The Victorian Auditor-General's report Out-of-Home Care Services was tabled in Parliament on 4 June 2026 and provides important insights into the experiences of children and young people in care and the growing pressures facing Victoria's out-of-home care system.
The audit found that the Department of Families, Fairness and Housing (DFFH) is not fully meeting the needs of children and young people in out-of-home care and cannot consistently demonstrate whether children are receiving the services they need or whether those services are improving outcomes.
The findings reinforce the importance of ensuring children and young people in care can access the services and supports they need, while recognising the critical role foster and kinship carers play in supporting children's wellbeing, stability and development.
The report notes that Victoria's increasing reliance on kinship care has occurred alongside a decline in foster care capacity. While kinship care should continue to be prioritised where it is safe and appropriate, foster care remains essential when kinship placements are not available.
As at June 2025, more than 81% of children in home-based care were living with relatives or kin. Over the same period, active foster carer households declined by 18 per cent. The audit notes that DFFH has repeatedly advised government that declining foster carer numbers present a significant risk to the stability and capacity of Victoria's out-of-home care system.
The report also highlights the continued overrepresentation of Aboriginal and Torres Strait Islander children and young people in care, who represent 31.2% of all children and young people in care. These findings reinforce the importance of Aboriginal-led responses that support connection to family, culture, Country and community.
The VAGO report made five recommendations to the Department of Families, Fairness and Housing (DFFH).
Strengthening foster and kinship carer recruitment and retention, including reviewing the adequacy of care allowances.
Improving monitoring of foster carer data to better understand carer availability, retention and future placement capacity.
Ensuring sufficient placement capacity across the system to meet the assessed needs of children and young people.
Addressing data quality issues and improving information systems to support safe and timely placement decisions.
Strengthening demand forecasting and planning to better respond to future service and placement needs.
A significant focus of the audit was the adequacy of Victoria's care allowances. The report found that DFFH has repeatedly advised government that current allowance levels do not adequately reflect the costs of caring for children and that financial pressures can discourage carers from continuing in their role.
The audit identified low care allowance levels as one of several factors affecting foster carer recruitment and retention, alongside limited support services and training opportunities. It also found that DFFH does not have reliable information to determine whether care allowance levels accurately reflect children's needs and identified inconsistencies in the application of care allowance policies.
Victoria continues to have the lowest base care allowance in Australia. VAGO concluded that strengthening care allowances forms an important part of addressing capacity pressures across Victoria's out-of-home care system. The Victorian Government has accepted this recommendation in principle.
Overall, the report provides a clear roadmap for strengthening support for children and young people in care, improving placement capacity, supporting foster and kinship carers, and ensuring the system is equipped to meet future demand.
FCAV supports all five recommendations and considers their implementation critical to strengthening placement capacity, improving outcomes for children and young people in care, and ensuring carers receive the support they need to continue providing stable, quality care.
