Second child higher CCS rate explained

Families with more than one young child in care may get a higher Child Care Subsidy rate for their second and younger children.

This is often called the second child higher CCS rate or higher rate for younger children.

It can make a big difference to out-of-pocket child care costs, but the rules are easy to misunderstand. The higher rate does not automatically apply to every child, and it does not always mean the government pays 95% of your actual daily fee.

This guide explains who gets the higher rate, how the 2025-26 rates work, and what can happen if your older child stops attending care or turns 6.

You may get the higher CCS rate if:

• you get Child Care Subsidy
• your family income is below the higher CCS income cut-off
• you have more than one CCS eligible child aged 5 or under
• the younger child or children are using approved care

Usually, your eldest CCS eligible child aged 5 or under gets the standard CCS rate. Your second and younger eligible children may get the higher CCS rate.

For 2025-26, the higher rate can be up to 95%, depending on your family income. Services Australia says the higher CCS rate applies to eligible younger children where the family has more than one CCS eligible child aged 5 or under.

What is the second child higher CCS rate?

The second child higher CCS rate is an extra subsidy rate for families with more than one young child in care.

The rule is designed to help families who have overlapping child care costs for two or more children aged 5 or under.

In simple terms:

• the eldest CCS eligible child aged 5 or under usually gets the standard CCS rate
• the second and younger CCS eligible children may get a higher rate
• the higher rate is worked out using a separate income test
• the higher rate can be up to 95%

This matters because families often assume both children get the same CCS percentage. In many cases, they do not.

2025-26 second child higher CCS rates

For comparison, the standard CCS rate for 2025-26 is:

The higher rate uses different thresholds from the standard CCS rate. It is not always as simple as adding a fixed percentage to your normal CCS rate.

For example, a family might have one child on the standard CCS rate and a younger child on a higher rate. The younger child's percentage depends on the higher CCS income test, not just the older child's rate. The Family Assistance Guide confirms that the higher rate uses separate income thresholds for higher rate children.

Does the higher rate apply to the full daily fee?

Not always.

CCS applies to the lower of your actual hourly fee or the government hourly rate cap. This means your CCS percentage may be 95%, but that does not necessarily mean the government pays 95% of your full daily fee.

For 2025-26, the CCS hourly rate caps are:

Example

Your younger child attends centre based day care for 10 hours a day. The centre charges $160 per day.

The 2025-26 hourly cap for a below school age child in centre based day care is $14.63, so the capped fee is $14.63 x 10 hours = $146.30.

If your younger child gets a 95% CCS rate, the subsidy is based on $146.30, not the full $160 daily fee.

• Capped daily fee: $146.30
• 95% CCS on capped fee: $138.99
• Parent gap before withholding: $21.01

If 5% withholding applies, your actual weekly out-of-pocket estimate may be slightly higher during the year.

If your centre charges above the hourly cap, you also pay the full difference on those extra cents. See fees above the hourly cap for more detail.

Which child gets the higher CCS rate?

Usually, the eldest CCS eligible child aged 5 or under gets the standard CCS rate. The second and younger CCS eligible children aged 5 or under may get the higher rate.

Even though both children are in care, the higher rate usually applies to the younger child, not both children.

Do both children need to attend child care?

Not necessarily.

The older child does not always need to be attending care at the same time as the younger child, but they generally still need to be CCS eligible.

That is the important distinction.

A child may stop attending care for a period and still be relevant to the higher rate calculation if their CCS eligibility has not ended. But if they stop using care for long enough, their eligibility can end and Services Australia may reassess the family's CCS.

Services Australia says if a child has not used child care for 26 consecutive weeks, they stop being eligible for CCS and the family will need to make a new claim if they use care again later.

Better way to think about it

The question is not simply: "Is the older child attending today?"

The better question is: "Is the older child still CCS eligible?"

If the older child is still CCS eligible and aged 5 or under, the younger child may still qualify for the higher rate. If the older child is no longer CCS eligible, the younger child may move back to the standard CCS rate.

What happens if the older child stops attending care?

If your older child stops attending care, the higher rate may not disappear immediately. But it can be affected if the older child's CCS eligibility ends.

Example

You have a 5-year-old who was attending kindergarten or long day care, and a 2-year-old who is still attending care.

If the 5-year-old stops attending, your 2-year-old may still receive the higher rate while the older child remains CCS eligible.

But if the older child does not use care for long enough and their CCS eligibility ends, your 2-year-old may no longer be treated as the higher rate child. That can increase your out-of-pocket costs.

Some families cancel CCS for a child who is not attending care, assuming it is required. In some cases, cancelling the older child's CCS assessment can reduce the CCS rate for the younger child. If your older child may return to care later, it is often safer to leave their CCS assessment active unless there is a clear reason to cancel it.

What happens when a child turns 6?

The higher CCS rate is based on having more than one CCS eligible child aged 5 or under. Once the older child turns 6, they may no longer count for the higher rate calculation. This can mean your younger child loses the higher rate and moves to the standard CCS rate.

This is one of the most common reasons a family's child care costs change during the year. If your child turns 6 during the financial year, it is worth checking your expected out-of-pocket cost before and after the birthday.

Why your younger child's CCS can change during the year

Your younger child's CCS rate can change if:

• your family income estimate changes
• your older child turns 6
• your older child stops being CCS eligible
• your child care usage changes
• your activity test hours change
• you add or remove a child from care
• Services Australia balances your CCS after tax time

This is why two families with the same child care fees can have very different out-of-pocket costs.

Common mistakes

Assuming 95% means almost free care

A 95% CCS rate sounds like the family only pays 5%. But your actual out-of-pocket cost also depends on the hourly rate cap, your provider's actual fee, the number of hours charged, your activity test result, 5% withholding, and whether the higher rate still applies.

If your centre charges above the hourly cap, you pay the gap above the cap as well.

Assuming both children get the higher rate

The higher rate usually does not apply to every child. In most families, the eldest CCS eligible child aged 5 or under gets the standard rate, and the younger eligible child or children get the higher rate.

If you have three children aged 5 or under and all are CCS eligible, the eldest usually gets the standard rate and the two younger children may get the higher rate.

Ignoring the older child's birthday

A child turning 6 can change the family's CCS calculation. This can be easy to miss because the change may happen part way through the financial year. A family may start the year with a younger child receiving the higher rate, then lose that higher rate when the older child turns 6.

If your child turns 6 during the year, check your expected out-of-pocket cost before and after the birthday.

Quick examples

Example 1: Two children under 6

A family has one 4-year-old and one 2-year-old. Both children are CCS eligible and family income is under the higher rate threshold.

The 4-year-old usually gets the standard CCS rate. The 2-year-old may get the higher CCS rate.

Example 2: Older child turns 6

A family has one child turning 6 in November and one younger child aged 3.

Before the older child turns 6, the younger child may get the higher rate. After the older child turns 6, the younger child may move back to the standard CCS rate.

Example 3: Older child stops attending care

A family has an older child who stops attending care and a younger child who continues attending.

The younger child may keep the higher rate for a period if the older child is still CCS eligible. But if the older child's CCS eligibility ends, the younger child may lose the higher rate.

How to check your second child CCS rate

You can check your current CCS details in your Centrelink online account or the Express Plus Centrelink app. Look for each child's CCS percentage, approved hours per fortnight, family income estimate, whether the child is still CCS eligible, and whether your younger child is receiving the higher rate.

You can also use CCS Checker AU to model how your out-of-pocket costs may change if your older child turns 6, one child stops attending care, your income changes, you add or remove a care day, or you want to compare 3, 4 or 5 days of care.

FAQs

What is the second child higher CCS rate?

It is a higher Child Care Subsidy rate that may apply to second and younger CCS eligible children aged 5 or under. The higher rate can be up to 95%, depending on your family income.

Does my oldest child get the higher CCS rate?

Usually no. The eldest CCS eligible child aged 5 or under usually gets the standard CCS rate. The second and younger eligible children may get the higher rate.

Does the older child need to be attending child care?

Not always at the exact same time, but the older child generally still needs to be CCS eligible. If they stop using care for long enough and lose CCS eligibility, the younger child may lose the higher rate.

What happens when my older child turns 6?

Your younger child may lose the higher CCS rate and move back to the standard CCS rate, unless there is another CCS eligible child aged 5 or under in the family.

Is the higher CCS rate always 95%?

No. The highest rate is 95%, but the actual higher child rate depends on your family income. The rate tapers with income and no longer applies once family income reaches $367,563 or more.

Does 95% CCS mean I only pay 5%?

Not always. CCS applies to the lower of your actual hourly fee or the government hourly rate cap. If your provider charges above the hourly cap, you still pay the difference.

What is the higher CCS income cut-off?

For 2025-26, the higher CCS rate no longer applies once family income reaches $367,563 or more. At that point, all children receive the standard CCS rate based on the standard income test.

Key takeaway

The second child higher CCS rate can significantly reduce child care costs for families with more than one young child in care. But the rules depend on more than just having two children.

The key things to check are:

• whether each child is CCS eligible
• which child is treated as the standard rate child
• whether the younger child gets the higher rate
• whether the older child is still aged 5 or under
• whether the hourly cap limits the subsidy
• whether a birthday or change in care could affect the rate

A younger child may get up to 95% CCS, but the final out-of-pocket amount depends on your income, fees, hours, rate caps and family situation.

Official sources

• Services Australia — Child Care Subsidy
• Department of Education — Hourly rate caps
• Family Assistance Guide — Higher CCS rate

Related guides

• CCS income thresholds and steps
• Hourly rate cap explained
• Fees above the hourly cap
• CCS withholding explained
• 3 Day Guarantee explained

This is general guidance only. Report all changes (income, relationship, care arrangements) promptly via myGov. For personalised advice, contact Services Australia at 136 150 or visit servicesaustralia.gov.au/child-care-subsidy.