That ICPA (Aust) advocate to the Minister for Early Childhood Education and Care and Minister for Education to urgently review and reform the In Home Care (IHC) Child Care Subsidy Hourly Rate Cap to ensure: 1. Remote and geographically isolated families can access lawful, affordable childcare, and 2. Educators are paid in accordance with the Children’s Services Award and recent Fair Work Commission gender undervaluation decisions.
Families in remote and isolated areas of Australia have little to no choice in childcare type or provider. In many cases, In Home Care is the only available option. Recent Fair Work Commission decisions to address the gender undervaluation of care work have increased award wages for educators. However, the IHC Hourly Rate Cap has not been adjusted to reflect the true cost of lawful employment. This has created a structural problem across the sector. The current impact on Remote Families and Educators under current settings are that families are forced into one of three outcomes: pay significantly higher gap fees to ensure educators are paid lawfully, often making care unaffordable, engage services using contractor-style arrangements, where educators are paid below lawful entitlements or use unqualified educators under Minister’s Rules provisions, despite a preference for qualified Diploma-level educators. For many families, there is no genuine choice. They are aware of underpayment risks but feel compelled to prioritise affordability and access to care. The systemic issue is that the current IHC funding model ties educator wages directly to family affordability. Where the price cap sits below the cost of lawful employment, the system produces predictable outcomes: Educator wages are suppressed, sham contracting practices persist, families carry unsustainable gap fees and providers face pressure to exit the sector or operate non-compliantly. This issue has been identified repeatedly in national reviews and is well known to government yet remains unresolved. Regarding equity the concern is that the IHC workforce is predominantly young and female, often working alone in isolated environments under highly controlled and regulated conditions. Despite this, many are: paid below Award rates, required to operate under contractor arrangements that reflect employment in practice and unable to raise concerns due to fear of losing work. This directly undermines the Government’s commitment to gender equity and fair pay in care sectors.
To address these issues the government needs to:
• increase the IHC CCS Hourly Rate Cap to reflect the true cost of lawful employment under the Children’s Services Award
• Ensure funding settings align with Fair Work Commission wage decisions, including gender undervaluation reforms *
• Remove the financial incentive for sham contracting practices within the IHC sector
• Restore genuine choice for remote families, allowing them to engage qualified educators without facing unaffordable gap fees
The outcomes will be a sustainable In Home Care system where:
• Families in remote Australia can access affordable, lawful care
• Educators are paid correctly and safely
• Providers can operate compliantly without financial compromise
• Government policy on gender equity is consistently applied across all childcare settings.
