In a major win for Australian families, the 2025 Federal Budget has unveiled a substantial childcare subsidy boost that could save eligible households up to $11,400 annually.
This move is designed to ease the rising cost of childcare, encourage workforce participation, and improve early education outcomes.
What’s Changing in 2026?
From January 1, 2026, families that meet specific eligibility criteria will be able to access 36 hours of subsidized childcare per week — up from the current 18 hours.
This change means that families can now receive double the support they were previously entitled to, significantly reducing their weekly out-of-pocket childcare costs.
How Much Will Families SaveChildcare ?
On average, childcare costs in Australia are approximately $6.40 per hour. With an additional 18 hours subsidized each week, the average weekly saving comes out to around $230. Over the course of a year, that totals approximately $11,400 in annual savings.
| Aspect | Before (2025) | After (2026) | Impact |
|---|---|---|---|
| Subsidized Hours/Week | 18 hours | 36 hours | 18 additional hours per week |
| Estimated Weekly Savings | – | $230 | Lower weekly childcare costs |
| Annual Savings | – | $11,400 | Significant long-term relief |
Figures are based on average national childcare costs and may vary by location and provider.
Who Qualifies for the $11,400 Boost?
To be eligible for the increased childcare subsidy, families must meet the following criteria:
- Have a combined household income under $533,280 annually
- Have children enrolled in approved childcare services
- Satisfy the activity test, which typically includes work, study, or volunteering requirements
- Use services that charge fees at or below the set hourly cap
The change particularly benefits low to middle-income families, especially those with parents re-entering the workforce or increasing work hours.
Why This Childcare Boost Matters
This childcare support is more than just a financial benefit — it’s a social and economic investment. Here’s why it matters:
Encouraging Workforce Participation
With reduced out-of-pocket childcare costs, more parents (especially women) are expected to return to work or increase their hours, contributing to overall economic growth.
Supporting Early Childhood Development
Access to high-quality childcare improves learning, behavior, and social skills in young children, setting them up for future success in school and beyond.
Helping Families Cope with Cost-of-Living Pressures
In an era of high inflation and economic uncertainty, this boost provides tangible relief to families struggling with everyday expenses.
When Will the Changes Take Effect?
- Announcement: Made as part of the 2025 Federal Budget
- Start Date: January 1, 2026
- Automatic Adjustment: Eligible families will see the increased subsidy reflected in their childcare bills once implemented
Families are encouraged to check their eligibility early and speak to their childcare provider to prepare for the upcoming changes.
The 2025 Federal Budget’s childcare subsidy expansion marks a turning point for thousands of Australian families. By offering up to $11,400 in annual savings, the government is making childcare more affordable and accessible, easing financial stress, and promoting early learning.
This measure supports working parents, boosts participation in the economy, and enhances long-term outcomes for children. Families who meet the criteria should take full advantage of this opportunity starting in 2026.
FAQs
How much will I save under the new childcare subsidy plan?
Eligible families could save up to $230 per week, or around $11,400 per year, depending on their childcare usage and provider costs.
Who is eligible for the increased childcare subsidy?
Families with a combined income under $533,280, meeting the activity test, and using approved childcare services qualify for the expanded support.
When does the new childcare subsidy begin?
The increased subsidy takes effect from January 1, 2026, and will be automatically applied to eligible families’ accounts.