The Federal Government has announced that there will be changes to the way childcare payments are determined in the 2015 budget.
Social Services Minister Scott Morrison said the changes will more strongly tie childcare payments to workforce participation.
“What has been guiding us on childcare has been the objective of workforce participation. It’s not a welfare payment. It’s not an income support payment or anything like that. It is there to encourage people to be in work, stay in work, so families can have choices,” he said.
This has raised concerns that a new activity test will result in 1.1 million families losing subsidies, which could lead to some of the 1.6 million children using approved childcare places dropping out of the system.
Opposition spokeswoman for families, Jenny Macklin, said the change could mean families won’t be able to afford childcare.
“One of the big concerns we have with what we know about the Government’s plans so far is that the Government may end up locking out around 100,000 families from child care,” she said.
ABC Fact Check takes a look at the proposal.
What the Government has foreshadowed
Although the full detail of the changes have not yet been released, Mr Morrison has flagged the activity test as one area of reform.
At a press conference on May 1, Mr Morrison said he wanted to increase activity requirements for families before they receive childcare subsidies.