What is the preschool exemption to the Child Care Subsidy activity test?

Library Home  >  Preschool & KindergartenGovernment Policy & Quality Standards
  Published on Wednesday, 18 November 2020

What is the preschool exemption to the Child Care Subsidy activity test?

Library Home  >  Preschool & KindergartenGovernment Policy & Quality Standards
  Published on Wednesday, 18 November 2020
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The activity test is a key part of the Child Care Subsidy, and it involves the government looking at you and your partner’s hours of recognised activities (e.g. work and study) to determine how much subsidised care you’re eligible for, per child, per fortnight.

Some families receive up to 100 hours of subsidised care each fortnight, based on their activity level, but if your family is eligible for zero or 24 hours, then the ‘preschool exemption’ may be music to your ears.

This exemption says that, ‘Parents who do not meet and are not otherwise exempt from the Child Care Subsidy activity test will be entitled to 36 hours of subsidised care per fortnight to support their preschool-aged child to attend a preschool program at a Centre Based Day Care service.’

This is good news for parents on the lowest activity level, so let’s see how the preschool exemption works.

When does the preschool exemption apply?

To be eligible for these 36 hours of subsidised preschool care:

  • Your family must be eligible for the Child Care Subsidy (i.e. you must care for your child at least two nights per fortnight or have 14 per cent care, be liable for child care fees at an approved service, and meet residency and immunisation rules).
  • As parent/s, you must not meet or be otherwise exempt from the activity test, meaning your usual entitlement is less than 36 hours of subsidised child care per fortnight.
  • You must have a preschool-aged child, which means, ‘A child in the year before their first year of primary school.’ (e.g. if your child will start school in February 2021, they’re considered to be a preschool-aged child for 2020).
  • Your preschool-aged child must attend an early educational program at a Centre Based Day Care service. This preschool program is delivered by a qualified early childhood teacher in line with an approved learning framework.

Your family needs to meet all four criteria to access the preschool exemption, and it’s important to note that the exemption only applies to your preschool-aged child.

If you have other children at a different educational stage, then your family’s usual Child Care Subsidy entitlement will apply.

What’s the next step in getting the preschool exemption?

If you think your family is eligible for the preschool exemption, you need to provide Centrelink with your child’s expected school start date, so they can work out if the exemption applies.

You can provide Centrelink with the expected start date via MyGov or the Express Plus Centrelink mobile app  – either when you make a Child Care Subsidy claim or by updating your Centrelink details later.

This is easily done. Once you’ve logged in to Centrelink, you just need to:

  • Select the ‘Child Care Subsidy’ heading
  • Select the ‘View/Update Child Education Details’ subheading
  • In the ‘Select a child’ screen, click on the ‘Action’ icon for your child
  • In the ‘Schooling details’ screen, make sure your child’s education level is set to ‘Has not started studies’
  • In the question box ‘When is [your child’s name] expected to start primary school?’ enter the estimated date they’ll attend primary school (e.g. 1 February 2021)

How is the preschool exemption applied by the government?

Once you’ve lodged a Child Care Subsidy claim, the government uses your information to work out whether:

  • Your family’s entitlement (based on the activity test) is usually zero or 24 hours of subsidised care per fortnight, and
  • Whether you have a preschool-aged child (or children).

If you meet both criteria, they’ll send you a claim outcome letter explaining that your subsidised care is either zero or 24 hours per fortnight, but that you may be entitled to 36 hours if your preschool-aged child attends a preschool program at their Centre Based Day Care service.

Your Centre Based Day Care service will need to fill out a ‘preschool indicator’ in its session reports to indicate whether your child was part of an early education program.

If their preschool indicator answer is ‘Yes’, Centrelink will ascertain whether your child is preschool-aged and calculate your family’s entitlement.

If their response is ‘No’, your family will get its usual entitlement – whether that’s zero or 24 hours of subsidised care per fortnight.

What happens if your child’s school start date changes?

If you decide to hold your child back from primary school for another year, then it’s important to update your child’s expected school start date with Centrelink as soon as you make the decision.

Your preschool exemption will no longer apply until your child is defined as a preschool-aged child again, in the year before primary school, but it’s vital that your keep your Centrelink information correct and current.


Department of Education, Skills and Employment

This child care article was last reviewed or updated on Wednesday, 18 November 2020

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