Childcare costs will be reduced to about $15 per day for some families as the federal government scraps the activity test for subsidised childcare from this week.
Eligible Australian families will be granted at least 72 hours of subsidised early childhood education per fortnight as part of the three-day guarantee announced last year.
Treasurer Jim Chalmers said some parents forking out around $150 per day on childcare would see this daily cost slashed by almost 90 per cent.
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"What it means for some families, it will go down to $15 per day," Chalmers said.
"Lower-income families across Goodstart will be $250 better off per week from today."
Only families who earn a household income below $535,279 per year are eligible for the scheme.
Around 100,000 families will benefit, Chalmers said.
A family earning an annual household income of $140,000 per year will be $10,110 better off after 50 weeks of care, according to the federal government.
The treasurer described the new rule as the next step towards a universal childcare and early education system.
"The three-day guarantee recognises that the work that happens here is not babysitting, it's not childminding, it is a really important part of Australia's education system," Chalmers added.
"We work on the basis that if it's good for kids, it's good for families and good for the education system, then it's good for the economy as well."
Families receiving the CCS do not need to do anything to adjust to the changes, but must still meet eligibility criteria and pay a gap fee.
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Families are eligible if they care for their child at least two nights per fortnight, or have at least a 14 per cent share of care, meet residency requirements, and be liable for care fees.
Children must also not be in high school and be aged 13 or under, except in certain circumstances, and meet immunisation requirements.
The 72 hours of subsidised childcare can be increased to 100 hours a fortnight if the family is caring for an Indigenous child, have more than 48 hours each fortnight of recognised participation, have an exemption or experience exceptional circumstances, or receive Additional Child Care Subsidy (ACCS) child wellbeing, temporary financial hardship or grandparent payments.
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Families with an Aboriginal or Torres Strait Islander child in their care will need to tell Services Australia in order to receive 100 hours of childcare, but it's not a mandatory revelation if the family is happy with 72 hours.
Despite the subsidy guarantee, families are still not guaranteed a place with a child care provider.
They will need to secure a place with a service and may need to pay a gap fee.
More details can be found on the Department of Education website.
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