2026–27 CCS Hourly Rate Caps and Income Thresholds: What Changes from 6 July

Each financial year, the Child Care Subsidy (CCS) settings shift. The hourly rate caps and the family income thresholds are reviewed and adjusted, and the new figures take effect from the start of the CCS year. For 2026-27, the updated CCS hourly rate caps and family income thresholds apply from 6 July 2026.

If you run a service, this is not a back-office detail. It affects what families pay out of pocket, how you set your fees, and how confidently you can talk to enrolling families. A little planning now saves a flood of questions later.

What the CCS hourly rate caps are (in concept)

The hourly rate cap is the maximum hourly fee that CCS will help pay towards, set separately for each care type (for example centre-based day care, family day care, and outside school hours care). It is not a limit on what you are allowed to charge. It is the ceiling the subsidy is calculated against.

If your hourly fee sits at or below the cap for your care type, the subsidy is worked out on your actual fee. If your fee sits above the cap, the subsidy is worked out on the cap, and the family covers the difference on top of their normal gap. That single mechanic is why the cap matters so much to affordability and to your enrolment conversations.

This guide does not list the dollar figures, because the caps and thresholds change every year. For the current 2026-27 amounts, always check the Department of Education. Current as at June 2026.

What the family income thresholds are (in concept)

The income thresholds determine the percentage of subsidy a family receives. In broad terms, families on lower incomes receive a higher subsidy percentage, and the percentage tapers as combined family income rises through a series of bands.

The thresholds set where those bands begin and end. When they move, a family can land in a different band even if their income has not changed much, which can nudge their out-of-pocket cost up or down. The activity test and other factors also shape entitlement, so families should confirm their own situation through Services Australia rather than rely on a general estimate.

Why both are adjusted every year

Both the hourly rate caps and the income thresholds are adjusted annually based on the Consumer Price Index (CPI). The intent is to keep the settings roughly in step with the cost of living, so the value of the subsidy does not quietly erode over time.

The practical takeaway is simple: assume the numbers are different this year, and do not reuse last year’s figures in your modelling or your family communications. Pull the current ones from the source each year.

What operators should do

A few steps make the changeover smooth.

Review your fees and your viability against the new caps. If your hourly fee sits above the cap for your care type, families wear the full difference, which can affect both affordability and your competitiveness. Run the numbers properly before you decide whether to hold, adjust, or restructure your fees. Our how to set childcare fees guide walks through the principles, and a performance audit is the right tool when you want a clear-eyed read on margin and occupancy.

Update your family communications. Refresh fee schedules, enrolment packs, and your website with the current financial year settings, and prepare a short, plain-language note for existing families explaining that subsidy settings have changed from 6 July. Point them to the official sources for their personal entitlement so you are never in the position of quoting a figure that turns out to be wrong for their circumstances.

If you are still working through CCS approval for a new service, the same settings will apply to your families from day one, so factor them into your projections early. Our how to apply for CCS approval guide covers that pathway.

Allowable absences reset

Allowable absences reset on 1 July 2026. Each child has an annual allocation of absence days that CCS can still be paid for, and that count starts fresh at the beginning of the financial year.

Encourage families to keep an eye on their own balance. They can check their year-to-date absence count through their Centrelink online account via myGov or the Express Plus Centrelink mobile app. A quick reminder from you early in July helps families avoid surprises later in the year when the allocation runs low.

Where to get the actual figures

For the current 2026-27 caps, thresholds, and percentages, go straight to the Australian Government Department of Education. For a family’s personal entitlement, including how their income and activity affect their subsidy, Services Australia is the source of truth. Because these settings are reviewed every year, treat any figure you find elsewhere as a prompt to verify, not as the final word.

This is the kind of moving target where a specialist saves you time. I am the single end-to-end ECEC advisor across the whole childcare lifecycle, backed by more than 30 years from the floor to the boardroom, so whether you are setting fees, testing viability, or preparing for approval, you have one childcare specialist to work it through with.

This guide is general information only and is not legal, financial or compliance advice.

Get the right support

Getting your fee strategy right against the current caps is one of the highest-leverage decisions you make each year, because it touches affordability, occupancy, and margin all at once. A performance audit gives you a clear view of where you sit and what to adjust. When you are ready to talk it through, get in touch and we will map it to your service.