Parents who take their children out of child care for more than 42 days will still be eligible for the child care subsidy if they have a medical certificate.
Child care facilities are not included in the ban on gatherings of more than 100 people, and the federal government is encouraging them to stay open.
However, Education Minister Dan Tehan outlined the process for parents who keep their children home.
"Families receiving the Child Care Subsidy can use up to 42 absence days per child, per financial year, for any reason without requiring supporting evidence - which would cover those in self-isolation," he said.
"Where the 42 days have been used, additional absences are available due to being ill from COVID-19 or where self-isolation is supported by a medical certificate.
"Families experiencing a loss of income, such as casual workers or those in self-isolation, may be eligible for the Additional Child Care Subsidy (temporary financial hardship).
"This subsidy is available for up to 13 weeks and, in most cases, the full cost of child care will be covered."
There are 1.3 million children in childcare across Australia along with 200,000 staff.
Meanwhile, for child care providers, grants are available through the $14 million Community Child Care Special Circumstances Fund to help cover business costs to ensure services impacted by COVID-19 can continue to operate.
Those business costs can include wages, Mr Tehan said.
"Applications for less than $10,000 are typically processed within four working days, and we have implemented streamlined processes to assist services seeking larger grants," he said.