BY HEJIRA CONVERY, KINDICARE

OCTOBER 31, 2025

If you’re just starting your childcare search, then you’re probably a bit shocked by how much this education and care will cost!  

Quality childcare doesn’t come cheap, especially when you need lots of hours and days, but the Child Care Subsidy does make things more affordable.  

This Subsidy is paid by the Australian government direct to approved childcare services to reduce the fees that families have to fork out.  

So, when you’re searching for childcare with the free KindiCare App or kindicare.com, make sure you tap a few details into your Child Care Subsidy Settings (in your Profile), to see each service’s estimated fees after your Child Care Subsidy.  

This will help to alleviate a lot of that bill shock, and it’s also comforting to know what the Child Care Subsidy involves.  

So, here are six of your most important questions answered! 

Question 1: How do I get the Child Care Subsidy? 

For starters, you need to meet all the eligibility criteria.  

This means you must: 

• Care for your child at least two nights per fortnight, or have 14% care 

• Use an approved childcare service (which includes centre based day care, family day care and outside school hours care) 

• Be responsible for paying the childcare fees, and 

• Meet certain residence rules.  

Generally speaking, your child needs to be aged 13 or under, and not be at high school, and there are immunisation requirements they have to meet. 

If you can tick all these boxes, then the next step is to make a Child Care Subsidy claim. 

Follow the steps here, and don’t leave things too close to your child’s first day.  

The government will only pay the Child Care Subsidy to your service when your claim has been approved and you’ve confirmed your child’s enrolment. 

So, apply for the Child Care Subsidy as soon as you start thinking about childcare (and at least two or three months before your child’s start date), to make sure you’re not paying full fees when their first day arrives.  

To get the Child Care Subsidy, you and your service must also have a written agreement, which confirms that care will be provided in return for fees; and although this sounds technical, the team will guide you through everything.  

Question 2: How much Child Care Subsidy will I get? 

The Child Care Subsidy isn’t a set dollar amount, like $50, that’s subtracted from your fees.  

Instead, you get a Child Care Subsidy percentage, that’s calculated according to your family’s income.  

This percentage can be anywhere from 90% to 0% (or up to 95% if you have more than one young child in care).

Your Child Care Subsidy percentage is then applied to either the hourly fee charged by your service, or the hourly rate cap for the type of childcare you’re using – whichever is lower.  

This means your childcare choice (e.g. long day care), and your child’s age (e.g. under six), influences your Child Care Subsidy amount, and you will have to pay something for childcare.  

This is called the ‘gap fee’, and it’s the full fee charged by the centre, minus the Subsidy paid by the government.   

Currently, there’s also an activity test (more about this below).

And if it’s hard to get your head around all of the above, that’s totally understandable! 

There are a lot of moving parts, but it helps to use a Child Care Subsidy Calculator; and KindiCare’s Estimated Fee After Subsidy info in each childcare listing is gold!  

Question 3: I’ve been hearing something about a 3 Day Guarantee. What’s this? 

The 3 Day Guarantee is a big change to the Child Care Subsidy that starts soon.  

At the moment, there's an activity test which determines how many hours of subsidised childcare you can get each fortnight, depending on how much work, study or other recognised activity you do.  

This hasn’t made things easy for some families, so the activity test is being scrapped from 5 January 2026 and replaced with the 3 Day Guarantee. 

This means all Child Care Subsidy eligible families will get at least 72 hours of subsidised care per fortnight – which equates to three days per week – and some will get 100 hours.  

Before you get too excited, though, you’ll still need to organise your own childcare place (you’re not guaranteed a spot), and you will still need to pay a gap fee.  

Question 4: Is there any other financial help available for childcare families? 

Yes, there are other payments to help with the costs of care, namely the Additional Child Care Subsidy, Family Tax Benefit and Parenting Payment. 

These payments are means-tested, so if you have a big income they won’t apply, but you can check your family’s possible eligibility for different payments, using Centrelink’s Payment Finder.  

Question 5: Can I get the Child Care Subsidy for preschool, kindergarten or informal childcare, like babysitting and grandparent care? 

No, the government only pays the Child Care Subsidy to approved childcare services, such as long day care, occasional care, family day care and outside school hours care services. 

Although preschool/kindergarten is regulated by the National Quality Framework, it isn’t Child Care Subsidy approved.  

However, there is financial support available.  

The state and territory governments provide funding to make preschool/kindy cheaper or free. 

And if you enrol your child in a preschool/kindy program at a long day care, you can get the Child Care Subsidy for the care that ‘wraps around’ the preschool/kindy program.  

Plenty of people would also like to see an expansion of the Child Care Subsidy to cover other kinds of childcare, like grandparent care, but this is currently a wish, not a reality.  

Question 6: Once I’m set up for the Child Care Subsidy, is that all I need to do? 

Not quite!  

For one thing, it’s important to let Centrelink know about any changes to your circumstances, like a pay rise or a new address, to make sure you’re getting the right Child Care Subsidy amount (no-one wants a debt!) 

You’ll also need to tell your service if your child is going to be away on a day they’d normally be at care, so the absence can be recorded and your Child Care Subsidy paid correctly.  

And at tax time, you’ll need to confirm your family income so the government can check you got the right amount of Child Care Subsidy (they call this ‘balancing’).  

The good news is that none of this is too onerous, and there is help at hand.  

The staff at your approved childcare service will be happy to answer Child Care Subsidy questions, provide prompts, and make things as painless as possible. 

And even if you do end up waiting 87 minutes to speak with someone at Centrelink, the reward of subsidised fees is definitely worth it!