The CCS hourly cap is the most-overlooked piece of CCS math. You see a "75% subsidy rate" on your Centrelink letter and assume you'll save 75% of your daily fee — but the subsidy is capped at a per-hour ceiling, not your actual hourly fee. When your centre charges above the cap, you pay 100% of the excess.
This guide walks through the 2026-27 (1 July 2026 – 30 June 2027) caps, the math, and what to watch for.
The 2026-27 caps by care type
Hourly fee caps effective from 7 July 2026:
| Care type | Under school age | School age |
|---|---|---|
| Long Day Care (LDC) — typical centre care | $15.19 | $13.30 |
| Outside School Hours Care (OOSH) — before / after school | $15.19 | $13.30 |
| Family Day Care (FDC) — care in carer's home | $14.08 | $14.08 |
| In Home Care (IHC) — nanny-style in your home | $41.31 | $41.31 |
Indexed annually each 1 July. Check Services Australia for the exact current figure.
How the cap interacts with your subsidy
Two cases:
Case A: your fee is BELOW the cap
If your centre charges $13/hr ($130/day for 10 hours) and the LDC cap is $15.19:
- Your fee: $13/hr
- Cap: $15.19/hr → subsidy applied to $13 (the lower)
- At 75% subsidy: $13 × 75% = $9.75/hr subsidised
- Your out-of-pocket: $13 - $9.75 = $3.25/hr
No cap impact — you get the full benefit of your subsidy rate.
Case B: your fee is ABOVE the cap
If your centre charges $18/hr ($180/day for 10 hours) and the LDC cap is $15.19:
- Your fee: $18/hr
- Cap: $15.19/hr → subsidy applied to $15.19 (the cap)
- At 75% subsidy: $15.19 × 75% = $11.39/hr subsidised
- Your out-of-pocket: $18 − $11.39 = $6.61/hr
The $2.81/hr above the cap ($18 − $15.19) is paid entirely by you. The subsidy rate doesn't apply to it.
Expressed differently — the cap effectively converts your "75% subsidy" into a much smaller effective rate when fees are high. In the $18/hr example, the effective subsidy rate against your actual fee is $11.39 ÷ $18 = 63.29%, not 75%.
Why the cap creates surprises
Many parents see "75% CCS rate" on their Centrelink notice and assume their bill goes down by 75%. The cap means the real reduction is often 50-65% once fees are above the threshold.
Three reasons this surprises people:
- Centrelink notices show the percentage rate, not the cap interaction. The cap kicks in at the centre, not at Centrelink, so the notice doesn't surface it.
- Centre invoices show the subsidy as a discount, not as a calculation. You see "subsidy $107.70" without seeing the cap math behind it.
- Inflation pushes more families into the over-cap zone. Centres in capital cities frequently charge $180-220/day; with caps at ~$152/day equivalent, many families are now above cap by 20-45%.
What if my centre's fee is well above the cap?
Premium centres charging $200/day mean the cap covers 75.95% of the fee; the rest you pay in full regardless of your subsidy rate.
This creates a meaningful affordability gap. A family with 80% CCS at a $200/day centre:
- Daily fee: $200
- Cap: $15.19 × 10 hrs = $151.90 subsidised base
- Subsidy at 80%: $151.90 × 80% = $121.52
- Out-of-pocket: $200 − $121.52 = $78.48/day
For comparison, the same family at a $145/day centre — $14.50/hr, which is UNDER the cap:
- Daily fee: $145
- Cap: $15.19/hr, and the fee is below it, so the subsidy applies to the fee itself
- Subsidy at 80%: $145 × 80% = $116.00
- Out-of-pocket: $145 − $116.00 = $29.00/day
A $49.48/day saving by choosing the cheaper centre. Over a 4-day week × 50 weeks that is $9,896/year, before withholding and any absence rules.
OOSH cap is different — and lower
Outside School Hours Care for school-age children has a different (lower) cap — $13.30/hr for 2026-27 (under school-age uses the $15.19 rate). OOSH fees in metro areas are typically $25-40/day for 3 hours of after-school care = $8-13/hr. Most OOSH services are right at or below the cap.
The OOSH cap matters more for vacation care, where full-day fees of $90-130 are common ($9-13/hr). Many vacation care services are above the OOSH cap.
In Home Care (IHC) — a different ballgame
IHC has a much higher cap ($41.31/hr for 2026-27) because IHC is private-nanny-style care. Few IHC providers are below the cap; many are at or near it. IHC is also restricted to specific eligible cohorts (rural, complex care needs, and similar) — the eligibility is narrow, so check it before planning around the cap.
What you can do
Options when your centre is above the cap:
- Accept — the gap is real but the alternative (lower-fee centre) might not be a fit
- Move — to a centre at or below the cap. Could save thousands per year
- Reduce days — same hourly overrun but smaller total
- Negotiate — usually unsuccessful since fees are centre-wide, but worth asking
- Check Family Day Care — one cap ($14.08/hr, the same whether or not the child is at school) and often lower actual fees; especially viable for under-3s
The structural answer for centres: fees creep above caps year after year because demand outstrips supply. Cap indexation lags fee inflation.
How NestWise helps
The free CCS calculator takes your daily fee and computes the actual subsidy applying the cap — you see the real out-of-pocket, not just the headline rate.
The full CCS view does per-child fees and shows the same calculation for each child, plus the annual total.
Related guides
- How much Child Care Subsidy will I get?
- The CCS activity test explained
- Higher CCS for second child
- CCS Reconciliation explained
Sources: Services Australia — Child Care Subsidy hourly rate caps, DSS Family Assistance Guide §3.5.4 — Hourly rate cap, Department of Education — Child Care Subsidy.