126 000 more kids to access care, Activity Test removed

Historic Reform Guarantees Access to Early Childhood Education for 126,000 More Children, Removing Barriers for Disadvantaged Families

126 000 more children, many from disadvantaged backgrounds, can now access early childhood education and care, thanks to the passage of the Early Childhood Education and Care (Three Day Guarantee) Bill 2025.

The Bill replaces what’s known as “The Activity Test” with three days per week of guaranteed access to subsidised early childhood education and care for all families.

The Activity Test is a method of calculating parents’ early childhood education and care subsidy based on the number of hours they work, study or volunteer.

It has long been criticised by experts as a “broken policy” which predominantly excludes disadvantaged children from accessing early education by discriminating against single mothers and parents in insecure or precarious employment.

The Parenthood celebrates its removal as a momentous step towards universal early childhood education and care in Australia and an historic win for parents, particularly mothers.

“The Activity Test was designed to incentivise parents to work but in fact it does the opposite,” said Ms Dent.

“It is completely misaligned with the reality of looking for work when you have a young child. Parents looking for work need care for their children to apply for jobs. But because they’re looking for work, they can’t afford care – which currently averages around $137 per day before subsidy – because they can’t demonstrate enough “activity” in order to receive fee relief from the government. 

“As a result, at least 126 000 children – many from low-income, First Nations or single parent families – are excluded from receiving early childhood education during their most formative years, entrenching inequality and costing the government more.

“There is a mountain of evidence showing that early childhood education and care helps children to perform better at school, makes them more likely to finish school and attend university, and less likely to engage in crime or be reliant on our health and social welfare systems.

“Likewise, family budgets and the economy benefit with the removal of the Activity Test, with 40 000 more women estimated to be able to go back to work or increase their hours and earning, should they choose.

“A single mum who may be struggling with employment should not be punished for trying to give her child the best start in life.”

Reforming or removing the Activity Test has been recommended by the Productivity Commission, Australian Competition and Consumer Commission, Business Council of Australia and dozens of other organisations.

“We extend our most sincere congratulations to the Government for passing this Bill and eagerly await working with any future Government on its rollout.

“We also congratulate the Greens and Independent candidates for helping pass this vital piece of reform.

“With a wage rise for educators, an election commitment for more early learning centres in underserved communities and the removal of the Activity Test, we are well and truly on our way to a universal early learning system.

“The next step should be a $10-a-day cap on out-of-pocket fees, in order to deliver much-needed cost-of-living relief to families,” said Ms Dent.