The Three Day Guarantee Explained: What It Means for Childcare Providers

The Three Day Guarantee Explained: What It Means for Childcare Providers

The Three Day Guarantee is one of the biggest changes to childcare funding in Australia in years, and it started on 5 January 2026. If you run a childcare centre, or you are planning to become an approved provider, it changes who can access subsidised care, and it makes your CCS Approval more important than ever. Here is what the Three Day Guarantee actually is, and what it means for your centre.

What is the Three Day Guarantee?

From 5 January 2026, every Child Care Subsidy eligible family can access at least three days of subsidised care each week, which works out to 72 hours per fortnight for each child. The key change is that this base entitlement no longer depends on how much the parents work or study. Before this, families had to pass an activity test that linked their subsidised hours to their hours of work, study or volunteering. Now the first three days are guaranteed regardless of activity level. Families caring for a First Nations child can access 100 hours of subsidised care per fortnight.

One point is worth being clear on, because families will ask you. The activity test has not disappeared completely. It no longer stands in the way of the first 72 hours, but families who want more than that, up to 100 hours per fortnight, still need to report their recognised activity to Services Australia.

How does the Child Care Subsidy work alongside it?

The Three Day Guarantee decides how many hours are subsidised. The Child Care Subsidy decides what share of the fee the government pays. For the 2025 to 2026 year, families earning about $85,279 or less receive the maximum subsidy of 90 percent of the fee, up to the government hourly rate cap. Above that income, the rate reduces by one percentage point for every $5,000 of extra family income. Families with more than one child aged five or under can receive a higher rate for their younger children. The subsidy is paid to your centre on the family's behalf, and the family pays the remaining gap fee.

What does the Three Day Guarantee mean for your childcare business?

This reform is good news for providers. More families are now eligible for subsidised care regardless of their work situation, so demand for places is likely to grow, especially among families who were previously locked out by the activity test. In practice this means more families can enrol without the old financial barrier, your occupancy has room to grow, and your CCS Approval matters more than ever. Without CCS Approval, your centre cannot receive these subsidy payments, and for almost every childcare business that subsidy is the single biggest source of income.

What should you do now?

If you are becoming an approved provider, build CCS Approval into your plan from the very start rather than treating it as an afterthought. A common recommendation is to apply for CCS Approval alongside your Service Approval, so you are ready to receive subsidy from the day you open instead of losing income while you wait. If you are unsure how the approval process fits together, that is exactly the kind of thing our team helps providers work through.

For the official detail, families can check Services Australia and providers can refer to the Department of Education. If you want help getting your childcare business approval ready, contact Childcare Ready today.