Child Care Subsidy Activity Test

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A new report from Impact Economics and Policy, Child Care Subsidy Activity Test: Undermining Child Development and Parental Participation, shows that the current activity test for the Child Care Subsidy is contributing to at least 126,000 children from the poorest households missing out on critical early childhood education and care.

The activity test restricts the number of hours of Child Care Subsidy a family is entitled to based on the ‘recognised activity’ parents are engaged in.

While the activity test aims to encourage participation in the workforce, it does the opposite by creating significant uncertainty for parents in casual employment due to the ongoing risk that they will fail to meet the test and generate overpayment debts.

The report recommends abolishing the activity test as the next step towards providing every Australian child with access to three days of quality early childhood education and care per week.

The Daily Telegraph covered the report in this article and lead economist Dr Angela Jackson was interviewed on RN Breakfast about the report.