Major childcare providers warn they may need to turn children away under the government's free childcare package as they struggle to operate with half their usual revenue.

Childcare providers are paid 50 per cent of their revenue by the government and cannot charge parents extra under the free childcare scheme introduced this month, with funding based on enrolment levels before the mass exodus of children at the start of March amid concerns about coronavirus transmission.

But as parents have started returning their kids to childcare as the number of new coronavirus cases falls, some providers have said the reduced income means they cannot accept children back.

Matt with his son, aged 4, who has been turned away from their childcare centre, near their Maroubra home. Credit:Louise Kennerley

Maroubra working parents Monique and Matt have been keeping their four-year-old son at home from childcare. "We're starting at 7am and working through the night, it’s exhausting," Monique said.