Child Care Subsidy explained — a simple guide for Berwick families

Child Care Subsidy — or CCS — is the Federal Government's main mechanism for making approved childcare affordable for Australian families. For families in Berwick, Narre Warren South, Officer, Clyde North, Cranbourne North, Hampton Park, Hallam, Beaconsfield and across the Casey LGA, CCS is the single biggest factor in what you actually pay for childcare after you've chosen a centre. And yet a surprising number of families either don't claim it, or don't realise they're entitled to more than they think. This guide cuts through the jargon.

What is Child Care Subsidy?

CCS is a means-tested, activity-tested government payment that reduces the cost of approved childcare. It does not come to you as cash — the subsidy is paid directly to your childcare provider (in our case, My Stars Berwick), who then charges you only the 'gap' between the full fee and the subsidy amount. The subsidy is calculated as a percentage of the hourly rate cap set by the government, based on your family's income and the number of hours of approved activity you undertake each fortnight.

The two tests: income and activity

CCS eligibility rests on two things. The income test determines your subsidy percentage — families below a certain combined annual income receive a higher percentage subsidy, and that percentage tapers as income rises. The activity test determines how many subsidised hours you are entitled to each fortnight — this is based on the combined number of hours per fortnight that you and your partner work, study, train, volunteer, or perform other approved activities.

• Lower combined income → higher CCS percentage (up to 90% for lower-income families)
• Higher combined income → lower CCS percentage (phases out at higher income levels)
• 24–48 hours of approved activity per fortnight → up to 72 subsidised hours
• 48+ hours of approved activity per fortnight → up to 100 subsidised hours
• Less than 8 hours activity per fortnight → limited to 24 subsidised hours (with exceptions)
• Single parents on income support → generally qualify at higher rates

How to claim CCS

1. Create or log in to your myGov account and link it to Centrelink
2. Apply for CCS through the Centrelink section of myGov
3. Provide your family's income estimate for the financial year
4. Confirm your approved activity hours (work, study, training)
5. Provide your child's Customer Reference Number (CRN) — if your child doesn't have one, you apply through myGov
6. Once approved, Centrelink pays the subsidy directly to My Stars Berwick on your behalf
7. You pay only the gap — typically weekly via direct debit

CCS and Free Kinder — how they combine

For children aged 3 or 4 who are eligible for Victoria's Free Kinder program, CCS and Free Kinder work together. Free Kinder covers the funded kindergarten hours at no cost — CCS then applies to any additional hours beyond the Free Kinder allocation. For families in Officer, Narre Warren South and Cranbourne North whose children attend full day care (e.g. 45 hours per week), the combination of Free Kinder and CCS can bring the out-of-pocket cost down very significantly.

Common CCS questions from Casey region families

What if my income changes during the year?

CCS is calculated on your estimated annual income, then balanced against your actual income at tax time. If you underestimate and your real income is higher, you may owe money back at the end of the financial year. If you overestimate, you'll receive a top-up. It is always better to update your income estimate promptly through myGov if your situation changes — returning to work after parental leave is a very common trigger for this.

Does CCS apply to all childcare centres?

CCS applies to approved childcare services only. My Stars Berwick is a fully approved provider, so CCS applies to all hours your child attends. Informal arrangements (a private nanny, family day care that isn't registered) generally do not qualify.