Here’s the main changes happening for families, students, carers and pensioners from January 2026 and what it means for your hip pocket.
Child Care Subsidy – 3 Day Guarantee
From 5 January 2026, the Child Care Subsidy activity test will be replaced, giving Child Care Subsidy eligible families at least 3 days of subsided child care a week, no matter how much time they spend in recognised participation, like work or study. This is known as the ‘3 Day Guarantee’.
If you’re already getting Child Care Subsidy, you don’t need to do anything. Services Australia will apply the updates – there’s no need to call.
The changes help families who missed out under the activity test access early childhood education and care by giving families at least 3 days of subsidised child care a week.
Aboriginal and Torres Strait Islander children can get 100 hours of subsidised care each fortnight.
An estimated 66,700 families are expected to save an average of $1,370 a year in child care costs in the measure’s first full financial year.
Families will still need to pay a gap fee or out of pocket cost to their child care provider, based on their Child Care Subsidy percentage. There is no change to how the rate of subsidy is worked out.
For more information about the change and how to claim Child Care Subsidy, go to servicesaustralia.gov.au/childcaresubsidy.
Some social security payments increase
From 1 January 2026, more than a million Australians receiving youth, student and carer support will see their payment rate rise thanks to a new round of indexation.
The amount the payment increases depends on your circumstances. For instance, Youth Allowance recipients who are single and have dependent children will see a payment increase of $17.60 to a maximum rate of $863.40 a fortnight (including Energy Supplement).
Carer Allowance will also increase by $3.30 - benefiting around 680,000 carers and taking the rate to $162.60 a fortnight.
Austudy and Youth Disability Support Pension will also rise by up to $17.60 and $17.20 a fortnight respectively.
For more information, visit DSS’s website.
Cheaper Medicine on the PBS
From 1 January 2026 the maximum cost of a Pharmaceutical Benefits Scheme (PBS) prescription will fall from $31.60 to $25 for people without a Commonwealth concession card.
This will reduce out-of-pocket costs for medicines for millions of Australians.
For more information about the PBS, visit Pharmaceutical Benefits Scheme - Services Australia.
More help with dental costs for kids
From January, the Child Dental Benefits Schedule will cover even more costs of going to the dentist for eligible children and their families.
Child Dental Benefits Schedule is a government program that can cover part or all of the cost of basic dental services for eligible children aged 17 or under.
This can cover over $1,158 every two years, an increase of $26 from 1 January 2026. This could be over $9800 in coverage by the time they turn 17.
If you’re eligible for the scheme, keep an eye out for a letter from us in early January – it’ll be in your myGov inbox. If you don’t have a myGov account, the letter will be sent via post.
For more information about Child Dental Benefits Schedule, visit Child Dental Benefits Schedule - Services Australia.
Reminder – $271 million in unpaid Medicare benefits
Don’t set and forget – check that your bank account details with Medicare are up to date and make sure you’ve been paid your Medicare benefits. We can’t pay you if we don’t have your current bank details.
There’s over $271 million unpaid benefits owed to almost 1 million people! Some people are owed over $30,000 each!
Take 5 to go into your Medicare online account through myGov, or log in through your myGov app, and check your bank account details are registered and up to date, so you’re getting paid your benefits.
For more information about how to update your bank details, go to servicesaustralia.gov.au/getmedicarebenefits.