In a significant move to support Australian families, the government has announced a comprehensive $533,290 child care reform package set to commence in January 2026.
This initiative aims to alleviate the financial burden of child care and enhance access to early childhood education.
Key Features of the Reform
1. Three-Day Guarantee
Starting January 5, 2026, all eligible families will receive a guaranteed 72 hours (three days) of subsidized child care per fortnight, irrespective of their work or study status. This replaces the previous activity test, ensuring broader access to early education.
2. Income-Based Subsidy Rates
The subsidy percentage is determined by the family’s annual income:
| Annual Family Income | Subsidy Percentage |
|---|---|
| Up to $83,280 | 90% |
| $83,281 – $343,680 | Decreases gradually to 50% |
| $343,681 – $503,680 | Decreases gradually to 20% |
| $503,681 – $533,280 | Decreases gradually to 0% |
| Above $533,280 | Not eligible |
Families with multiple children under five may receive higher subsidies for the second and subsequent children.
3. Additional Child Care Subsidy (ACCS)
For families facing financial hardship, domestic violence, or other exceptional circumstances, the ACCS provides up to 100% coverage of child care fees, ensuring children have access to safe and consistent care.
Eligibility Criteria
To qualify for the Child Care Subsidy:
- Residency: At least one parent must be an Australian citizen or hold permanent residency.
- Child’s Age: The child must be 13 years or younger and not attending secondary school (unless exempt).
- Immunization: Children must meet immunization requirements.
- Approved Providers: Care must be through government-approved child care services.
- Financial Responsibility: The applicant must be responsible for paying child care fees.
Application Process
Applying for the subsidy is straightforward:
- Set Up a myGov Account: Link it to Centrelink.
- Submit Application: Provide income details, child care arrangements, and other relevant information.
- Verification: Once approved, subsidies are paid directly to the child care provider, reducing out-of-pocket expenses.
Projected Benefits
The reform is expected to benefit approximately 66,700 families in its first year. For instance, a family earning $90,000 annually with one child in care for three days a week could save up to $11,400 per year on child care fees.
Australia’s 2026 child care reform represents a significant step towards making early childhood education more accessible and affordable.
By introducing the Three-Day Guarantee and adjusting subsidies based on income, the government aims to support working families and promote better outcomes for children nationwide.
FAQs
When will the new child care subsidy reforms take effect?
The reforms will commence on January 5, 2026.
How does the Three-Day Guarantee benefit families?
It ensures all eligible families receive 72 hours of subsidized child care per fortnight, regardless of their work or study commitments.
Are high-income families eligible for any subsidy?
Families earning up to $533,280 annually may receive a tapered subsidy, with the percentage decreasing as income increases.