Income-based daycare subsidy, sibling subsidy and other subsidies

If your family’s total household income is below a certain threshold, you can apply to the municipality for an extra financial subsidy so that it will be cheaper or completely free to have your child in daycare. This is called an income-based subsidy.

When you apply for an income-based subsidy, the starting point is your monthly household income. Your monthly household income is used to calculate your annual income (multiplied by 12) to find your family’s income-based subsidy percentage on the scale.

The income thresholds for 2025 are as follows:

• up to DKK 208,101 – income-based subsidy corresponding to all out-of-pocket fees that are eligible for subsudy (2025)
• DKK 208,101 to 646,499 – partial income-based subsidy (2025)
• DKK 646,500 and over – no income-based subsidy (2025)

The income thresholds are increased by:

• DKK 7,000 for each resident child under the age of 18 in addition to the first resident child (2025)
• DKK 72,822 when the parent who is entitled to the place and the income-based subsidy is a single parent (2025).

Recalculation of the income-based subsidy

When the municipality is to calculate and later recalculate your income-based subsidy for a specific month, the municipality bases it on the household’s monthly income. When calculating the income-based subsidy for an individual month, the municipality uses the information that you provided when applying. For the purpose of recalculating your monthly income-based subsidy, the information on your monthly income is pulled from the Danish Tax Agency’s so-called income register. There are special rules for, among other things, income from self-employment and income that is not taxable in Denmark.

More information on the rules, and the current income thresholds, are available on the Ministry of Children and Education website.

• Rules on calculating income-based subsidy (in Danish)

You apply to your municipality for an income-based subsidy. You must apply digitally by using the self-service, 'Apply for an income-based daycare subsidy'.

The municipality recalculates your income-based subsidy if the income comparison shows a deviation of at least 5 steps on the scale of income thresholds. This is done using information from the Danish Tax Agency’s income register. Too high or too low of an allocated income-based subsidy is generally deducted from or added to the subsequent collection of out-of-pocket fees for the daycare place. For parents with children in private institutions, too high or too low of an allocated income-based subsidy shall be paid back or paid out to them as an additional payment, respectively.

It is possible for parents to have their income-based subsidy recalculated when the conditions for doing so are met.

For use in the recalculation, the parents shall inform the municipality of all circumstances of significance to the amount of the income-based subsidy, including changes in the household composition. However, the parents are not obligated to provide information on changes in income, unless it concerns income from self-employment or income that is not taxable in Denmark.

In making the annual adjustments, a final statement is produced for household income in the individual months and on that basis a final calculation is made of the income-based subsidy for the individual months.

Parents have a duty to inform the municipality of changes in household composition, marital status, or other changes that may entail changes in the income-based subsidy.

You are entitled to a financial subsidy if your child has a significant and permanent impairment of physical or mental functioning and for therapeutic reasons goes to daycare. This is called a therapeutic subsidy and it reduces by half the out-of-pocket fees for the daycare place.

It is the municipality that assesses whether the child is entitled to a therapeutic subsidy and it is therefore the municipality that assesses whether you are entitled to a financial subsidy. A therapeutic allowance can only ever be granted after a concrete and individual assessment of the child.

The municipality can also grant a socio-pedagogical subsidy when:

• the municipal council assesses the child’s time in daycare to be particularly necessary for social or pedagogical reasons, and
• the issue of fees makes it difficult for the child to go to or remain enrolled in daycare.

Both conditions must be met, and the allocation of a socio-pedagogical subsidy always takes place after a concrete and individual situational assessment of the family and the child. It is up to the individual municipality to make the assessment, including a determination of which criteria to emphasize.

An income-based subsidy is calculated before any therapeutic, socio-pedagogical, or sibling subsidy.

If you, as the parent(s), meet the conditions to receive sibling subsidy, then it amounts to half of the out-of-pocket fees for the cheapest place that you have. The cheapest place is determined by comparing the net operating costs of the place(s) for which the parents already pay.

Thus, parents pay full fees for the most expensive place that they have. The term 'sibling' includes biological siblings, adopted siblings, and step-siblings who live at the same address.

If you, as the parent(s), have a place at a daycare facility with a healthy lunch, and you as the parent(s) are entitled to sibling subsidy there, then you as the parent(s) are also entitled to a sibling subsidy for the lunch. This means that the municipality does not have to make a new assessment of whether sibling subsidy shall be provided for the lunch. The sibling subsidy is therefore calculated in relation to the child who receives the sibling subsidy there.

Sibling subsidy for private childcare according to § 80 of the Daycare Act are set at an amount that corresponds to at least 85 per cent of the sibling subsidy for the cheapest age-appropriate daycare in the municipality.

The sibling subsidy is independent from any other financial subsidy that the municipality has chosen to provide for private childcare. The basic subsidy for private childcare and the sibling subsidy shall be used for the parents’ payments for such.

You will automatically receive sibling subsidy, so you do not have to apply for it.

If you want a place in a private institution according to § 19, paragraph 5 of the Daycare Act, you must contact the institution directly. The municipality cannot assign children places in private institutions, and private institutions themselves determine the parental out-of-pocket fees.

Municipalities provide financial subsidies to approved private institutions. However, you are not entitled to a financial subsidy there until the child is entitled to daycare in your own municipality.

The subsidies from the municipality consist of an operating subsidy, a building subsidy, and an administration subsidy, which the municipality issues directly to the private institution.

• Subsidies and out-of-pocket fees (in Danish)

Parents with children from the age of 24 weeks until they start school shall be allowed by the municipality to choose a financial subsidy for private childcare instead of accepting a place in a daycare.

However, the municipality may decide that financial subsidy for private childcare is only provided to parents with children in a certain age group.

• Act 31–43a of the Daycare Act (in Danish)
• Guidance on daycare (in Danish)