How the higher rate works
Since 10 July 2023, families with two or more children in approved childcare receive a higher CCS rate on their younger children. The formula is straightforward:
Higher CCS rate formula
Higher rate = min(standard rate + 30pp, 95%)
Where “standard rate” is the CCS percentage based on your family income (the same rate the eldest child receives), and 30pp means 30 percentage points.
The 30-percentage-point boost means most families with combined income under about $200,000 will see their younger children receive the maximum 95% CCS rate. Even families earning $535,279+ (where the standard rate drops to 0%) still receive a 30% CCS rate on younger children.
Who qualifies
The higher rate applies when all three of these conditions are met:
- Two or more children in approved care: At least two of your children must be currently enrolled and attending approved childcare (any type — centre-based, family day care, OSHC, or in-home care).
- Younger child is aged 5 or under: The child receiving the higher rate must not yet have started school. Once they turn 6 or begin school, they revert to the standard rate.
- Standard CCS eligibility: The family must meet the normal CCS requirements (Australian residency, child immunised, using an approved provider).
Which child gets which rate
The rule is simple and based on birth order among children currently in approved care:
| Child | Rate applied | Condition |
|---|---|---|
| Eldest in care | Standard rate | Always the standard income-based rate |
| 2nd child in care | Higher rate (up to 95%) | Must be aged 5 or under |
| 3rd child in care | Higher rate (up to 95%) | Must be aged 5 or under |
| 4th+ child in care | Higher rate (up to 95%) | Must be aged 5 or under |
Example: If you have 3 children in care (ages 7, 4, and 2), the 7-year-old is the eldest and gets the standard rate. The 4-year-old and 2-year-old both get the higher rate because they're aged 5 or under.
Higher rate at every income level
The table below shows the standard rate (eldest child) and higher rate (younger children) at key income levels. The higher rate is simply the standard rate + 30 percentage points, capped at 95%.
| Family income | Standard rate (eldest) | Higher rate (younger) |
|---|---|---|
| $60,000Max standard rate | 90% | 95% |
| $85,279CCS floor (no taper below) | 90% | 95% |
| $100,000 | 87% | 95% |
| $120,000 | 83% | 95% |
| $150,000 | 77% | 95% |
| $180,000 | 71% | 95% |
| $200,000Higher rate still maxed at 95% | 67% | 95% |
| $250,000 | 57% | 87% |
| $300,000 | 47% | 77% |
| $350,000 | 37% | 67% |
| $400,000 | 27% | 57% |
| $450,000 | 17% | 47% |
| $500,000 | 7% | 37% |
| $535,279+Standard rate = 0, higher still 30% | 0% | 30% |
pp = percentage points. Higher rate capped at 95%. Below $85,279, standard rate is 90% (the maximum), so higher rate is 95%.
Worked example: 2 children
The Patel family earns $150,000/year combined. They have two children in centre-based day care — Anika (4) and Ravi (2). Both attend 3 days/week at $150/day (10-hour sessions).
| Anika (4) Eldest — standard | Ravi (2) Younger — higher | |
|---|---|---|
| CCS rate | 77% | 95% |
| Daily fee | $150.00 | $150.00 |
| Rate cap (10 hrs × $14.63) | $146.30 | $146.30 |
| CCS subsidy / day | $112.65 | $138.99 |
| Above-cap amount / day | $3.70 | $3.70 |
| Gap fee / day | $37.35 | $11.01 |
| Annual gap fee (3d/wk, 48 wks) | $5,378 | $1,585 |
| Combined family annual gap fee | $6,963 | |
What if both children were on the standard 77% rate? Ravi's gap fee would be $37.35/day instead of $11.01/day. That's an extra $26.34/day, or $3,793 more per year.
Higher rate saving: $3,793/year
The Patel family saves $3,793/year on Ravi's care thanks to the higher CCS rate. That's $73/week less out of pocket.
Worked example: 3 children
The Williams family earns $120,000/year combined. They have three children in care — Lily (6, OSHC), Jack (4, centre-based), and Mia (2, centre-based). Lily attends OSHC 5 days/week at $48/session. Jack and Mia each attend centre-based care 3 days/week at $140/day.
| Lily (6) Eldest — standard | Jack (4) Higher rate | Mia (2) Higher rate | |
|---|---|---|---|
| CCS rate | 83% | 95% | 95% |
| Care type | OSHC | CBDC | CBDC |
| Daily fee | $48.00 | $140.00 | $140.00 |
| Gap fee / day | $8.16 | $7.00 | $7.00 |
| Days per week | 5 | 3 | 3 |
| Annual gap fee (48 wks) | $1,958 | $1,008 | $1,008 |
| Total family annual gap fee | $3,974 | ||
Lily's gap = $48 × 17% = $8.16. Jack/Mia gap = $140 × 5% = $7.00 (fee is below rate cap, so no above-cap amount).
Without the higher rate, Jack and Mia would each pay $140 × 17% = $23.80/day gap fee, for $3,427 each per year. The higher rate saves the Williams family:
Higher rate saving: $4,838/year
($2,419 saved on Jack + $2,419 saved on Mia). That's $93/week less out of pocket across both younger children.
When the higher rate stops
The higher rate stops for a child when any of the following happens:
- The child turns 6 or starts school — whichever comes first. Once the child is school-age, they receive the standard rate.
- The eldest child leaves approved care — if the eldest child stops attending (e.g. starts school with no OSHC), the next oldest becomes the “eldest in care” and drops to the standard rate.
- Only one child remains in care — the higher rate requires at least two children currently in approved care.
Annual subsidy cap for multiple children
Families earning above $85,279 are subject to an annual CCS cap of $11,003 per child. This cap applies independently to each child — it is not a family-wide cap.
Children on the higher rate receive more subsidy per session, which means they may reach their $11,003 annual cap earlier in the financial year. If a child hits their cap before the end of the year, CCS stops for that child until the new financial year begins.
For the Patel family example above (2 children, $150,000 income):
- Anika (77% rate): Annual CCS = $112.65/day × 3 days × 48 weeks = $16,222. This exceeds the $11,003 cap, so Anika's CCS would be limited.
- Ravi (95% rate): Annual CCS = $138.99/day × 3 days × 48 weeks = $20,015. This also exceeds the cap, and Ravi's CCS hits the ceiling even earlier due to the higher rate.
Families earning $85,279 or below have no annual cap, so the higher rate applies fully all year.
How to claim the higher rate
The higher rate is applied automatically by Services Australia. There is no separate application or form. To ensure it's applied correctly:
- All children must be on your CCS claim: Log in to myGov and check that all children in care are listed.
- Enrolments must be confirmed: Each child's provider must have confirmed their enrolment. Check your CCS balance statement for each child.
- Income estimate must be current: The higher rate is based on your standard rate, which is based on your income estimate. An outdated estimate can lead to overpayment and a debt at reconciliation.
Use the CCS Calculator with “2 children” or “3+ children” selected to see the higher rate applied automatically to your younger child's costs.