One in three families are yet to sign up to the federal government’s new childcare subsidy despite the system being due to start next month.

Data shows that with the changes set to kick in on 2 July, about 350,000 families are yet to sign up.

The federal education minister, Simon Birmingham, was out selling the subsidy on Monday, saying 800,000 families had switched over.



The childcare subsidy, introduced to parliament in 2016, replaces two existing payments — the childcare benefit and childcare rebate. The payment will be subject to a means and activity test, meaning parents have to be working, volunteering, studying or looking for work to be eligible.

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The test links fortnightly parent hours of study, work or volunteering – averaged over three months – to the number of hours subsidised.



The government has said families will be, on average, about $1,300 a year better off because of changes to the childcare rebate cap. “They’re going to see that cap abolished if they’re a family earning less than around $186,000,” Birmingham told the ABC on Monday.

“So it really is going to make a big difference where families won’t run out of support mid-year and, for many, that is going to enable them to work more hours or days without childcare costs being a prohibitor in doing so.”



But figures released under freedom of information laws this year showed some 230,000 families could be worse off under the scheme. Labor has criticised the subsidy, saying the changes will lead to children from low socioeconomic backgrounds spending less time in early education.

The Community Child Care Association has also criticised the policy, saying the activity reporting is an “unnecessary burden on families and services”.

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But Birmingham said there had been changes to reduce regulation. Providers no longer needed to operate for mandated minimum hours or days a week, he said. That would allow centres to offer shorter sessions.

“These changes are delivering dividends that will benefit Australian families,” the minister told reporters in Canberra on Tuesday.



Parents still have three weeks to sign up, plus a three-month transition period, but Birmingham expects many will wait until the last minute so that they can better estimate their income for the next financial year.



He conceded that some might have faced difficulties transitioning to the system.



“My message to Australians first and foremost [is] take the steps to register and, secondly, if you’re having any difficulties, pick up the phone to ensure you get the help needed to make it as smooth a process as possible.”