Currently parents can choose to opt out of vaccinations for medical or religious reasons, or by stating they are "conscientious objectors," and still receive taxpayer funded child care benefits.

Under the new "no jab, no pay" policy, the exemption as a conscientious objector will be removed starting January 2016.

"The choice made by families not to immunize their children is not supported by public policy or medical research nor should such action be supported by taxpayers in the form of child care payments," said Abbott in a joint statement with Social Services Minister, Scott Morrison.

Thousands of families could lose out on welfare payments, with the Australian government estimating more than 39,000 children under the age of seven have not been vaccinated because of their parents' objections.

The number of children in Australia who have not received immunization against measles and other diseases has almost doubled in the past decade, according to the government.

Anti-vaccination campaigns have recently gained traction in Western countries. Some parents believe the shots cause autism, but the theory has been widely discredited.

Existing exemptions on medical or religious grounds will continue said Abbott, but guidelines on religious exemptions will be tightened.

"It requires the formal position of that religious body being advised to the government and approved by the government. This is a very significant narrowing," Morrison told reporters in Sydney on Sunday.

He added that no mainstream religious organizations have made any formal objection to immunizations.

In response to the announcement, more than 7,000 people have signed a petition in opposition to the reforms.