That ICPA (Aust) continues to advocate to the Minister for Early Childhood Education, as the Federal Government commences the ECEC Commission, that the IHC system be reformed to fit remote realities.
Where no other ECEC services are viable, IHC stands as the gateway to children’s development and parents’ workforce participation. The IHC system was designed as a catch-all to serve three distinct groups: complex needs, parents working non-standard hours, and geographic isolation. In trying to cater to all, it has failed to respond adequately to the specific realities of any.
Children in remote areas are more likely to be developmentally vulnerable with an ineffective ECEC system preventing children from accessing care or hindering the quality of care. Cunnamulla has 64% of children starting school developmentally vulnerable according to AEDC data and having increased by 16% between 2021 - 2024. These communities are also vulnerable with these parent’s juggling childcare with keeping vital sports, cultural activities and social connections alive through extensive volunteering.
Two Cunnamulla case studies, among many others, from the 2023 Choiceless report offer a window into the real-life experiences of these families — stories that reveal how starkly childcare needs differ from the city, and how the current system doesn’t meet them.
How can it be fixed?
The challenges are not new—and they are not unknown. Reviews by the Department of Education (2023 IHC Review) and the ACCC (2023 Childcare Inquiry), submissions by the ICPA and the Choiceless report by The Parenthood, have all recognised that a more tailored approach is overdue to consider the needs of the three cohorts which stands to benefit all three cohorts, not just isolated children. System change provides the opportunity to consider the core outcomes and the environment in which it will operate, implementing improvements that address challenges at their roots.
1. Engage rural stakeholders: As the Government considers the findings from the review and inquiry, it must improve stakeholder engagement. The challenges have been long term, and the childcare needs are complex in regional Australia. Remote families are solutions focused, understand their communities and can support good decision making. Their advocacy organisations are small and often volunteer run, relying on being given a seat at the table. This must not exclude their vital contribution to system reform. Inclusion of the ICPA should be a bare minimum.
2. Move forward with recommendations to tailor the IHC system: For agricultural families that are geographically isolated, the major challenges with IHC and their causes are discussed below.
Costs
High service provider fees (ineligible for CCS) are passed onto families in addition to the already higher “gap” between CCS and educator fees. Costs can be reduced by ensuring employment models, including the role of service providers, are designed to minimise or remove ambiguous, unnecessary, unclaimable fees, and additional costs (board, meals and travel) are addressed. Subsidies such as the worker retention payment must also be extended to include IHC, not just center-based care.
In 2023, IHC fees rose by $25/day (compared to $13/day for centre-based care and more than any other ECEC model), with out-of-pocket expenses around 25% higher (excluding food, board, and travel). This is compounded by few rural providers (ACCC) and costs like service provider fees not covered by the CCS.
In late 2025, costs rose further with the Government approving only a 2.39% increase to the IHC hourly rate cap while the actual increase will include a 3.5% educator wage increase (plus rising superannuation, insurance and payroll tax). One service provider also quoted a 4.5% increase to their systems like compliance and timesheet platforms as well as 2026 wage increases for educators, suggesting the rate cap would need to increase by $17/hour (30%) to reflect the actual cost of safe, high-quality care. This provider stated, “These increases mean we are now forced to pass on higher fees to families.”, citing support from reviews by ACCC, WWC, ACECQA and Dandolo.
Under the current IHC system, families must use a service provider to access CCS, despite providers charging fees that can exceed $10,000 a year, offering limited transparency between fee structures, and ACCC reporting that many providers are not very profitable. While providers formally employ educators, rural families often handle recruitment, supervision, timesheets, accommodation and day-to-day management themselves. As many farming families already run businesses and manage staff, payroll and WHS obligations, they are well placed to directly employ educators. Allowing this could reduce costs for families, improve provider sustainability by refocusing their role on quality assurance, and lower overall childcare costs for government and families alike.
Administration
High administrative requirements do not consider the long-term stability but day-to-day variability of agricultural families in IHC. Administrative burden can be reduced by design of processes that match the realities of the cohorts, for farming families, minimal long-term change with day-to-day flexibility.
For farming families, home and work are one and the same, that is, the farm. Farming demands long hours and unpredictable work tied to weather, livestock and seasonal pressures like harvest and shearing, often requiring both parents to work at short notice. IHC must reflect this reality by providing flexible support that many families rely on until children leave for boarding school.
Previous IHC system development prioritised consistency, to the detriment of the three distinct cohorts. While the removal of mandatory quarterly reviews in 2025 is a welcome improvement, annual reviews still fail to reflect the stable, long-term needs of geographically isolated families. Providers are also ill equipped to adapt to day-to-day flexibility required in agriculture, including changing hours, shared educators, and educators caring for their own children alongside others. These are practical efficiency measures, not misuse of the system. Implementing the 2023 IHC Review recommendation to increase administrative flexibility could reduce Government costs while improving access, predictability, and flexibility for families.
Workforce
Specific recruitment, skill and retention characteristics for educators in agricultural families are not considered by the IHC program, exacerbating workforce shortages. Workforce attraction can improve through employment models more suited to the demographic of the workforce, eligibility requirements are considered to prioritise quality of care, realistic and reasonable work scenarios are considered such as sharing educators in remote settings, and training pathways exist for the relevant demographic such as remote study for working holiday makers.
The 2023 IHC Review noted workforce shortages as a major barrier to access, with challenges varying across cohorts. Agricultural families often rely on gap-year students or working holiday makers, yet current eligibility and compliance requirements are impractical for remote settings and place greater value on formal qualifications than quality of care. Many providers also favour contractor arrangements to remain financially viable, despite young educators reporting concerns about being “handballed” the administrative burden and insecurity of this model. The recent introduction of mentored pathways for remote educators is a positive step, but further workforce growth could come through visa and remote training pathways aligned with IHC.
NFF and other agricultural advocacy bodies demonstrate the need for agricultural visas, and childcare needs should be considered as interlinked pillars for rural economic viability. Consistent with ECA’s call for place-based workforce solutions, reducing barriers to educator entry in undersupplied regions, is critical to ensuring rural families can access childcare.
Subsidy
Volatile farm income can leave families out of pocket. Removing unpredictability from CCS income test by using previous year’s income as per ATO management of farm income variability.
Variability of income for farming families is well acknowledged, with the taxation systems allowing for 5 year averaging to support a fairer assessment. The CCS is calculated in advance, however based on estimated annual income for the coming year. Estimating farm income is hugely challenging and inaccurate, meaning families can become ineligible after utilising the IHC system. Should this occur, families may have already paid over $10,000 in fees they could have avoided had the eligibility system provided more certainty.
