Explaining the Child Care Subsidy (CCS) rate and entitlement 007-20090908

The rate of CCS a customer is entitled to receive is determined by a number of factors:

• The combined family income
• If the family have more than one child aged 5 or under
• The level of activity of the customer (and partner, if they have one) and any exemptions in place
• The age of the child and the type of child care service they attend

CCS entitlement is calculated as a CCS percentage and the number of hours per fortnight a customer is able to receive a subsidy for.

In general terms, the combined family income determines the CCS percentage. Families who have more than one CCS eligible child aged 5 or under can also receive a higher CCS percentage for one or more of their children. This is known as Higher CCS or multiple child subsidy.

The number of subsidised hours a customer is entitled to is determined by the amount and type of recognised activity the customer (and partner, if they have one) participate in each fortnight. Other factors can affect the number of CCS hours a customer can receive, such as:

• if they are caring for an adult or a child with a disability, or
• if an exemption is in place

Child Care Subsidy is paid directly to a child care service to reduce the out of pocket child care costs a family pays. Any changes to CCS entitlement will impact:

• the amount of CCS Services Australia pays the child care service, and
• the family’s out of pocket child care fees

From 10 July 2023, CCS increased which means most families using child care now get more subsidy.

The maximum amount of CCS increased from 85% to 90% for families earning below the CCS low income threshold (CCS LIT).

Families earning above the CCS LIT and below the CCS higher income threshold (CCS HIT) may get a subsidy starting from 90%. The maximum CCS percentage of 90% decreases by 1% for each $5,000 of income they earn above the CCS LIT.

The income limit for families to be entitled to CCS (CCS HIT) has increased.

Families with income below the higher CCS higher income threshold (HCCS HIT) and more than one child aged 5 or under can still get a higher rate of CCS for one or more of their children. From 10 July 2023, the rates for standard rate children and higher rate children will be calculated using separate income tests.

See the Resources page for a graph showing the relationship between standard and higher CCS rates, and the effect of family income on the CCS percentage.

See Entitlement for Child Care Subsidy (CCS) for more information about how CCS percentages are calculated.

When trying to work out why a customer's CCS percentage or hours of entitlement have changed, check all details in the DOCs and Notes on the record that may point to a rate-affecting change in the customer's circumstances.

An income estimate is one of the main factors that determines a customer's CCS percentage. All CCS customers must provide an income estimate, which should reflect their circumstances for the year for themselves and their partner (if they have one).

The standard CCS percentage payable is on a sliding scale from 90% to 0% depending on the combined family income. Any changes to the combined family income could change the CCS percentage which will also impact the customer's out of pocket expenses and child care fees they pay.

For more information on calculating CCS entitlement, see Entitlement to Child Care Subsidy (CCS).

Note: changes to a families combined income to above the lower income threshold can impact the number of subsidised hours of child care. See Automatic Activity test results.

From 7 March 2022, a higher rate of CCS (Multiple Child Subsidy) was introduced for families with more than one CCS eligible child aged 5 or under.

Families with more than one CCS eligible child in care aged 5 or under may get a higher subsidy for one or more of their children.

The Entitlement table in Customer Summary will:

• identify any children attracting the higher rate of CCS, and
• show any percentage increases

The ‘standard rate child’ is usually the eldest CCS eligible child aged 5 or under. This child will get the Standard CCS rate.

The ‘higher rate child’ is any CCS eligible child in the family younger than the standard rate child. This child will get the Higher CCS rate (Multiple Child Subsidy).

From 10 July 2023, CCS rates for standard rate children and higher rate children are calculated using two separate income tests. As a result, any income estimate updates will impact standard and higher rate child/ren differently.

The maximum CCS rate for a higher rate child is 95%. Higher rate children can get a CCS percentage between 95% and 50%, depending on combined family income.

For more information, see Entitlement for Child Care Subsidy (CCS).

From 11 July 2022, if a child has not used child care (including allowable absences) at least once in the previous 26 week period, they will not be eligible for CCS. This is known as the '26 week rule'.

If a child's CCS is cancelled due to the 26 week rule, the cancellation will apply from the CCS Monday following the 26th week. In some circumstances, it may be more than 26 weeks. The cancellation cannot be retrospectively applied and where a child is the last CCS eligible child of a customer, the customers CCS will cancel.

If a family is entitled to Higher CCS for one or more of their children and one of their children is cancelled because of the 26 week rule:

• their CCS entitlement will be reassessed, and
• any higher CCS rate changes will apply from the next CCS Monday

Customers will need to lodge a new claim for CCS if their child starts attending child care again.

See the Resources page of Cancellation of Child Care Subsidy (CCS) for:

• examples of the 26 week rule, and
• how the 26 weeks are calculated

When claiming CCS, customers must provide a TFN for:

• themselves
• their partner
• former partner, or
• deceased customer (as applicable)

When the customer/partner cannot be matched with the Australian Taxation Office due to the initial link transaction, the Mutual Customer Identification (MCI) screen will show a status of Mismatch.

If a mismatch occurs, CCS may reduce to zero rate. See Mutual Customer Identification (MCI) results for family assistance customer mismatches.

The Activity Test is also a main factor determining CCS entitlement. The number of hours of subsidised care payable depends on the level of recognised activities the customer and their partner (if they have one) engages in each fortnight. A change in the level of participation can have an effect on the number of hours for which a customer must pay full fees.

See Activity test for Child Care Subsidy (CCS).

In certain circumstances, customers will receive an automatic Activity Test result or be eligible for an Activity Test exemption.

If the customer and their partner (if they have one) begins to be, or is no longer qualified for one of the above, their entitlement hours may change. This will depend on their circumstances and what is recorded on the ATD.

See Activity test for Child Care Subsidy (CCS) for details.

Activity test outcomes for Aboriginal and Torres Strait Islander children

From 10 July 2023, Aboriginal and Torres Strait Islander children are entitled to a base level of 36 hours of CCS each fortnight.

Note: it is voluntary for families to advise they are caring for an Aboriginal or Torres Strait Islander child. Evidence is not required and not to be requested under circumstance.

Families may be entitled to more than the base level of 36 hours per fortnight based on their hours of recognised activity or other circumstances.

See Coding Activity Test details for Child Care Subsidy (CCS).

CCS entitlement can continue for up to 6 weeks while the customer is overseas. At the end of this 6 week period the CCS% will drop to zero if the customer has not returned to Australia.

See Family Tax Benefit (FTB), Child Care Subsidy (CCS) and Paid Parental Leave scheme customer/child going overseas.

If a customer has not confirmed their relevant CCS year income by 30 June of the following year:

• 1st deadline provisions will apply, and
• the CCS and Additional Child Care Subsidy (ACCS) (with the exception of ACCS CWB) rate will drop to 0%

This will take effect from the first CCS Monday in the new year. Staff will be able to see in Customer Summary under Entitlement if the customer's CCS and ACCS rate is 0% because of the 1st deadline provisions.

If a customer has not confirmed relevant year income by 30 June of the extended lodgement year:

• 2nd deadline provisions will apply, and
• CCS will cancel

See Reconciliation of Child Care Subsidy.

Children must be 13 years of age or under, and not in secondary school for a customer to receive CCS (unless a school status or age/school status exemption has been applied). A sudden cessation of CCS could mean a child has had a fourteenth birthday or changed education status.

More information on age or school status exemptions and checking education status can be found at Updating school status, and assessing age exemptions for Child Care Subsidy (CCS).

Ongoing CCS for a child will cancel when the child misses certain Immunisation deadlines. Immunisation status must remain up to date. This can be checked as per the instructions in Immunisation requirements for Child Care Subsidy (CCS).

Additional Child Care Subsidy (ACCS) provides extra fee assistance to families and children who are genuinely disadvantaged and facing barriers in accessing affordable child care.

A customer's ACCS being granted or recently stopping will have a noticeable effect on the out of pocket expenses they will be charged by their child care providers.

The Process tab has steps on how to check ACCS status, rates and relevant dates.

CCS can be paid for up to 42 approved absence days (or up to 62 days for the 2019/20 year) for each child for any reason. The absence days per financial year relates to each child, not to each individual claimant. If the customer is reporting an increase in out of pocket child care fees, check that the absences for the relevant child/children have not been exhausted.

See Absences for Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS).

When a child has not attended child care for a continuous period of 14 weeks, the enrolment will automatically be stopped.

The customer remains current on CCS, but no CCS payments can be made as there is no current confirmed enrolment. Check the enrolments and Weekly Subsidy tables to confirm if CCS is not paying for a Child Care service.

More information can be found in Enrolment requirements for Child Care Subsidy (CCS).

If a customer is experiencing unusual hardship or extreme circumstances, they can ask for increased CCS entitlement by way of an Exceptional Circumstances determination.

For customers on both CCS and ACCS, an Exceptional Circumstances determination can allow access to more subsidised hours.

For ACCS customers, a percentage increase can also be requested. Staff should check if EXC determination has come to an end.

See Exceptional circumstances for Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS).

20% of a CCS-only customer's ongoing entitlement may be withheld to recover child care debts (including Child Care Benefit, Child Care Rebate and Child Care Subsidy).

This 20% is in addition to the standard 5% already withheld. If the customer is repaying a child care debt via 20% withholdings, their out-of-pocket child care fees will increase. This information is not reflected in the Child Care Subsidy Entitlement tab in Process Direct.

Check the Debt Management App in Process Direct to see if a withholding arrangement has started.

Note: the entitlement amounts in Session Reports received and Service Payment amounts under the Weekly Subsidy twisty will not be reduced by this withholding amount. The amounts displayed are the customer's full entitlement. When discussing CCS amounts paid to the provider, the Paid Amount in the Repayments tab of the Debt Application must be deducted from this amount.

If CCS is being paid for more than one child, view the details of each child. This is because the total amount of debt repayment for the relevant week may only appear under one of the children, instead of displaying a per child breakdown.

See Table 8 in Recovering Child Care Subsidy (CCS) debts in Process Direct.

If the child care provider has made a change in their fee schedule the amount the customer is expected to pay could vary without anything else changing in the record. For example, a change in child care fees could be associated with a change in enrolment.

If the customer has changed the type of child care service used this will determine the maximum hourly rate cap to which a customer's CCS percentage will be applied.

Types of child care include:

• centre based day care service
• family day care service
• outside school hours care service
• in home care

See Entitlement for Child Care Subsidy (CCS).

If the customer is impacted by a multiple child Customer Reference Number (CRN), the CCS entitlement and/or enrolment may have been completed for the same child using different CRNs. e.g. the multiple CRN. If the CRN does not match between the CCS assessment and enrolment/sessions, CCS is not paid.

A Display on Access DOC will present where a multiple CRN has been identified. This DOC will confirm which CRN should be used.

See Remediating a multiple or intertwined Centrelink Reference Number (CRN) – Families.

CCS family income thresholds, annual cap and hourly rate cap changes are expected to update automatically every July to match Consumer Price Index (CPI) and rate changes.

If indexation has not been paused, the CCS new year rates may impact a customer's CCS entitlement from July each year.