Parents could receive a single childcare payment instead of two as part of the federal government's forthcoming families package.
Social Services Minister Scott Morrison says the idea of rolling the childcare benefit for lower-income families and the non-means tested rebate into one would make the system much simpler.
"I think it makes an enormous amount of sense," the minister told a childcare forum in Sydney on Thursday.
Earlier this year, the Productivity Commission recommended the combination of the child care benefit and the child care rebate into a single subsidy known as the early care and learning subsidy.
The minister said the government would introduce a broad-based subsidy system, overlaid by a "safety net package" targeting disadvantaged families likely to be at risk of welfare dependency.
But he's dismissed the idea of tax breaks as an alternative to payments, saying it won't help lower-income families into work and will only deliver subsidies to the wealthy.
"It's a very expensive way of not achieving your outcome," he said.
His comments came as Liberal senator Cory Bernardi backed a Nationals plan to give extra tax breaks to families in which just one parent works.
The South Australian said doubling the tax-free threshold for two-parent families with a single income might not be a perfect solution but it would reduce inequity, cut down the "money shuffle" of childcare rebates and be cheaper to administer.
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