Child Care Subsidy vs Family Tax Benefit 2026 — What's the Difference?
Overview: Two Separate Systems
Australia offers two major financial support programs for families with children: the Child Care Subsidy (CCS) and the Family Tax Benefit (FTB). Both are administered by Services Australia through Centrelink and myGov, but they work in fundamentally different ways and serve different purposes.
Child Care Subsidy (CCS) reduces the out-of-pocket cost of approved childcare. Rather than being paid directly to families, CCS is sent to your childcare provider, which then charges you a reduced "gap fee." It is specifically tied to the use of approved childcare services and requires families to meet an activity test.
Family Tax Benefit (FTB) is a fortnightly cash payment to help with the general cost of raising children. It is paid directly to the parent or guardian and has no requirement to use any particular service or be employed. FTB is split into two separate payments: Part A (per child) and Part B (per family).
Understanding how each program works — and how they can work together — is essential for Australian families trying to maximise their entitlements in 2026.
What Is the Child Care Subsidy?
The Child Care Subsidy is a percentage-based reduction in your childcare fees, paid directly to your approved childcare provider on your behalf. You pay only the remaining "gap" amount.
How CCS Is Calculated
Your CCS entitlement depends on three factors:
- Family income — determines your subsidy percentage
- Activity level — determines the maximum subsidised hours per fortnight
- Hourly fee cap — the maximum hourly fee on which the subsidy is calculated, set by service type
2025–26 Income Bands and Subsidy Percentages
| Annual Family Income | CCS % |
|---|---|
| Up to $83,280 | 90% |
| $83,280 – $530,000 (approx.) | Tapers from 90% down |
| Over $362,336 (1 child) / $533,280 (2+ children) | 0% |
The taper is gradual: for every dollar earned above the lower threshold, the subsidy percentage reduces incrementally. Families with two or more children under 6 in approved care may be eligible for a higher subsidy rate for the second and subsequent children.
2025–26 Hourly Fee Caps by Service Type
The CCS is calculated on the lower of the actual fee charged or the hourly fee cap. If your provider charges more than the cap, you pay 100% of the difference above the cap.
| Service Type | Hourly Cap |
|---|---|
| Centre-based day care (long day care) | $14.29/hr |
| Family day care | $12.69/hr |
| Outside school hours care (OSHC) | $13.57/hr |
| In-home care | $39.25/hr (total, multiple children) |
The Activity Test
To receive CCS, each parent in a couple (or a single parent) must meet the activity test. The number of recognised activity hours per fortnight determines the maximum subsidised hours of care:
- 0–7 hours of activity: no subsidy (unless exempt)
- 8–16 hours: up to 36 subsidised hours per fortnight
- 17–48 hours: up to 72 subsidised hours per fortnight
- 49+ hours: up to 100 subsidised hours per fortnight
Recognised activities include paid work, paid leave, self-employment, approved study or training, volunteering, and looking for work. In a two-parent household, the parent with the lower activity hours determines the child's subsidised hours.
Child Age Limit for CCS
CCS is available for children up to and including the day before they turn 13 (primary school age). It is not available for secondary school students.
What Is Family Tax Benefit?
Family Tax Benefit is a fortnightly payment made directly to parents or guardians to assist with the general cost of raising children. It has two separate components: Part A and Part B.
FTB Part A — Per-Child Payment
FTB Part A is paid for each eligible child in the family. It is income-tested and tapers as family income rises.
2025–26 Maximum Fortnightly Rates (per child):
| Child's Age | Rate per Fortnight |
|---|---|
| 0–12 years | A$227.36 |
| 13–15 years | A$295.82 |
| 16–19 years (in full-time study) | A$234.86 |
Income test: The maximum rate applies for families with adjusted taxable income up to approximately $58,108 per year. Above this threshold, the rate reduces. A second income taper applies at around $94,316 for larger families.
FTB Part A Supplement: An annual supplement of A$938.05 per child is paid after end-of-year balancing with the ATO, provided the family meets relevant conditions (including lodging tax returns).
FTB Part A continues until a child turns 16, or up to age 19 if the child is in approved full-time secondary study.
FTB Part B — Per-Family Payment
FTB Part B is a flat per-family payment, intended to provide additional support where one parent has reduced earning capacity — typically single-income families or single parents.
2025–26 Fortnightly Rates:
| Youngest Child's Age | Couple Rate | Single Parent Rate |
|---|---|---|
| Under 5 years | A$188.86 | Higher rate applies |
| 5–13 years | A$131.74 | Higher rate applies |
Single parents generally receive higher effective rates under FTB Part B, and the income threshold is more generous (up to approximately A$100,900 for single parents).
Income test: For couples, FTB Part B is income-tested on the secondary earner's income. If the secondary earner earns more than approximately $5,767 per year, the payment reduces. If the secondary earner earns over approximately $28,945, FTB Part B is generally nil for couples.
No activity test: Unlike CCS, there is no work, study, or activity requirement for either FTB Part A or Part B.
FTB Part B is available until the youngest child turns 13, or until age 18 for single parents.
Key Differences: CCS vs FTB
| Feature | CCS | FTB Part A | FTB Part B |
|---|---|---|---|
| Purpose | Reduce childcare fees | Income support per child | Income support per family |
| Payment method | Direct to childcare provider | Fortnightly to parent | Fortnightly to parent |
| Activity test | Yes (minimum 8 hrs/fortnight) | No | No |
| Income test | Yes | Yes | Yes (secondary earner) |
| Child age limit | 13 years (primary school) | 19 (in full-time study) | 13 (or 18 for single parents) |
| Must use approved care? | Yes | No | No |
| Employment required? | Effectively yes (activity test) | No | No |
| Applied for via | myGov / Centrelink | myGov / Centrelink | myGov / Centrelink |
Who Gets What: Common Family Scenarios
Scenario A — Two-Earner Couple, Combined Income $90,000, One Child Aged 3 in Long Day Care (3 Days/Week)
- CCS: At $90,000 combined income, the subsidy percentage is approximately 87%. The activity test is almost certainly met by both parents working. This translates to a substantial reduction in weekly gap fees, especially for centre-based long day care at the $14.29/hr cap.
- FTB Part A: Eligible, though the rate will be slightly reduced since family income exceeds the lower threshold of approximately $58,108. A modest fortnightly payment and the annual supplement still apply.
- FTB Part B: Depends on the secondary earner's income. If the lower-income parent earns under $28,945, some FTB Part B is likely payable.
Scenario B — Single Parent, Income $55,000, Two Children Aged 2 and 5
- CCS: At $55,000 income, the parent qualifies for approximately 90% CCS for the 2-year-old in approved long day care. The activity test is based entirely on the single parent's own work or study hours.
- FTB Part A: Full rate likely for both children, since income is under the $58,108 lower threshold. The family receives the maximum fortnightly rate per child plus the annual supplement.
- FTB Part B: Eligible as a single parent. The income threshold is around $100,900 for single parents, so this parent is well within range for maximum FTB Part B.
Scenario C — High-Income Couple, Combined $250,000, One Child
- CCS: At $250,000 combined income, the subsidy percentage is substantially reduced — roughly in the 50–60% range depending on the exact income figure. Some subsidy still applies, providing meaningful savings on childcare fees.
- FTB Part A: Likely nil or very minimal. Combined income of $250,000 is well above both income test thresholds.
- FTB Part B: Nil. The secondary earner's income almost certainly exceeds the threshold for couples.
How CCS and FTB Interact
CCS and FTB are completely independent of each other. Receiving CCS does not reduce your FTB entitlement, and receiving FTB does not affect your CCS rate. You apply for them separately, and they are assessed separately.
However, both systems share important administrative characteristics that families should understand:
Accurate income estimates are critical for both. Both CCS and FTB are based on estimated annual income during the year, then reconciled against actual income after you lodge your tax return. Underestimating your income — even unintentionally — can result in a repayment debt at reconciliation time.
Both are reconciled annually through the ATO. At the end of each financial year, Services Australia checks your actual income (as reported in your tax return) against the income estimate you provided. If you were overpaid, you will need to repay the difference. If you were underpaid, you will receive a top-up.
Both require lodging tax returns on time. To receive the FTB Part A Supplement and to finalise CCS entitlements, you and your partner (if applicable) must lodge tax returns by the required deadline. Failure to lodge can result in supplements being withheld or debts being raised.
Changes in circumstances affect both payments. If your income changes significantly during the year — through a pay rise, job loss, or change in work hours — you should update your income estimate with Centrelink promptly for both FTB and CCS to avoid a large reconciliation debt or underpayment.
How to Apply
Both CCS and FTB are applied for through myGov linked to Centrelink. The process is straightforward but requires some preparation.
Before you apply, have ready:
- Your myGov account linked to Centrelink
- Tax File Numbers for you and your partner (if applicable)
- Your child's details (name, date of birth, immunisation status)
- Your income estimate for the current financial year
- For CCS: your childcare provider's name and CRN (Child Care Provider Reference Number)
- For FTB: bank account details for payment
Steps:
- Log in to myGov and navigate to Centrelink
- Apply for FTB Part A and Part B through the "Make a claim" section — these are applied for together
- Apply for CCS separately through the same Centrelink portal
- Provide your childcare provider's CRN so CCS can be linked to your provider
- Confirm your income estimate and keep it updated throughout the year
Processing times vary. FTB claims can often be processed within a few weeks. CCS is generally activated once the provider is linked and Centrelink has verified the claim.
Related Guides
- Australia Child Benefits 2026 — Complete Guide — FTB, CCS, Parental Leave and more
- Family Tax Benefit 2026: FTB Part A and Part B Explained — detailed FTB rates and eligibility
- FTB Part A vs Part B — Key Differences — comparison guide
- Child Benefits Calculator — estimate your Australian benefits
Rates sourced from Services Australia (servicesaustralia.gov.au). Last verified April 2026.