‘Increasingly unsafe’: Australia’s in-home childcare program under threat from rising costs, advocate warns

Rebecca Mohr Bell, a cattle farmer and business owner, lives 100km south-west of Katherine in the Northern Territory, and with three young children, has relied on in-home childcare since 2018.

The little-known taxpayer supported program is used by about 800 families with children who cannot access mainstream care, including because they live in remote locations, have serious illness or a disability, or because their parents work unusual hours.

Mohr Bell and her husband have a full-time live-in childcare educator, but recent cost increases not covered by the government have left her family in a difficult situation. She said her gap payments after receiving the childcare subsidy have skyrocketed in the past two years due to the rising cost of accommodation and wages.

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“It’s just going to mean it becomes unaffordable. I just can’t afford to do it or I’ll have to cut the hours for my educator which is not really feasible either,” she said.

“We’re not asking for anything special. We’re just asking to be treated equitably and ensure that our children have got access to the same quality of childcare that children in metropolitan [areas] have.”

Nearly one in three childcare operators providing last resort services for regional and remote families, and children with disabilities and other complex needs say they are at risk of shutting down, warning government-funded pay rises for workers in mainstream childcare centres must be extended to in-home care.

Workers in the program have been excluded from the federal government’s childcare worker retention program, which will increase wages by more than 15%, staged over two years. That cost is instead being absorbed by families, who are reducing hours or leaving the system altogether.

A survey of providers by the peak body found 31% said they are now at risk of closure, with more than half declaring they are operating “under significant pressure”.

The survey of 23 providers, which service 810 families, found some services were concerned that after the next wage increase on 1 July, up to 50% of families could withdraw from the program, and the services could be placed on a “direct path to closure”.

Already, the sector says it has seen a reduction in hours of more than 30% and almost three-quarters of providers have seen families reduce hours or withdraw entirely.

The sector’s peak body, the Australian Home Childcare Association (AHCA), said providers on already thin margins were being forced to pass on the wage increases to families, many of whom are “the most vulnerable in the country”.

“The majority of the families we support come from complex medical, child protection, and high-risk backgrounds. These are not families who can transition into mainstream care,” said in-home care provider and AHCA president, Nicole Morgan.

“Services will close. Families will lose care. Educators will exit the workforce. And children – already identified as vulnerable – will be left in increasingly unsafe and unsupported environments.”

Advocates have already warned the government the in-home care program is expensive, difficult to access and carries high administrative burdens on families. Just a quarter of the program’s 3,200 places are filled – in 2022, 37% of places were filled, and before 2018, 59% of 3,000 available places were used.

A 2024 report by the productivity commission, found the hourly rate cap for in-home care did not adequately take into account operating costs and recommended it be reviewed. In-home care is more expensive than centre-based care due to higher qualification requirements and lower educator-to-child ratios.

Greens senator Steph Hodgins-May said she has been contacted by families including nurses and doctors working shifts, parents of children with cancer and families on cattle stations “hours from the nearest childcare centre, who are all at breaking point”.

“Some have had to unenroll from care because they simply can’t afford to stay in the system. All the red tape just to enrol in in-home care means the program is going underused, and even those who get in are being priced out,” she said.

“Instead of expanding to offer real choice to those who need it, the sector is fighting for survival.”

The childcare minister, Jess Walsh, would not commit to increasing funding for the program, and said families using in-home care are already supported by the childcare subsidy.

“I know that in-home care is important to the around 800 families who use it and who, for a range of reasons, can’t participate in centre-based care.”