Childcare services across the country say they're crippling under pressure, after a federal government mandate to ensure staff are better paid.
They say there are issues with the way the money is calculated, and could be forced to increase their fees or close down altogether.
The government grant ensuring Australian childcare educators are paid what they deserve has come at a cost for providers.
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"These are not the big players, these are the family owned centres that are saying we don't know what to do," Craig Ryan the director of Kids Active told 9News.
The grant is based on the number of children who attend centres and the hours of care.
According to providers, there's a gap between the cost of staff wages and what the federal government covers, forcing them to cover the difference.
"I have to trade up the financial sustainability of the centre and having too many staff," Ryan said.
"It should just be a simple calculation - I can show you what I've paid for salaries, compensate me for what's over."
Since the grant was introduced 12 months ago, the federal government says around 15,000 workers have either started or returned to the sector.
"The changes that we have made, have meant that the average educator gets about an extra $200 week in their pocket," Assistant Minister to the PM, Patrick Gorman, said.
"That's a good thing."
Owners of Eden Early Learning say they've had to take drastic measures just to stay afloat, including reducing staff numbers right before Christmas.
"The Prime Minister's been very open about his view, that some form of a universal education care system is the sort of model that we want to investigate," Gorman said.
Ryan said he just wants the government to "do right by us, that's all I'm asking".
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