Victorian foster carers have faced growing financial pressure over many years, as the cost of caring for children has increased while the care allowance has failed to keep pace with the real costs of care.
A major new national review has now provided further independent evidence of the urgent need for reform, quantifying the significant gap between the financial support provided to carers and the actual cost of providing care.
The Foster Care Association of Victoria (FCAV) has long campaigned for a substantial increase to Victoria’s foster care allowance, including through the Care Allowance Campaign run jointly with PCA Families.
The Australian Institute of Family Studies (AIFS) Review of payments for foster, kinship and permanent carers examined the adequacy of care allowances across Australia.
The FCAV thanks the carers who shared their experiences as part of the review, helping ensure the realities of providing care were represented in this important national work. The FCAV contributed to the review (see Formal Submission below) alongside fellow members of the National Foster and Kinship Care Collective, with carer associations across Australia advocating for fairer and more adequate financial support for carers.
For one modelled Victorian household, the review found that Victoria’s base care allowance covered just 27% of the estimated minimum cost of caring for an eight-year-old for a full-time working single carer.
Even when the maximum Commonwealth family support payment was included, only 48% of the estimated cost was covered, leaving a $442-a-week shortfall, equivalent to around $23,000 a year.
Victoria currently has the lowest base foster care allowance in Australia.
We have known for years that Victoria’s foster care allowance does not cover the real costs of care. What this report provides is a measure of just how large that gap is. An allowance that covers barely a quarter of the estimated minimum cost in some household circumstances cannot reasonably be considered adequate.
More than 4,300 carers and supporters have called for change
The findings reflect what Victorian foster carers have been telling the FCAV and PCA Families through the Care Allowance Campaign.
The campaign has now received more than 4,300 submissions, with carers repeatedly describing the financial pressure created when the allowance does not meet the actual costs associated with caring for a child and what that implies for how valued they are in their volunteer role.
One carer described how financial pressure had changed the care their household could provide:
“The rise in living expenses and day to day living, compared to the reimbursement levels has meant we only do respite care now, as we cannot afford to have the young people full time.”
Another carer said:
“Carers are continuing to give their all to our most vulnerable children, and this can place significant financial strain on families given the current financial climate. Increasing the carer allowance would go a long way to easing this burden, while also demonstrating to carers the value we place on all that they do.”
These are not isolated experiences. Carers have told us again and again that they are paying the difference themselves to detriment of their household’s capacity to continue providing care. The AIFS research now independently quantifies the scale of that gap.
FCAV Carer Census reinforces the findings
The findings are consistent with FCAV’s 2026 Carer Census that shows:
43% of carers identified inadequate care allowance as a challenge
31% identified inadequate funding for children’s expenses
20% identified loss of income or superannuation
Victoria cannot continue to rely on the personal income and financial resilience of carers to make the system work. The financial pressures identified by AIFS and the FCAV come as Victoria continues to face significant challenges retaining enough foster carers to meet demand. In 2023–24, 429 Victorian foster carer households exited foster care while only 162 commenced.
FCAV calls for urgent action
The FCAV is calling on the Victorian Government to substantially increase the base rates of foster care allowances, with immediate progress towards the recommendations in the AIFS report. Victoria needs to reset the base rate against evidence about what caring actually costs, then protect that rate through appropriate indexation and regular review. The evidence is now overwhelming. When care allowances fall this far short of the real cost of care, carers are left financially disadvantaged, some are forced to reduce or stop caring, and the system becomes less able to provide children with the stable homes they need. That is not an acceptable way to fund Victoria’s home-based care system.
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The Australian Institute of Family Studies Review of payments for foster, kinship and permanent carers was commissioned under Safe and Supported: The National Framework for Protecting Australia’s Children 2021–2031.
The FCAV made a formal submission to the AIFS review, drawing attention to the inadequacy of Victoria’s care allowance and the financial contribution being made by foster carers.
The 2026 FCAV Carer Census was conducted by ORIMA Research on behalf of the FCAV and gathered responses from more than 680 current and former accredited Victorian foster carers.
