Louise Black has seen the good and the bad sides of out-of-home care.
Foster caring was common among the Catholic community in south-east Melbourne in which she grew up. The family over the road regularly fostered children, while also having four of their own. Black’s father, on the other hand, had been a ward of the state and spent much of his boyhood in some of the most notorious group homes.
So when Black found herself in a position of financial security a couple of years ago, she signed up to become a foster carer herself.
Financial security turned out to be a necessity.
“When the children come to you, they come with nothing,” Black says. “No pyjamas, no underwear, no clothes … You’ll have to just basically make a run to a late-night Kmart and buy them basics like toothbrushes and underwear … I’ve had to go out and buy a high chair.”
Foster and kinship carers are eligible for some Centrelink payments and are given a fortnightly care allowance by the state government. But the state payments in particular are very low, and frequently late.
“That’s meant to cover everything – so clothes, food, transport, medical expenses … Everything is supposed to come out of that,” Black says. “I did a weekend of respite back in May, and I’ve only just got that $137 now, like literally last week.
“Often, you get these small children and they have never seen a dentist. They haven’t had vaccinations … Kids whose teeth are falling out at three years old – you’ve got to get them seen straight away. You can’t wait for public dental lists … Carers are dipping into their own pockets for those medical appointments.”
For years, carers have been raising the alarm about the yawning gap between the care allowance and the actual costs of looking after children.
That gap has now been quantified, with a report from the Australian Institute of Family Studies (Aifs) finding that carer allowances around the country fall “significantly short of a meaningful contribution” to children’s care and urging they be increased as soon as possible.
Aifs estimated the direct costs of supporting children in out-of-home care, for different family structures, to achieve the same standard of living as other children. Those budgets were compared to the 2024 minimum weekly care allowance rates, which ranged from $231 in Victoria (the lowest) to $359 in the ACT (the highest). The national average was $292.
For a single adult working full-time, raising an eight-year-old girl in out-of-home care in 2024 cost an estimated $850 a week, the Aifs report found – four times Victoria’s minimum care allowance and three times the national average.
The estimated costs are “frugal budgets without luxuries or wastage”, the report says, and “reflect the minimal amount needed to meet basic needs for a healthy life, across all life domains”.
The report was commissioned by the federal government as part of a 2023 strategy, and completed in December last year, but not released until 14 August – after the Foster Care Association of Victoria (FCAV) had sought access to it through a freedom of information request.
A spokesperson for the federal Department of Social Services told Guardian Australia the report was not able to be published until engagement with all state and territory governments and Aboriginal and Torres Strait Islander stakeholders had been conducted.
“We are carefully considering the findings and recommendations from this very substantial report,” the spokesperson said, adding the 38 recommendations represented “broadscale reform of the care system” and required “close evaluation and in many cases, collaboration across the jurisdictions”.
“We want to ensure children and young people in out-of-home care receive the support they need to thrive, and this includes ensuring their carers are equipped to provide stable, safe, and nurturing homes,” the spokesperson said.
FCAV’s chief executive, Sam Hauge, says the report puts a dollar figure on what foster carers have been telling them for years.
“Victoria is relying on carers’ own income and savings to meet the cost of caring for children for whom the state has financial responsibility,” Hauge says.
“When the allowance covers just 27% of the minimum cost of care in some circumstances, we are not talking about a small funding gap. We are talking about foster carers personally subsidising the foster care system.”
A Victorian government spokesperson said the 2026 state budget allocated $14.9m over four years, and $3.9m ongoing, to deliver cost-of-living relief for foster carers, and that carers “play a critical role in caring for and providing a nurturing environment for children and young people who cannot live safely at home”.
But in June, the Victorian auditor general found the department was not fully meeting the needs of children in out-of-home care, and recommended a review of existing care allowance levels. The Department of Families, Fairness and Housing accepted this recommendation in principle only.
Extra strain on kinship care
Kinship carers – usually relatives or family friends of the child in care – are under particular financial strain, the Aifs report found. They are often older (frequently grandparents), already on low incomes and taking on caring responsibilities unexpectedly and with less preparation. They are also subject to other inequities, such as more limited access to information, different procedures and less access to support regarding payments – all of which are more acute for First Nations carers and those from culturally and linguistically diverse backgrounds.
Kinship carers are also more likely to receive lower payments than foster carers, despite being eligible for the same support.
The Aifs report recommended the federal government work with states and territories to develop nationally consistent minimum care allowance rates, assessments for child needs, and guidance for approving higher rates of the care allowance.
Anne McLeish, the director of Kinship Carers Victoria, says a review of the payments is long overdue.
“One of our biggest criticisms is that kinship carers are almost always put on level one, the lowest level of payment, and we know that children’s health needs are usually higher than that,” she says.
“The payments tied to the health needs of children and young people in care needs urgent review, with children’s health needs on entry into kinship care being under-diagnosed and therefore underfunded.”
Kinship carers made up 88% of all placements in June 2024, and their numbers are growing at the same time as more and more foster carers exit the system.
Emily* was a single mother to two teenagers with disabilities and working full time in a public service-adjacent role when she suddenly became the kinship carer of a one-year-old and three-year-old in her extended family last year.
“I had to stop work overnight, basically,” Emily says. The carer’s payments took a month to start, she says, and she was never reimbursed for things like a car seat or a cot.
Emily cared for the children for six months until the court ordered they be returned to their parents. Emily’s carer payments ceased then, but she says her caring duties haven’t stopped.
“I have them three nights a week … [at one point] I had the youngest for 12 days,” she says. “Nothing has changed but now I’m just not getting the financial support.”
* Name has been changed
