The Australian Government set a clear income limit for the Child Care Subsidy in 2025–26, with payments phasing out completely beyond $533,290. This maximum sets limits on how much funding a family can receive and is part of the government effort to ensure that subsidies reach those who need them most.
How the Subsidy Works
The Child and Child Care Services Subsidy supports families in paying for approved child care services according to annual combined income. Those under \$80,000 are eligible for the highest rate of subsidy at some 90 percent, with the subsidy gradually decreasing by 1 percent for every additional \$5,000 earned through higher means. Those families with an income of \$533,290 and above are not eligible for the subsidy and pay all child care fees out of pocket.
Changes in 2025
Alongside an updated income limit, the government has also updated the hourly rate caps for various kinds of care. The caps have risen marginally with inflation to keep the subsidy relevant amid increasing fees. The only thing families need to pay is the difference between the subsidy and the practitioner’s fees, with the subsidy being the lesser of actual practitioner fees or the capped hourly rate.
Effect on Families
For middle-income families, the CCS remains an essential income support, covering a large portion of child care fees. Yet, nearing the \$533,290 income threshold, families at the higher end will start seeing their subsidy gap further diminished. Those who have more than one child under the age of five will continue enjoying the higher subsidy rate for their younger children, easing both their stress and finances in child care for multiple children.
Planning Ahead
It is critical that families estimate their income projection and report it promptly through MyGov or Centrelink. This timely reporting grooms them against overpayments or consequent debts. Using the CCS calculator assists parents not only in planning for child care but knowing what level of support is realistically expected. Remaining updated with the limits and guidelines will help families to further decide on any foreseeable expense while ensuring they receive the assistance most fitting to them.