Australia’s child care system is preparing for a major policy shift after the government confirmed that the Child Care Subsidy (CCS) Activity Test will be replaced from early 2026. The reform is designed to simplify access to subsidised child care, remove long-criticised participation barriers, and give families more certainty about how many hours of care they can rely on each fortnight. For many households, this marks one of the most significant child care changes in years.
The update focuses on moving away from a system that links subsidised hours strictly to parents’ work or study and toward a model that guarantees a baseline level of access to early childhood education.
What the CCS Activity Test Is and Why It’s Changing
Under the current CCS system, the number of subsidised child care hours a family receives depends heavily on how many hours parents spend in recognised activities such as paid work, study, training, volunteering, or job searching. Families who do not meet minimum activity thresholds can receive very limited subsidised hours, even if their income otherwise qualifies them for support.
This structure has long been criticised for being inflexible and difficult to navigate, particularly for families with casual or irregular work, carers with fluctuating responsibilities, and parents temporarily out of the workforce. The government has acknowledged that tying child care access so closely to parental activity can limit children’s participation in early learning and create uncertainty for families.
What Will Replace the Activity Test
From January 2026, the CCS Activity Test will be replaced by a new system commonly referred to as the 3-Day Guarantee. Under this model, all families who are eligible for the Child Care Subsidy will be entitled to a minimum of 72 hours of subsidised child care per fortnight, which is equivalent to three days per week, regardless of how many hours parents work or study.
This guaranteed baseline is intended to ensure that children can consistently access early education and care, while also giving parents more flexibility to manage work, caring responsibilities, or transitions back into the workforce.
How the New CCS Hours Will Work
While the guaranteed minimum is 72 hours per fortnight, families will still be able to access up to 100 subsidised hours per fortnight if they meet higher participation thresholds, qualify for exemptions, or fall under specific categories. In other words, the reform does not remove the option for higher subsidised hours; it ensures that all eligible families start with a meaningful minimum level of support.
Families caring for Aboriginal and Torres Strait Islander children will continue to receive higher baseline entitlements, reflecting existing policy commitments to improve access to early childhood education for First Nations children.
What Stays the Same Under the New System
Despite the significant change to how hours are allocated, many core elements of the Child Care Subsidy will remain unchanged. The percentage of subsidy paid will still depend on family income, with higher subsidies available to lower-income households and gradually reducing as income rises.
Families will still be required to pay any gap fee charged by their child care provider, and existing eligibility rules related to residency, child age, and immunisation status will continue to apply. Importantly, families already receiving CCS will not need to submit a new application when the new system begins, as the changes will be applied automatically.
Why the Government Is Introducing the Reform
The government has framed the replacement of the Activity Test as a move toward a more inclusive and child-focused system. By guaranteeing access to a baseline number of subsidised hours, the policy aims to remove uncertainty and ensure that children are not disadvantaged because of their parents’ employment patterns.
The reform also supports broader economic and social goals. By making child care access more predictable, parents may find it easier to take on additional work, seek training, or re-enter the workforce without first needing to secure activity hours. This is particularly relevant for parents returning to work after caring for young children.
Who Is Likely to Benefit the Most
The families expected to benefit most from the change include stay-at-home parents, families with irregular or casual employment, and households where one parent is temporarily not working due to caring responsibilities or health reasons. Low-income families are also likely to see improved access to subsidised care, as the guaranteed hours remove a major barrier to participation.
For many of these households, the new system provides stability. Knowing that a minimum level of subsidised care is available each fortnight can help families plan routines, budgets, and work arrangements with greater confidence.
Potential Challenges and Ongoing Concerns
While the policy change expands entitlement, it does not automatically solve all child care access issues. Availability of places remains a challenge in some regional, rural, and high-demand urban areas. In these locations, families may still struggle to secure child care places even if they are entitled to more subsidised hours.
There are also concerns that while the baseline hours increase, out-of-pocket costs may still be significant for some families, depending on provider fees and individual subsidy rates. Families will need to continue monitoring their income estimates and reporting changes promptly to avoid overpayments or adjustments.
What Families Should Do Before 2026
Families currently receiving CCS should ensure their details are up to date, including income estimates and care arrangements, so the transition to the new system is smooth. Parents planning to change work patterns or increase child care use in 2026 may want to review how the guaranteed hours could affect their overall costs and scheduling.
Providers are also expected to update systems and communication to reflect the new entitlement model, helping families understand how their subsidised hours will be calculated under the revised rules.
How This Change Fits Into Broader Child Care Reform
The replacement of the Activity Test forms part of a wider push to strengthen early childhood education and make it more accessible. Recent years have seen incremental increases in subsidy rates and policy adjustments aimed at easing cost pressures for families.
By shifting the focus from parental activity to guaranteed access, the government is signalling a long-term commitment to viewing child care as essential social infrastructure rather than conditional support.
Conclusion
The government’s decision to replace the Child Care Subsidy Activity Test with a guaranteed minimum of subsidised hours from January 2026 represents a major shift in how child care support is delivered in Australia. By ensuring all eligible families can access at least 72 hours of subsidised care per fortnight, the reform removes a key barrier, increases certainty, and prioritises children’s access to early learning. While challenges around availability and costs remain, the change has the potential to significantly improve how families engage with the child care system in the years ahead.
Disclaimer: This article is for general information only and does not constitute legal or financial advice. Policy details may change, and families should check official government sources for the most current information.