Parents will be required to work a certain number of hours to receive child care payments as part of an overhaul of the system, Social Services Minister Scott Morrison has confirmed.
The Government is yet to reveal details of the changes, but they could be announced as early as this weekend.
The overhaul is expected to include a single, means-tested rebate and a tougher activity test which requires parents to work a minimum number of hours before they can receive support.
At the moment, there is no minimum requirement.
Mr Morrison said the proposed changes are aimed at restoring integrity to the system and encouraging parents to work — not providing welfare.
“This is [fundamentally about] workforce participation. It’s not a welfare payment, it’s not a pension or an income support payment or anything like that,” he said.
“The purpose of doing any of this in childcare principally is to help families be in work and stay in work.”
Childcare subsidies cost the Government about $7 billion a year.
The Government’s changes are informed by a Productivity Commission report that recommended scrapping the 50 per cent rebate parents receive for their childcare costs.
Instead, it called for a single means-tested payment to go to childcare providers.
“The integrity test around this, the entitlements around this, we’re looking to make tougher to ensure that it does the job and we just don’t splash cash,” Mr Morrison said.
On radio station 3AW this morning, the Minister confirmed there would be a crackdown on parents who worked just a few hours a week and still received subsidised childcare.
Asked whether this meant “the more you worked, the more you got?”, Mr Morrison replied: “Yes, that’s exactly what it means”.
Labor says activity test ‘too tough’
The Government has been in talks with Labor hoping to get bipartisan support for the overhaul, but the Opposition has sharply criticised the proposal.
Labor’s families spokeswoman Jenny Macklin said the so-called activity test would be too tough.
“There is a whole range of reasons why parents need access to childcare while they might have just a small amount of work or while they’re looking for work … and Scott Morrison just seems to have forgotten that families need a whole range of supports, not just what he seems to be offering,” Ms Macklin said.
“The childcare changes are at the moment a complete mess.
“No family knows whether they’ll be better off or not. No family knows whether they’ll be locked out of childcare or not.”
Opposition Leader Bill Shorten also called on the Government “to come clean about the future of childcare”.
“How many families will be worse off because of the Abbott budget? How many children will lose funding and drop out of the system because of the Abbott budget?” he said.
“And indeed, how many stay-at-home mums will lose valuable support because of the Abbott Government?”
Mr Morrison said he would ensure “a safety net remains in place for families, particularly in disadvantaged areas and [those who] face other forms of disadvantage”.
He said families on low to middle incomes would be “the biggest beneficiaries of the program”.
Mr Morrison has promised to unveil the Government’s child care package before the May budget.