Families are set to lose $230 million in childcare subsidies over the next four years, with calls for the senate to block the changes.
Under changes in the budget, the income eligibility for the Child Care Benefit will be frozen for three years from July.
This will save $33 million next financial year, and rising to $77 million by 2017-18.
Overall, Government spending on childcare subsidies is set to rise to $28.5 billion in the next four years with the number of children in “formal” childcare growing.
Childcare fees have risen 7 per cent on average over the past decade, well above indexation, meaning that childcare payments are already losing real value over time.
However, the freeze on eligibility will mean $230 million less will be spent, with the budget papers saying the savings will go to “repair the budget and fund policy priorities”.
Peak group Early Childhood Australia CEO Samantha Page told Fairfax the opposition and minor parties should block the changes in the senate.
“Childcare fees have risen 7 per cent on average over the past decade, well above indexation, meaning that childcare payments are already losing real value over time,” she said.
“These changes will put pressure on low and middle income families.”
Greens senator Sarah Hanson-Young said the party would oppose the changes. She said the government should put money into childcare instead of taking it out.
“Ripping more than $200 million out of the pockets of Australian mums and dads is not the way to fix our nation’s broken childcare system,” she said.
Assistant Education Minister Sussan Ley said the move would keep payments sustainable in the future.
“It’s key families remember we’ve also tasked the Productivity Commission with finding ways to make childcare more affordable, flexible and accessible and restored $12.6 million for occasional childcare that Labor cut,” she said
Ms Ley said families may still be eligible for the separate Child Care Rebate which is not means tested.