Child Care Subsidy · guide
The higher Child Care Subsidy for younger children
With two children aged 5 or under in care, the younger one can be subsidised at a higher rate. How the second income test works.
Checked by Radif Partners · Editorial policy · How we calculate
When a family has two or more children aged 5 or under in approved care, the eldest of them receives the standard Child Care Subsidy percentage and each younger one can receive a higher percentage worked out with a separate income test. In 2026-27 the higher rate is 95% up to a combined family income of $146,437, then falls by one point for each $3,000 to 80% at $191,437, holds there until $270,727, falls again to 50% at $360,727, and stops applying at $370,727, after which every child receives the standard rate. For a family earning $220,000 with children aged 1 and 4 in day care, the younger child is subsidised at 80% instead of 63%, which adds about $145 a fortnight at the same fee.
Two children in care: what the higher rate adds
Subsidy for both, per fortnight
$1,223
| Elder child (63%) | $539 |
| Younger child (80%, higher rate) | $684 |
| Your gap for both | $577 |
After the 5% withholding; 10-hour sessions in centre-based day care.
Which child gets which rate
The "standard rate child" is usually the eldest child aged 5 or under who is eligible for Child Care Subsidy. Every younger child aged 5 or under is a "higher rate child" (Family Assistance Guide 3.5.4). A school-age child in outside school hours care does not take the standard-rate place: they are paid at the standard percentage, and the higher rate is decided among the children aged 5 or under alone. The family must be using care for both children for the higher rate to apply; a baby at home does not lift the subsidy of an older sibling in day care.
The bands, side by side
| Family income | Standard rate (eldest) | Higher rate (younger) | Subsidy for both, per fortnight |
|---|---|---|---|
| $120,000 | 83% | 95% | $1,522 |
| $160,000 | 75% | 90% | $1,411 |
| $200,000 | 67% | 80% | $1,257 |
| $250,000 | 57% | 80% | $1,171 |
| $300,000 | 47% | 70% | $1,000 |
| $365,000 | 34% | 50% | $718 |
| $380,000 | 31% | standard rate | $530 |
The step between the two percentages is largest in the middle of the income range. At $250,000, the eldest child is on 57% while the younger child is held at 80% by the plateau of the higher test. Above $270,727 the higher rate starts falling again, and above $370,727 it no longer exists.
Why "or part of" matters
Both income tests remove a point for each $5,000 or $3,000 "or part of" that amount above the threshold. The guide's own example shows it: at a combined income of $288,520, the higher rate is 74%, because the income is $17,793 above the start of the second taper, which is five full steps of $3,000 and part of a sixth. One dollar can therefore cost a full percentage point.
Twins, triplets and close siblings
Twins in care are a common case. One of them is treated as the standard rate child and the other as a higher rate child, so a family with twin toddlers at $180,000 has one child at 71% and the other at 83%. With triplets, two of the three attract the higher rate. Families with three children under 6 in care often see the biggest difference, since every child after the eldest is lifted.
The gain from the higher rate is largest when both children attend several days and the fee is near the hourly cap, because the extra percentage points apply to more hours and to a larger hourly amount. A family using one day a week for the younger child gains little in dollar terms, even at the top of the higher rate.
How the higher rate interacts with the 3-day guarantee
The higher percentage changes the subsidy per hour, not the number of hours. Each child still has 72 subsidised hours a fortnight, or 100 if the parents qualify, and hours booked beyond that are charged at the full fee whatever the percentage. See the 3-day guarantee.
When a child turns 6 or starts school
The higher rate is tied to the age of the children. When the eldest child aged 5 or under turns 6, the next child becomes the standard rate child and the third, if any, keeps the higher rate. If only one child aged 5 or under remains in care, that child moves to the standard rate. Centrelink reassesses this automatically, but a change in who is enrolled, for example a sibling leaving day care, should be reported so that the right child keeps the higher percentage.
The Child Care Subsidy calculator applies the higher rate automatically to the younger of two children aged 5 or under, and the household calculator adds the result to the rest of the family's payments.