A major overhaul of childcare payments has come into effect, merging the old system into a single subsidy.
Childcare subsidies are changing on Monday to a means-tested and activity-tested payment, meaning both parents must be working, studying, volunteering or searching for work at least eight hours a fortnight to be eligible.
Under the changes, households with a total annual income under $186,958 will no longer face a cap on the amount of rebate paid by to them each year.
For those earning more than this, the annual cap will lift from $7500 to just over $10,000 per child.
Labor claims one in four families will be worse off under the changes.
The opposition's early childcare education spokeswoman Amanda Rishworth said it would cost on average $5300 for families earning less than $65,710 who don't meet the activity requirements to replace care they are losing.
But the government is keen to stress the majority of families will be better off.
"Nearly one million families are set to benefit from our changes and analysis shows they will mean families are hundreds, if not thousands of dollars a year better off," Education Minister Simon Birmingham said.
Mr Birmingham said the biggest winners would be families on lower incomes and those working the most.
"This is about delivering more support for more families," Mr Birmingham said.
Hundreds of thousands of families are yet to switch to the new system, but Mr Brimingham said there was still time to change.
There will be a safety net in place to allow back payments to be made within the first three months of the scheme's operation.
Australian Associated Press
