A29: Cunnamulla Branch (QLD)

Early Childhood Education and Care
Motion:

That ICPA (Aust) continues to advocate to the Minister for Early Childhood Education to act on recommendations from the 2023 In Home Care (IHC) review, The Parenthood’s Choiceless report, and the ACCC 2023 Childcare Inquiry, and develop a tailored In Home Care (IHC) system for geographically isolated families that effectively delivers fit for purpose, financially sustainable, quality Early Childhood Education and Care (ECEC) to rural and remote families.

Explanation:

The 2023 IHC review highlights that the current system fails to address the unique needs of geographically isolated families. This cohort, predominantly farmers, faces higher costs and logistical challenges. A more tailored system can lower costs, improve care, and ease the administrative burden for families and providers.

This matter is urgent as the Childcare Inquiry 2023 identified that IHC daily fees increased by twice as much as childcare centres (approximately $25 per day increase compared to $13) and out of pockets remain approximately 25% higher for IHC families, not including additional expenses like travel, board, and food, between 2022-2023.

Key Challenges:
• High Provider Fees: Geographically isolated families face out-of-pocket costs that are exacerbated by high provider fees. The Childcare Inquiry 2023 found that IHC fees rose significantly more than those of childcare centres, leaving families with higher out-of-pocket expenses. Despite high fees, the Childcare Inquiry 2023 also found profitability of IHC providers and earnings of educators are low.

Case Study:
Families are required to use a third-party provider to utilise their Child Care Subsidy (CCS). These providers charge fees to families and these fees are not covered by the CCS. A 2025 quote from a provider included over $10,000 in annual fees. In this case study, the CCS was 26.66% of eligible costs (excludes the $10,000 in fees). For a 37.5 hr working week on the lowest pay rate for an educator, the cost would total approximately $1530 per week. $408 of this would be covered by the subsidy but an additional $193 per week in fees would also be charged, negating almost half the subsidy. This fee structure effectively reduces the subsidy, effectively creating a base gap fee of $5.15/hour.

• Administrative Burden:
The IHC system is overly rigid and requires frequent administrative updates, which are inefficient for families with stable, long-term care needs. The 2023 IHC review found that streamlining processes could improve efficiency, reduce family stress, and ensure better oversight. The system is unnecessarily inflexible, with example issues including limitations on family members providing care or caring for children from multiple families at the same time.

• Labour Shortages:
The geographically isolated cohort for IHC struggles with recruitment. The typical demographic of educators for these placements are young and inexperienced, and they face complex and unattractive employment conditions. Addressing these challenges is vital to reducing workforce shortages and improving care quality.

Case Study:
A private recruitment service was utilised by a family to help recruit an educator. The family discussed needs with the recruiter and identified the educator would need to be eligible and employed through an IHC provider so the family could claim their CCS. The recruiter expressed reluctance to recruit for IHC positions due to the unfavourable employment structure – noting the typical demographic of educators was a young, female school leaver and the responsibility of setting themselves as a contractor (the model of employment used by many providers) was a large deterrent. A farm business faced a similar issue when a worker with relevant experience, but not qualifications (having cared for children for several years and demonstrating to the farm business a high level of care and shared values with the family), could not be employed through the IHC program. Due to lacking qualifications, the educator would have needed to enrol in a progress an appropriate qualification to meet the eligibility requirements for educators. This was not possible as study VISAs do not allow foreign students to study remotely, which would be inherently required of someone studying an working as an IHC educator for a family accessing the system due to geographic isolation.

• Income Prediction and Financial Uncertainty:
For farming families, predicting income for subsidy eligibility is challenging due to fluctuations in farm income. This unpredictability can result in families paying back significant amounts, while still facing high provider fees.

Case Study:
A farming family weighed the risk of losing subsidy eligibility after a good financial year, having difficulty estimating the next year’s income. They decided not to access the CCS. If they chose to go through the IHC system and found by the EOFY they were ineligible, they would have been required to pay back whatever subsidy they had claimed (likely a minimum of $20,000) and would have also expended $10,000 of nonrecoupable provider fees to have accessed the IHC system. The family instead elected to pay the educator at their own expense (approximately $60,000 per year). At the EOFY, tax planning allowed the family to average their income over 5 years and used other strategies designed to accommodate for the variable income agricultural businesses are known for. This meant they would have been eligible for highest level of the CCS, rather than the lowest or being completely ineligible as they had considered possible when they chose not to use the system.

Proposed Solutions:
A tailored IHC system for geographically isolated families can directly address the challenges of cost, administration, workforce suitability, and financial predictability by aligning program design with the realities of rural and remote life. Such a system would enable:

• Cost Reduction by Recognising Family and Business Capabilities:
Many farming families operate sophisticated businesses and are well-equipped to manage the employment of educators. A tailored system could enable these families to take on employer responsibilities—such as recruitment, risk management, and onboarding—eliminating the need for costly provider-managed employment services. This would significantly reduce fees while possibly retaining provider involvement in areas such as quality assurance and regulatory oversight, where they can offer the greatest value.

• Streamline Administration for Long-Term, Stable Users:
Customised administrative processes would reflect the stable and ongoing care arrangements typical in remote settings. Reducing the frequency and complexity of reviews, allowing shared educator models, and offering more flexible care options (e.g., support for part-family care or multi-family arrangements) would make the system more accessible and sustainable. 

• Address Workforce Suitability and Retention:
A tailored approach would recognise that the IHC workforce in remote areas is often young, annual (gap-year), or from overseas. The system could support these workers through simplified employment pathways (e.g. employer-based roles rather than contractor models), flexible qualification options, and coordination with immigration and training departments to better align regulation with workforce realities.

• Improve Financial Certainty Through Income Flexibility:
By basing subsidy eligibility on prior-year income, a tailored system could protect families from subsidy clawbacks due to income volatility—an inherent part of farming life. This would provide greater financial security and make IHC a more viable long-term option.

Costs and Benefits:
• Government:
While there will be costs to restructuring the system, the government will save by reducing the cost of IHC services, which are currently the most expensive childcare option. This can also reduce the need for proposals such as higher IHC hourly rate caps.

• Providers:
Providers may see a reduction in business for the geographically isolated cohort, but they could focus more on quality assurance and other large cohorts, potentially improving profitability.

• Families:
Tailored systems would reduce administrative burdens and provider fees, saving families time and money.

• Educators:
More attractive employment options, including better support for meeting eligibility requirements, would help retain staff and address workforce shortages.

• Children:
Tailored systems have the greatest potential to deliver what matters most: safe, nurturing, and consistent early education and care for children—no matter where they live. By designing a system that responds to the realities of rural family life, we can remove the barriers that currently limit access and quality. This means children in remote communities will not only have equal opportunity to learn and thrive, but will benefit from care environments that are stable, community-connected, and developmentally enriching. At its core, a tailored IHC system is not just a policy reform— it is a commitment to equity, wellbeing, and the future of Australia’s youngest rural citizens.

CARRIED