There are fears more than 100,000 mothers will be forced to give up work if the Abbott government cracks down on the number of hours parents have to work in order to receive childcare subsidies.
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The country's peak children's body, Early Childhood Australia, is calling on the government to make sure parents can access up to two days of subsidised childcare per child per week, without having to work or study.
This comes ahead of a key consultation meeting with childcare sector providers and experts on Wednesday, as Social Services Minister Scott Morrison prepares his new childcare package.
Parents are currently able to access 24 hours of the means tested Child Care Benefit per child per week without having to meet a work or study test. To access the non-means tested Child Care Rebate, both partners need to work or train "at some time" during the week - but there is no minimum number of hours required.
But a recommendation by the Productivity Commission, being considered by the government, would see parents needing to work for 24 hours a fortnight to access childcare funding.
Early Childhood Australia is concerned that the commission's recommendation would make it more difficult for some mothers trying to return to work after having a baby, as they may only pick up a small amount of paid work initially as they ease back into the workforce.
Mr Morrison has previously talked of the need for a "stronger" activity test than currently exists and said it is "one of the changes" the government is working on.
At least 16.4 per cent of mothers - or more than 100,000 women - work less than 24 hours a fortnight.
There is also concern about what the change will mean for those who do shift or casual work - as their hours are less predictable - and that it would unfairly hit low to middle income families.
"Childcare is not an incentive to work, it's actually an enabler of work," chief executive Samantha Page said.
"The activity test [measuring eligibility for subsidies] needs to be flexible for families, particularly those who aren't working but that are looking to enter the workforce.
"Many families are working less than 24 hours per fortnight so we need to be encouraging them to maintain workforce attachment, rather than putting up further barriers."
Ms Page is recommending all parents should be able to get up to two days a week of subsidised childcare per child, without having to meet a so-called "activity test".
To access 50 hours of subsidy a week, she says both parents should need to work, train or study for 24 hours a fortnight.
Early Childhood Australia is particularly concerned that children would be shut out of early learning education if the government adopts the Productivity Commission's model.
"Access to quality early learning amplifies children's development, their cognitive, social and emotional skills, boosting our nation's future prosperity," Ms Page said.
Early Childhood Australia's concerns about the activity test have also echoed by a group of the country's biggest childcare providers and by parent's group, The Parenthood.
