A national nanny subsidy pilot scheme has been unwound after less than 5 per cent of the available places were taken.

The trial was announced last year by Treasurer Scott Morrison (Social Services Minister at the time), originally designed to help 4,000 families to access mainstream child care.

In the first months of the scheme 3,000 families applied, but only 60 signed on. At this point the Government cut $170 million from the $246 million trial.

By the end of last year just 213 families had joined up, only a fraction of what was expected and budgeted for.

It has now been trimmed back, with the number of places capped at 500 ahead of the program winding up mid-2018.

The Australian Nanny Association and some participants in the scheme criticised it for actually being more expensive for some families.

“I found that the nanny program was going to increase my cost of child care from $24.50 up to $43 an hour,” Erin Fitzgerald, a full-time working mum, told the ABC.

“There was a small rebate taken off of that, and the net cost was going to end up somewhere in the order of $35-$36 an hour — so I was going to be worse off.

“It was just more expensive than using babysitters and other informal child care,” she said.

Federal Education Minister, Simon Birmingham, defended the scheme.

“This niche program was designed to see whether there was good support that could be provided in an effective way for people who fall out of being able to access regular child care, because of the hours they work or where they live,” he said.

“We'll evaluate it at the end of the pilot.”

Kate Ellis, Shadow Minister for Early Childhood, slammed the program.

“There's no question that this was deeply flawed program,” she said.

“Originally this was a program that the Government promised 10,000 children could participate in, so we can see the program has been a failure it's been an expensive failure.”