Crossbenchers and Greens senators call for Labor to scrap child care subsidy activity test

The Albanese government has been called to scrap a test that experts say is unfairly punishing low income families and keeping women out of work.

The Albanese government is under pressure to abolish the activity test for childcare subsidies in the upcoming May budget, with crossbenchers flagging a fight to push for universal child care in the next federal election.

Crossbench MPs and Greens senators detailed their plans to ramp up calls to dump means testing and occupational requirements for childcare subsidies by May 9.

The test requires parents to be working or studying full-time to be eligible for government-funded childcare subsidies.

Prime Minister Anthony Albanese is facing pressure to end the activity test for parents wanting childcare subsidies. Picture: NCA NewsWire / Gary Ramage

The Women’s Economic Equality Taskforce, which was set up by the government to find ways to improve women’s financial status, recommended that the test be immediately scrapped in a landmark report published last year.

CEO of The Parenthood Georgie Dent said about 160,000 children from low-income households are being locked out of early education because of the policy.

“If you take a step back and consider we have got 20 per cent of children arriving at school developmentally vulnerable when we know that children with any form of disadvantage stand to benefit the most from high-quality early education and care,” she said.

“There is not an Australian in this country who doesn’t benefit from our children having their education and development supported.”

Zoe Daniel says she’ll take universal childcare to the next election. Picture: NCA NewsWire / Martin Ollman

Independent MP Zoe Daniel said she was currently in discussions with both Labor and the Opposition to gauge their support, urging the government to not use its recent extension of the paid parental leave scheme and pay women super when they go on maternity leave as “crumbs” to keep women happy.

“I would say the moves the government has made on super and paid parental leave are great but they’re not an excuse not to do other things,” Ms Daniel told NCA NewsWire.

“Doing a couple of bits of it is not going to unlock women’s workforce participation.”

Labor has flagged childcare reform as one of its key priorities. Picture: Dan Peled/NCA NewsWire.

Finance Minister Katy Gallagher has in the past acknowledged calls for the activity test to go but has not commit to making any changes at this stage

Her office has been contacted for comment.

The government has announced plans to introduce legislation to ensure that super is paid on parental leave payments starting July 2025, and recently expanded its paid maternity leave scheme by 26 weeks, which will kick during July 2026.

Originally published as Crossbenchers and Greens senators call for Labor to scrap child care subsidy activity test