This initiative will result in even stronger demand for Childcare businesses and probably an increase in market multiples due to demand. It will result in higher occupancy and thereby higher net profits increasing sale prices of Childcare centres.
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Childcare just got more affordable for parents!
Anthony Albanese brought forward a child care election commitment to be passed in the final full sitting fortnight of the term. (ABC News: Nick Haggarty)
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Three days of subsidised child care guaranteed for families
This initiative will add to demand and increase net profits.
The Australian Government is replacing the Child Care Subsidy (CCS) Activity Test from January 2026 to guarantee at least 3 days of subsidised early childhood education and care (ECEC) each week for children who need it.
The Australian Parliament has recently passed legislation that guarantees families a minimum of three days of subsidised childcare per week, regardless of parents’ work or study commitments. This significant policy change involves abolishing the existing activity test, which previously determined the level of childcare subsidy based on parents’ engagement in work, study, or other recognized activities.
- Abolition of the Activity Test: The removal of the activity test ensures that all parents can access at least three days of subsidised childcare per week, irrespective of their employment status or study commitments. This change aims to make early childhood education more accessible, particularly for children from low-income and disadvantaged families who were previously excluded due to the activity test requirements. abc.net.au
- Income Thresholds: Families with annual incomes exceeding $533,280 will remain ineligible for subsidised childcare, consistent with current policy settings. abc.net.au
- Implementation Timeline: The three-day subsidised childcare guarantee is scheduled to commence in January 2026. sbs.com.au
Background and Rationale:
The activity test, introduced in 2018, required parents to engage in a minimum amount of work, study, or volunteering to qualify for subsidised childcare. Critics argued that this test disproportionately affected children from low-income and disadvantaged families, limiting their access to early childhood education and care. A Productivity Commission review recommended abolishing the activity test, noting it hindered access for those who could benefit most without significantly increasing workforce participation. abc.net.au
By removing the activity test, the government aims to provide more equitable access to early childhood education, ensuring that all children, regardless of their parents’ employment status, can benefit from quality early learning experiences
FACT SHEET , click HERE.
https://www.education.gov.au/about-department/resources/3-day-guarantee-early-education
