and 36 hours respectively per fortnight plus more depending on other recognised activities. 

There are a few other exemptions but as mentioned above, it’s best you discuss your individual circumstances with one of our staff on 02 9811 2222.

The Provider’s Hourly Rate

The final factor that is taken into account when determining your CCS is the hourly rate charged by your child care provider. The CCS amount is calculated based on whichever of the following is the lowest:

  • An Hourly Rate Cap (HRC) of $12.20 per hour
  • The Actual Hourly Fee


Subsidy Changes and Getting the Most From the CCS

2020 has been a year filled with disruption and confusion. For many parents, it has been extra difficult and keeping track of CCS components, how they’re recognised and the impact of COVID on CCS might have the last thing on your mind.

The biggest impacts of 2020 have already passed. In particular, before 4 October 2020, eligible families that could demonstrate a drop in activity levels could access up to 100 hours per child per fortnight. However, now the regular CCS is back in action with the gap fee payable.

If you are unsure about the changes and how they affect you and your family, we strongly recommend giving us a call. Our staff are professionally trained and ‘in the loop’ when it comes to the CCS.


A Summary

To summarise the above, when it comes to the CCS, there are three things that are taken into account. The first is your combined income and this is includes income generated from both your employer/business AND investment income (for example, dividends and rental income). The second is the activity level of the least active parent. This could include work hours, volunteer work and leave. Finally, the final component is the childcare’s hourly rate.

To get an accurate calculation and a better understanding of what you’re eligible to and if your circumstances attract exemptions, please contact the Reggio Emilia team on 02 9891 2222.

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