Major shifts in the Australian early childhood landscape are set to transform how families access and afford early learning. For years, the Child Care Subsidy (CCS) Activity Test has been a complex hurdle for many parents, often acting as a gatekeeper to essential services based on how many hours a week they work, study, or volunteer. However, following recent legislative updates, the government has moved toward a more universal model. This change is designed to prioritize the developmental needs of the child over the administrative status of the parent, effectively ensuring that every child has a baseline of support regardless of their family’s professional circumstances.
The Shift to a Universal 3-Day Guarantee
Starting from January 5, 2026, the traditional Activity Test will be significantly modified to introduce the 3-Day Guarantee. Under the old system, families who engaged in fewer than eight hours of recognized activity per fortnight often received zero subsidized hours if their income exceeded a certain threshold. The new update removes this barrier, granting all CCS-eligible families a minimum of 72 hours of subsidized care per fortnight. This is equivalent to three standard days of care per week. This move acknowledges that early education is a critical developmental stage for children, rather than just a labor-market tool for parents.
While the 3-Day Guarantee sets a new floor for everyone, the activity test has not been entirely abolished for those seeking maximum support. Families who need more than 72 hours of subsidized care per fortnight will still need to report their activity levels. To qualify for the maximum of 100 hours per fortnight, parents generally need to engage in more than 48 hours of recognized activity. This tiered approach ensures that those with full-time work or study commitments are not disadvantaged, while those with irregular hours or low activity are finally brought into the fold of subsidized care.
Subsidized Hours Breakdown (Effective Jan 2026)
| Activity Level (per fortnight) | Subsidised Hours (per fortnight) | Previous Minimum (for high income) |
| 0 to 48 hours | 72 hours (3-Day Guarantee) | 0 hours |
| More than 48 hours | 100 hours | 100 hours |
| First Nations Children | 100 hours (regardless of activity) | 36 hours |
Major Updates for First Nations Families
One of the most impactful elements of the CCS update is the specific provision for Aboriginal and Torres Strait Islander children. Recognizing the importance of culturally safe early education in “Closing the Gap” outcomes, the government has removed the activity test entirely for these families. Regardless of the parents’ work or study hours, First Nations children are now eligible for 100 hours of subsidized care per fortnight. This change is a direct response to advocacy from community leaders who argued that the previous test was a significant deterrent to families who would benefit most from early intervention and learning.
Income Thresholds and Subsidy Percentages
It is important to note that while the “hours” of care are changing, the “percentage” of the subsidy still depends on your family’s combined annual income. For the 2025–2026 period, families earning up to $85,279 receive the maximum subsidy rate of 90%. As income increases, this percentage tapers down by 1% for every $5,000 earned, reaching 0% once the family income hits $535,279. Additionally, the “Higher CCS” for families with multiple children under five remains in place, offering up to a 95% subsidy for younger siblings to help ease the financial burden on larger families.
Even with the increase in subsidized hours, most families will still be responsible for a “gap fee.” This is the difference between what the childcare provider charges and the amount the government covers. The government sets an hourly rate cap—for example, $14.63 per hour for Centre-Based Day Care—and the subsidy percentage is applied to either that cap or the provider’s actual fee, whichever is lower. If your provider charges $16 per hour, you will always be responsible for the difference above the cap, plus your percentage of the capped amount.
Preparing for the 2026 Transition
For families already receiving the Child Care Subsidy, the transition to the 3-Day Guarantee is expected to be relatively seamless. Services Australia has indicated that updates will be applied automatically in most cases. However, families who were previously ineligible for any hours due to the activity test should look to lodge a new claim. Staying informed and ensuring your income estimates are accurate in the MyGov portal remains the best way to avoid “balancing” debts at the end of the financial year. This policy shift represents a landmark move toward a universal system that treats early childhood education as a right for the child, not a perk for the working parent.
FAQs
Q1: Do I need to do anything to get the 3-Day Guarantee?
If you are already registered for CCS, the update should be applied automatically by Services Australia starting in January 2026. If you previously didn’t qualify for hours, you may need to submit a new claim.
Q2: Can I still get 100 hours of subsidy?
Yes. If you participate in more than 48 hours of recognized activity (work, study, volunteering) per fortnight, or if you are caring for a First Nations child, you remain eligible for the full 100 hours.
Q3: What counts as “recognised activity”?
Recognized activities include paid work, self-employment, authorized leave (including parental leave), training, studying, and actively looking for work. Even travel time between your childcare and your workplace can often be included.
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