Australia's in-home childcare sector faces collapse due to wage rises and funding exclusion
Consensus Summary
Australia’s in-home childcare sector is on the brink of collapse due to the exclusion of providers from a government wage subsidy, which has forced operators to pass on rising labor costs to families. Surveys by the Australian Home Childcare Association (AHCA) reveal 31% of the 23 remaining providers are at risk of shutting down, with 72% of families reducing hours or withdrawing entirely. The sector serves around 800 vulnerable families—including those with seriously ill children, remote residents, and shift workers—who cannot access mainstream care. While the government lifted subsidies to 90% for low-income families and claims it is supporting the sector, critics argue the lack of wage subsidies creates inequity, as centre-based providers receive $3.4 billion annually for worker retention. Families like Ashley Perez in Victoria and Rebecca Mohr Bell in the Northern Territory face financial strain, with some relying on community donations to sustain care. Politicians from the opposition and crossbench, including Liberal Senator Matt O’Sullivan and Greens Senator Steph Hodgins-May, are pressing for urgent action, warning of safety risks for children already in high-risk situations.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- The Australian Home Childcare Association (AHCA) surveyed 23 in-home care operators serving 810 families, finding 31% at risk of closure, 72% of families reducing hours or withdrawing, and 77% of operators reporting educator departures or reduced hours.
- In-home care providers have been excluded from the government’s 15% wage subsidy for childcare workers, which is staged (5% in March 2026, another 5% in July 2026), forcing them to pass costs to families.
- The government’s childcare subsidy rate for low-income families was lifted to 90%, but in-home care providers lack eligibility for the worker retention payment, unlike centre-based operators.
- Families using in-home care include those with children undergoing serious illness (e.g., leukaemia), remote residents, shift workers, or child protection orders, totaling around 800 families nationally.
- Early Childhood Education Minister Jess Walsh acknowledged in-home care’s importance but stated the government is ‘working with the sector’ without committing to extending the wage subsidy.
- The AHCA estimates extending the subsidy to in-home care would cost $6.3 million annually, compared to the $3.4 billion spent on centre-based wage subsidies.
Points of Difference
Details reported by only one source:
- Ashley Perez, a mother of three from Lara near Geelong, Victoria, relies on in-home care for her daughters Emilia (7) and Alyssa (5), both undergoing leukaemia treatment, and warns a sector collapse would put vulnerable children at risk.
- Liberal Senator Matt O’Sullivan called for urgent action in Senate Estimates, citing safety risks for children in domestic violence situations or court-ordered care scenarios.
- The Perez family currently pays for two days of in-home care per week but cannot afford more due to medical and living costs, relying on community donations to sustain the service.
- The government’s statement highlighted a 90% subsidy rate for low-income families and claimed it was ‘reducing the amount families paid,’ though this does not address wage subsidy exclusion.
- Rebecca Mohr Bell, a cattle farmer in the Northern Territory 100km southwest of Katherine, has relied on in-home care since 2018 and faces unaffordable gap payments after subsidy, risking reduced educator hours.
- The Productivity Commission’s 2024 report found the hourly rate cap for in-home care does not cover operating costs and recommended a review, noting only 25% of 3,200 places are filled (down from 37% in 2022 and 59% pre-2018).
- Greens Senator Steph Hodgins-May cited families including nurses, doctors, and remote cattle station parents as ‘at breaking point,’ with some forced to unenroll due to costs and administrative burdens.
- The Guardian noted that up to 50% of families could withdraw from in-home care after the July 2026 wage increase, accelerating provider closures.
Contradictions
Conflicting information between sources:
- The ABC states the AHCA found 77% of operators reported educators given reduced hours or had left, while the Guardian reports a 30% reduction in hours across the sector without specifying the percentage of operators affected.
- The ABC claims ‘not a single childcare operator’ in in-home care says they are financially viable, while the Guardian states ‘nearly one in three’ (31%) are at risk of closure, implying some may still be viable.
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The little-known publicly funded scheme is used by about 800 families with children who cannot access mainstream care Get our breaking news email , free app or daily news podcast 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, inclu