The Turnbull government is considering breaking up its family payments legislation to get some savings through Parliament, with Labor opposing most of the package and support from the crossbench looking shaky.
On Tuesday, Labor announced it would oppose the bulk of the Coalition's revamped family package, including proposed cuts to payments for single parents and grandparent carers and the abolition of end-of-year supplement payments to the 1.7 million families who receive family tax benefits.
Labor leader Bill Shorten said the party would only support the government's bid to lower the age at which family tax benefit part B cuts out for couple families, which will save about $485 million over four years.
Currently, families can claim the payment until their youngest child turns 16 or 18, depending on whether they are still at school. The government now wants to lower the cut-off age to 13.
Overall, Labor's position - which also opposes increasing family tax benefit part B by $1000 to families with children under 1 - would save the budget $1.4 billion over four years. This is far short of the $4.8 billion over four years the government's package is expected to save, much of which is earmarked for the $3.5 billion childcare package.
Social Services Minister Christian Porter told question time there was a "desperate need for reform to the childcare system". He said the family payments allowed for the reform as well as some budget repair.
Earlier, Opposition Leader Bill Shorten said Labor did not "support unfair cuts to grandparent carers and single parents".
On Tuesday evening, the government was considering breaking out the Labor-backed family tax benefit cut for couple families into a separate bill in order to bank the saving. It is understood, this could be done as early as this week.
But Labor's position has also increased the government's focus on the crossbench. With the Greens also opposed to the family payment changes, the government would need support from six of the eight crossbenchers to pass the package in the Senate.
With Liberal Democrat David Leyonhjelm the only crossbencher to declare he will vote for the bill to date, support here is not assured.
Independent Jacqui Lambie says she will oppose the family payments package, while other crossbenchers contacted by Fairfax Media either expressed serious concerns about its impact on single parents and low-income families or said they were still undecided.
This came as the Australian Council of Social Service briefed the crossbench on alternative proposals.
ACOSS, which describes the current bill as "unfair", is calling for a package that includes indexing family payments to wage movements, a new payment benchmark for children of primary school age (in addition to benchmarks for preschool and high school children) and streamlining and boosting payments for single parents.
"Family payments play a vital role in combating poverty, yet if the government's bill is passed it is likely that child poverty will increase," ACOSS deputy CEO Tessa Boyd-Caine said.
"We have proposed a more balanced family payments reform package."
Family tax benefit part A is paid per child, with the amount based on a family's income and the age of the child. Family tax benefit part B is paid per family and provides extra assistance to single parents and families with one income.
