• Print

5.0 Introduction

The term 'working age' implies a focus on the labour force. While this chapter does explore 'working'-related issues—namely labour force participation, employment, unemployment and underemployment—it also examines other factors relevant to the working-age cohort such as educational status, family formation and re-formation, home ownership and child care.

More than one-half of the Australian population—53% or 12 million people—are aged between 25 and 64. The size of the working-age population has an impact on the economy as it accounts for a large proportion of the productive workforce—as Australia's population ages, the proportion of all Australians dependent on this workforce will continue to slowly rise.

For most Australians, the working-age stage of their lives is a time for starting and establishing careers, buying a home and raising a family.

Working-age Australians are better educated than a decade ago, with 67% of 25-64 year olds having a non-school qualification.

Labour force participation for this age group has risen over time, particularly for women and mature-age workers, while retirement rates have fallen. While most Australians in this age group have a job (9.4 million), a higher proportion now work part-time.

Even though most Australians own their own homes, the pattern of home ownership has changed over the past decade. The proportion of Australians who own their own homes outright has declined, while the proportion of those who have mortgages has increased. Younger adults and households on low to moderate incomes, in particular, are finding it harder to buy or own their own homes outright.

Access to, and affordability of, child care is a significant issue for Australian families. While, overall, rates of formal child care use over the past 10 years have remained relatively unchanged, the main reason for parents and carers seeking child care is now more likely to be work-related.

This chapter also outlines some of the payments and services provided by governments and community-based organisations to help families with the cost of raising children, to help people gain employment and training, and to assist households struggling to meet housing costs.

5.1 The welfare of our working-age population

Who are the working-age Australians?

There is no universal definition of a 'working age' population—the age ranges often used include 15-64, 20-64, 25-64 and 15-70. For the purpose of this article we have chosen to focus on Australians aged 25-64, reflecting both the higher likelihood that young people aged 15-24 are enrolled in formal study, and the fact that this younger age range is comprehensively covered in Chapter 4 of this report. (For information on working lives of Australians aged 65 and over, see Chapter 5 'Older Australians staying at work'.)

More than half of the Australian population—53% or 12.5 million people—are aged between 25 and 64 (ABS 2014a). The term 'working age' implies a focus on the labour force. While this article does look at the 'working' component—namely labour force participation, employment, unemployment and underemployment—its intent is to present an overall picture of the characteristics that define this population as they move through various life-course pathways. To this end, we will also examine factors such as education, family formation and re-formation, and home ownership.

The working-age population includes the so-called 'sandwich generation'—men and women in their 40s, 50s and 60s who may be helping support teenage children or children in their 20s and 30s who are still living at home, as well as providing care for younger children, ageing parents, and in some cases partners and young children from second and third families as well.

The intense caring responsibilities faced by Australians in this age group are covered comprehensively in two other feature articles in this report—Chapter 2 'Informal carers' and Chapter 5 'Who is looking after our children?'—so are not featured here.

The size of the working-age population has implications for the economy, because it accounts for a large component of Australia's productive workforce. As outlined in Chapter 1 (see 'Who we are') and Chapter 6 ('Ageing and the welfare system'), Australia's population is getting older. Such a demographic change means that as a greater number of workers retire from the labour force, the proportion of all people who may be dependent on those still in the labour force will continue to slowly rise (see Box 5.1.1).

Box 5.1.1: Dependency ratios

A country's dependency ratios measure proportions of the population who may be 'dependent' on others; that is, they are either too old or too young to be in the labour force so may be 'dependent' on those of working age to produce the goods and services that they need. While this article is focused on working-age people aged 25-64, for the purposes of dependency ratios we look at the three most commonly used age ranges for dependency ratios:

  • Child dependency ratio: the number of children aged 0 to 14 compared with the number of people aged 15 to 64 (that is, people of 'traditional' working age).
  • Old-age dependency ratio: the number of people aged 65 and over compared with the number aged 15 to 64.
  • Total dependency ratio: the sum of the number of children aged 0 to 14 and people aged 65 and over compared with the number aged 15 to 64.

Dependency ratios are expressed as a percentage—a higher number suggests less support available, and a number more than 100 implies there are more dependants than supporting people. Dependency ratios do not account for the proportion of people not in the labour force for reasons such as study, disability or caring responsibilities. They also do not take account of the financial independence of people aged over 65, nor do they reflect cost differences in caring for children and older people.

Australia's total dependency ratio has generally fallen over the past 5 decades, from 59% in 1972 to 48% in 2008 and 2009, implying more people being available to provide support per dependant than in the past. However, in recent years the rate has started to slowly rise again and by 2014 had reached 51%. Given current population projections, it is likely that a stabilisation in the child dependency ratio coupled with a rise in the old-age dependency ratio will lead to the total dependency ratio returning to around 60% by 2046 and continuing to rise over the ensuing decades (see Figure 5.1.1) (ABS 2008).

Figure 5.1.1: Dependency ratios, 1972 to 2100

Line chart showing projected dependency ratios from 1972 to 2100 for children and old people, as well as a 'total' ratio. The ratio for children is projected to remain around 30% from 2020 onwards, while the old age ratio is expected to rise about 20% from 2020 to 2100. The total ratio is therefore also expected to rise at a similar rate from 2020 to 2100.

Sources: ABS 2008, 2013c, 2014a.

How educated is the working-age group?

Improvements in educational attainment over recent decades are flowing through to the educational profile of the working-age population.

Of the almost 10 million Australians aged 15 to 74 who held a non-school qualification such as a certificate, diploma or degree in May 2014, the most common levels of highest qualification achieved were a Certificate III/IV (3.0 million people) and a Bachelor degree (2.8 million). About 1.6 million people had an Advanced Diploma/Diploma, 900,000 had a Postgraduate degree, 550,000 had a Certificate I/II and 510,000 had a Graduate Diploma/Graduate Certificate (ABS 2014d).

More than two-thirds (67%) of people aged 25-64 had a non-school qualification in 2014, up from 58% in 2005 (see Chapter 1 'Who we are') (ABS 2014d).

In May 2014, 72% of people aged 25-34 and 70% of people aged 35-44 had a non-school qualification (ABS 2014d). People aged over 55 were less likely than those aged 25-44 to hold such qualifications—in 2014, 57% of people aged 55-64 had non-school qualifications (see Figure 5.1.2) (ABS 2014d).

Women, in particular, have been making large gains in educational attainment. While more men than women aged 25-64 had a non-school qualification in 2005 (62% and 54% respectively), the gap has narrowed over the past decade, with 69% of men and 66% of women having a non-school qualification in May 2014 (ABS 2014d).

Figure 5.1.2: Population aged 25-64 with a non-school qualification, by age group, 2005 to 2014

Line chart showing the proportion of the population aged 25-64 with a non-school qualification, by age group, from 2005 to 2014. The proportion has risen around 5 to 10% for all age groups over the period. The group that most consistently has the highest proportion of non-school qualifications was 30 to 34 (around 60 to 75%). The group with the lowest proportion in every year was 60 to 64 (around 45 to 55%).

Source: ABS 2014d.

Women are now more likely than men to have achieved a higher level of education. While, overall, men aged 25-64 were slightly more likely than women to have a qualification at Certificate III level or above (63% compared with 59%), women were slightly more likely than men to have a Bachelor degree or above (32% compared with 28%) (ABS 2014d).

According to Richardson and others (2014), for women aged 30-49 the changes in educational attainment over the past 30 years are 'striking': 'In 1982, less than 1 in 10 Australians aged 30-49 were graduates, and the female rate (5%) was half that of men (11%). Three decades later, almost one-third of the age group are graduates, and the female rate (30%) is higher than that for men (27%)' (Richardson et al. 2014).

The diversity in education levels of the working-age group is also reflected in different levels of courses being completed by those currently studying for a qualification.

For example, in May 2014, of people aged 25-34, 29% were studying for a Bachelor degree, 22% for a Certificate III/IV and 19% for Postgraduate degree. Among those aged 35-44, fewer people were studying for a Bachelor degree (17%), more for a Certificate III/IV (30%) and about the same (18%) for a Postgraduate degree (ABS 2014d).

Employment of the working-age group

Labour force participation

The proportion of Australians participating in the labour force has been increasing over time, largely because of increases in women's participation and participation of mature-aged workers (Cobb-Clark 2014).

The participation rate of Australians aged 15 and over rose from an annual average rate of 63% in 1992 to 65% in 2014, while the rate for Australians aged 25 to 64 increased from 74% to 79% over the same period (see Chapter 2 'Labour force participation in Australia') (AIHW analysis of ABS 2015b).

Rising participation rates for 25 to 64 year olds overall mask divergent trends between the rates for males and females. From 1992 to 2014, the male participation rate fell slightly from 87% to 86%, while the female participation rate rose from 60% to 72%.

The changing level of participation of women in the labour force is discussed further in this article in the 'Women and work' section.

The increase in the overall labour force participation rate is partly due to increased participation of mature-age Australians. The annual average participation rate for Australians aged 55-64 rose from 43% in 1992 to 64% in 2014, while the rate for Australians aged 65-69 rose from 10% to 26% over the same period (AIHW analysis of ABS 2015b) (see Chapter 5 'Older Australians staying at work').

The rise in both of these older age groups was more marked for women than men—in 2014, the participation rate for women aged 55-64 was 56% compared with 25% in 1992; the rates for men were 72% and 62% respectively. In 2014, the participation rate for women aged 65-69 was 20% compared with 5% in 1992; the rates for men were 33% and 15% respectively (AIHW analysis of ABS 2015b).

Employment

In 2014, nearly 9.4 million Australians aged 25-64 were employed—75% of the 25-64 year old population (AIHW analysis of ABS 2015b).

Working-age men are more likely to be employed than working-age women. In 2014, just over 82% of men aged 25-64 (5.1 million) were employed compared with 68% of women aged 25-64 (4.3 million) (AIHW analysis of ABS 2015b).

A greater proportion of both men and women in this age group are now working than previously. In 1992, 79% of working-age men and 56% of working-age women were employed (AIHW analysis of ABS 2015b).

While men in this age group are now working fewer hours, on average, per week than they did in 1992—38.9 hours in 2014 compared with 41.0 in 1992—the number of hours women work has not changed (28.8 and 28.9 hours per week, respectively) (AIHW analysis of ABS 2015b).

For both men and women aged 25-64, the average full-time hours worked have fallen over this period while the average part-time hours have increased.

In 2014, men aged 25-64 working full-time worked, on average, 41.4 hours a week compared with 42.5 hours in 1992, while women worked, on average, 36.9 hours in 2014 compared with 38.2 hours in 1992.

In 2014, men aged 25-64 working part-time worked, on average, 18.8 hours a week compared with 17.1 hours in 1992, while women worked, on average, 17.8 hours compared with 15.9 hours in 1992 (AIHW analysis of ABS 2015b).

Part-time work

A higher proportion of working-age Australians now work part-time. For the purpose of this article, part-time employed people are defined as people who usually work less than 35 hours a week. Full-time employees are people who work more than 35 hours a week.

In 2014, 25% of Australians aged 25-64 who were employed worked part-time compared with 21% in 1992 (AIHW analysis of ABS 2015b). While the proportion of women in the 25-64 age group working part-time has changed little over the past 20 years (42.3% in 2014 compared with 41.7% in 1992), the proportion of men working part-time has risen from 6% to 11% over the same period (AIHW analysis of ABS 2015b).

Unemployment

Unemployment can place enormous strains on a family—financial, emotional and mental. McLachlan and others (2013) found that unemployment and joblessness can not only increase the risk of economic hardship, but that rates of deprivation and social exclusion are also high among unemployed and jobless households.

The highest annual average rates of unemployment for Australians aged 25-64 since 1979 were in the early 1990s and peaked at 8.8% in 1993. After that, rates fell to a 35-year low of 3.2% in 2008, which was immediately before the global financial crisis (GFC). Since the GFC, the rate has increased, and in 2014 was 4.7%, with the rate for men (4.5%) lower than that for women (4.9%) (AIHW analysis of ABS 2015b) (see Chapter 2 'Labour force participation in Australia').

Underemployment

Underemployed workers are employed people who would prefer, and are available for, more hours of work than they currently have (ABS 2014f).

The underemployment rate (the number of underemployed workers expressed as a percentage of the labour force) for people aged 25 and over has been relatively stable over the past 2 decades. In 2014, 8.5% of women aged 25 and over were underemployed compared with 4.8% of men of the same age. In 1992 the proportions were 8.4% and 4.2% respectively (AIHW analysis of ABS 2015a).

Women and work

Sixty years ago, the traditional roles of women were predominantly as wives, mothers and homemakers. Women worked until they married—indeed until 1966 married women were prevented from having permanent employment in the Commonwealth Public Service and some private companies (ABS 2011; Strachan 2010).

Since then, the role of women in the workforce has changed dramatically. Today, many women's lives revolve around both paid work and family care (Strachan 2010) and Australian women now contribute 36% of employee earnings and are the breadwinners for one-quarter (26%) of employed couples with children (Richardson et al. 2014).

While participation in the labour force has over recent decades been quite high for women aged 20-24 (an average rate of 69% in 1979 compared with 75% in 2014), historically, it would drop markedly when women entered the prime child-raising years of 25-34 (Figure 5.1.3) (Jericho 2012). For example, in 1979 the labour force participation rate dropped to 51% for women aged 25-34 (AIHW analysis of ABS 2015b).

However, by 2014 this 'nappy valley' (ABS 2011) was no longer evident, with labour force participation much higher for women of traditional child-bearing age. By 2014, the rate had climbed to 75% for women aged 25-34, matching the rate for women aged 20-24 and 35-44 (AIHW analysis of ABS 2015b).

As already outlined, today, women in older age groups are more likely to remain in the workforce than they were in previous decades. The labour force participation rate of females aged 55-64 rose from 21% in 1979 to 56% in 2014 and the rate for women aged 65 and over rose from 2% in 1979 to 8% in 2014) (AIHW analysis of ABS 2015b).

Figure 5.1.3: Female labour force participation rate, by age, 1979, 1984, 1994, 2004 and 2014

Line chart showing the female labour force participation rate, by age group, for 1979, 1984, 1994, 2004 and 2014. The participation rate has generally increased over time for almost all age groups, although 2014 recorded the lowest rate for 15 to 19 year olds (around 55%). In 2014 the rate remained around 75% for all age groups from 20 to 54. In all years the rate dropped steeply after age 54 to below 10% for women aged 65 and over.

Source: AIHW analysis of ABS 2015b.

Between 1979 and 2014, the full-time employment-to-population ratio for women aged under 25 fell, while the ratio for women aged 25 and over rose. By contrast, the part-time employment-to-population ratio for all age groups increased over the same period (see Table 5.1.1) (AIHW analysis of ABS 2015b).

Table 5.1.1: Full-time and part-time employment-to-population ratio, females, by age group, 1979, 1984, 1994, 2004 and 2014

Full-time employment-to-population ratio
Year 15-19 20-24 25-34 35-44 45-54 55-64 65+
1979   34.8 53.5 29.4 30.3 27.1 11.7 1.0
1984   29.7 53.3 32.4 29.9 28.2 10.9 1.0
1994   14.0 49.1 40.0 35.0 36.2 13.1 0.9
2004   12.7 43.3 43.8 35.4 41.6 20.7 1.1
2014   7.3 36.4 46.7 37.3 43.3 27.5 2.2
Part-time employment-to-population ratio
Year 15-19 20-24 25-34 35-44 45-54 55-64 65+
1979   11.8 9.5 18.1 24.3 18.2 8.7 1.4
1984   16.4 11.4 17.9 25.5 20.1 9.0 1.2
1994   30.5 19.1 21.2 30.3 25.5 13.0 1.5
2004   39.5 27.6 23.2 32.5 29.9 20.4 2.4
2014   38.8 32.1 23.7 33.7 31.4 26.5 5.9

Note: The first full year that data were available from the ABS's Labour force, Australia, detailed—electronic delivery product was 1979.

Source: AIHW analysis of ABS 2015b.

According to Richardson and others (2014), the employment profile of women over the life course is now much more like that of men—women's share of employment and earnings has increased, as have the number of families that have women as the 'breadwinner' (the sole or main contributor of family income). In 2010, 31 per cent of employed couple families had a female breadwinner, with the rate higher in couples without children (36%) than with children (26%) (Richardson et al. 2014).

However, the part-time employment status of women is still quite different to that of men. As mentioned earlier, women are more likely than men to work part-time, especially between the ages of 25 and 54, reflecting the fact that many women reduce their paid work hours when they have young children to care for (AIFS 2013b).

Work transitions for mothers

As noted previously, in the 1960s and 1970s, labour force participation fell dramatically for women in their 20s and early 30s who left work to have children—and the majority never returned to the labour force (ABS 2011).

Today, the picture is quite different. An Australian Bureau of Statistics (ABS) report on work transitions of mothers before and after the birth of children found that, in 2011, more than two-thirds (68%) of mothers with a child aged under 2 had a job during their pregnancy (ABS 2013a).

Of the mothers who had a job and were working immediately before the birth, almost one-half (48%) worked part-time immediately before stopping work for the birth of their child. Younger mothers (aged 15-24) were much less likely than older mothers to work while pregnant, reflecting that women in the younger age group were more likely to be studying than in the workforce (ABS 2013a).

Just over one-half (53%) of mothers who worked during pregnancy returned to work within 2 years (ABS 2013a). The majority (84%) of mothers who started or returned to work after the birth of their child worked part-time in the first job that they returned to (ABS 2013a).

While some women also worked part-time before the birth of their child, the number of hours worked changed considerably when they returned to work. While only 10% of women with a child under 2 who worked during their pregnancy worked fewer than 15 hours immediately before the birth of their child, this rose to 39% after the birth. Most mothers (45%) worked between 15 and 34 hours a week (ABS 2013a).

The number of hours mothers work also changes as the child gets older. In 2011, almost one-half (48%) of mothers with a child aged 0-6 months who returned to work worked less than 15 hours a week. By the time the child reached 19-24 months, this proportion dropped to 22% (ABS 2013a) (see also Chapter 5 'Who is looking after our children?').

However, according to the Melbourne Institute, most mothers eventually return to the working situation they were in before the birth of their youngest child. For example, of mothers working full-time before their youngest child was born, 31% were back in full-time employment before the child turned 1, 54% had returned to full-time employment before the child was 4, and 63% were working full-time before the child was 6 (Melbourne Institute 2012).

Further, the employment rate for mothers with a youngest child aged 4 years or under has increased over the past 2 decades, rising from 41% in 1994 to 52% in 2012 (Commonwealth of Australia 2014).

Over the same period, the employment rate for mothers whose youngest child was aged 5-9 rose from 59% to 72%, and for those whose youngest child was aged 10-14, the rate rose from 65% to 75% (Commonwealth of Australia 2014) (see also Chapter 1 'Who we are' and Chapter 2 'Labour force participation in Australia').

Financial support for working-age Australians

The Australian Government provides a range of cash payments and income support payments to help those working-age Australians who need assistance to navigate the opportunities and challenges they face during this period of their lives. This assistance could be in the form of child care rebates, payments to help with the costs of raising children, or 'incentives for people to work, train or learn' so that families and individuals can participate fully in society (DSS 2014a) (see Box 5.1.2; Chapter 5 'Working-age support: financial assistance for families with children'; and Chapter 5 'Working-age support: assistance with employment and training').

Box 5.1.2: Working-age payments

Income support payments provided by the Australian Government include the Disability Support Pension (DSP), Newstart Allowance, Parenting Payment, Carer Payment, Austudy, and Sickness Allowance.

(Note: This box presents total recipients for all payments, which for some payments may include people who fall outside the 25-64 year age group that is the focus of this article.)

The Government also has a range of supplementary payments to support families with their work, caring and family responsibilities. The main supplementary payments are: Family Tax Benefit Part A (FTB A) and B (FTB B); Child Care Benefit; and Child Care Rebate. The Government also administers the Child Support Scheme, which aims to ensure that separated parents continue to provide financial support for their children.

At June 2014:

  • 830,000 Australians were receiving the DSP—most were aged 55-64 (38%) and 45-54 (25%). More than one-half of recipients (53%) were male
  • 244,000 people were receiving the Carer Payment (a fortnightly payment to people who provide care in a private home to a person with disability or severe medical conditions)—29% were aged 55-64, 24% were aged 45-54 and 18% were aged 35-44, with the majority of recipients (69%) being female
  • 590,000 Australians were receiving the Carer Allowance (a supplementary payment available to people who provide daily care and attention for adults or children with disability or severe medical conditions)—21% were aged 45-54, 20% were aged 35-44 and another 20% were aged 55-64, with the majority of recipients (73%) being female
  • 1.6 million Australian families were receiving FTB A, mostly parents aged 35-44 (41%) or 25-34 (29%)
  • 1.4 million families were receiving FTB B, again mostly parents aged 35-44 (40%) and 25-34 (30%)
  • 706,000 people were receiving Newstart Allowance—25% were aged 35-44, 23% were aged 25-34 and 23% were aged 45-54
  • 261,000 parents were receiving Parenting Payment (single)—46% were aged 25-34 and 29% were aged 35-44. Of the 104,000 parents receiving Parenting Payment (partnered), 49% were aged 25-34 and 30% were aged 35-44
  • 48,000 people were receiving Austudy—most (64%) were aged 25-34.

Source: DSS 2014b.

Family changes during the working years

Entering into long-term relationships and starting a family are important transitions in a person's life. Over the past 30 years, partnering and family patterns have changed, with Australians staying together longer and more likely to partner/cohabit before marriage.

Marriage

While the median age at which Australian men and women get married has changed little in the past 5 years, it has increased by about 5 years since 1983 (ABS 2008).

In 2013, the median age of men at marriage was 31.5 compared with 28.8 in 1993 and 26.4 in 1983. The median age was 31.4 in 2010, 2011 and 2012 (ABS 2008, 2014e).

In 2013, the median age of women at marriage was 29.5 compared with 26.4 in 1993 and 23.9 in 1983. This compared with 29.2 in 2010, 29.3 in 2011 and 29.4 in 2012 (see Figure 5.1.4) (ABS 2008, 2014e).

Figure 5.1.4: Median age at marriage, Australia, 1983, 1993, 2003 and 2013

Line chart showing the Australian median age at marriage for both men and women from 1983 to 2014. The median age has risen over this period by about 5 years for both genders.

Sources: ABS 2008, 2014e.

Divorce

While most Australians tend to get married during their working-age lives, some also get divorced.

As explained in Chapter 1 'Who we are', while the number of divorces has fluctuated in recent years, the divorce rate has slowly declined. In 2013, there were 2.1 divorces per 1,000 population compared with 2.2 in 2012 and 2.7 in 2003 (ABS 2014e).

It is useful to view these statistics in the context of other data that show the proportion of all couples who were cohabiting rose from 6% in 1986 to 16% in 2011 (AIFS 2014).

Although the median age at which men and women are getting separated and divorced has gradually increased over the past 20 years, both still tend to occur before the age of 45 for men (50% of men granted a divorce) and women (59%) (ABS 2014e).

Of the divorces granted in 2013, the median ages at separation and divorce for men were 41.3 and 44.8 respectively, compared with 36.2 and 39.3 in 1993 (ABS 2014e).

The median ages of women at separation and divorce in 2013 were lower than for men at 38.7 and 42.2 respectively, but also higher than 20 years earlier (33.3 and 36.4 years respectively in 1993) (ABS 2014e).

People aged 40-44 had the highest proportion of divorces (about 17%) and 47% of all divorces involved couples with children (ABS 2014e).

Although the time from marriage to separation has increased from 7.6 years in 1993 to 8.5 years in 2013, the peak of 8.9 years occurred in 2006 (ABS 2014e).

The time from marriage to divorce has also risen, from 10.7 years in 1993 to 12.1 years in 2013—although the peak of 12.6 years occurred in 2005 (ABS 2008, 2014e).

Children

In recent decades there has been a steady trend towards having children later in life.

The median age of mothers has been gradually increasing from 25.4 years in 1971—by 2013, it had risen by more than 5 years to 30.8 (ABS 1994, 2014c).

In 2013, the median age of fathers was 33.0 years. ABS data for the median age of fathers in 1971 are available only for fathers of nuptial children of current marriage, where the median age was 28.6 (ABS 1994, 2014c).

The number of women having children at older ages is increasing. In 2013, nearly 13,000 women were aged between 40 and 44 when they gave birth, compared with 7,700 in 2003 (ABS 2014c).

Although fertility rates fell for all age groups except for women aged 40-44 between 2012 and 2013, the rates for women aged 30-44 are still higher than 30 years ago. The rate for women aged 30-34 rose from 81.5 births per 1,000 women in 1983 to 124.5 in 2013; the rate for women aged 35-39 rose from 25.0 to 70.8 per 1,000, and for women aged 40-44 the rate rise was from 4.3 to 15.4 per 1,000 (ABS 2014c).

By contrast, the rates for younger age cohorts have decreased over the past 30 years. The teenage fertility rate fell from 26.6 babies per 1,000 women in 1983 to 14.6 in 2013; the rate for women aged 20-24 fell from 102.7 to 51.6, and that for women aged 25-29 from 145.9 to 99.5 (ABS 2014c).

The highest fertility rate ever recorded, 225.8 babies per 1,000 women, was in 1961 for mothers aged 20-24 (ABS 2014c) (see Figure 5.1.5).

Step-families, blended families, and shared parenting

For some Australians, the working-age years are also a time when families can change and re-form. For example, couples with children may become one-parent families due to separation, divorce or death of a parent.

A step-family is formed if a lone parent re-partners. If children are born to this new couple, the family is then classified as a blended family (ABS 2012).

The proportion of step-family and blended families of couple families with dependent children has changed very little over the last four Census years. The majority of couple families with dependent children were still intact families (89% in 2011 and 2006 compared with 91% in 2001 and 1996). Step-families were marginally more prevalent over this 1996-2011 period (between 5% and 6%) than blended families (between 4% and 5%) (AIFS 2013a) (see Chapter 1 'Who we are').

In a report on a survey of recently separated parents, De Maio and others (2012) found that about 1 in 5 separated families in Australia (22%) had shared care of their child. The most common parenting arrangement was for the child to spend most nights with the mother, with 53% of children having this arrangement.

Figure 5.1.5: Age-specific fertility rates, Australia, 1933 to 2013

Line chart showing changing fertility rates by age group in Australia, from 1933 to 2013. The fertility rates have mostly dropped recently for all age groups except 30 to 34 (risen to about 125 births a year for every 1000 women) and 35 to 39 (risen to about 75 births a year for every 1000 women). Since around 2000 the most fertile group has been 30 to 34, where for most previous years it had been 25 to 29.

Notes

  1. Births per 1,000 women—the number of live births registered during the calendar year, according to the age of the mother, per 1,000 of the female resident population of the same age at 30 June. For the period 1860 to 1970, crude birth rates are calculated as the number of births in a year per 1,000 of the population. For 1971 to 1992, the estimated resident mean population has been used as the denominator. From 1992, the mid-year (30 June) estimated resident population has been used.
  2. In the calculation of these rates, births to mothers aged under 15 years are included in the 15-19 years age group.

Sources: ABS 2014b, 2014c.

Home ownership for the working-age group

For many Australians, their experience of renting and buying a house is strongly related to their life course—they rent in early adulthood, move in to home purchase and mortgages as partnerships are formed and children are born, and own a home outright in older age (ABS 2013b).

In 2011-12, the majority of Australian households with a reference person (that is, survey respondent) aged between 35 and 64 either owned their home with a mortgage, or outright. The proportion who owned their home outright increased as people got older.

Younger Australian households, particularly those where the household reference person was aged 15-24, were much more likely than older age groups to be renting (Table 5.1.2) (ABS 2013b).

Young Australians in a couple relationship were more likely to be buying or own their own home than young single people. In 2011-12, 45% of younger couple-only households (with the reference person aged under 35) owned their home with or without a mortgage compared with 33% of single people under 35 (ABS 2013b).

Couples with children were more likely than younger couple-only households to own a home. Sixty-four per cent of couples with dependent children only and whose eldest child was aged under 5 owned their home with or without a mortgage. 'This rose to 72% for couples with their eldest child aged 5 to 14, and to 84% for couples with their eldest child aged 15 to 24' (ABS 2013b).

Table 5.1.2: Proportion of households owning/buying/renting a home, by age group of reference person, 2011-12
Tenure and landlord type 15-24 25-34 35-44 45-54 55-64 65-74 75+ All households
Owner without a mortgage **0.8 1.8 6.8 22.1 45.0 73.0 80.4 30.9
Owner with a mortgage 11.6 40.2 55.3 52.5 35.1 9.8 4.8 36.6
Renter
  • State/territory housing authority
*3.2 2.3 3.5 4.0 4.9 4.6 4.9 3.9
  • Private landlord
77.7 51.0 31.0 19.1 11.9 9.0 5.3 25.1
Total renters(a)   82.4 54.9 35.9 24.2 17.9 15.1 11.5 30.3

* Estimate has a relative standard error of 25% to 50% and should be used with caution.

** Estimate has a relative standard error greater than 50% and is considered too unreliable for general use.

  1. Includes 'Other landlord type', which accounts for about 4% of all renters.

Source: ABS 2013b.

Lone-person and couple-only households where the survey respondent, or reference person, was aged under 35 were more likely to be renting from private landlords (55% and 52% respectively) than to own their own home (ABS 2013b). 'People in these households are generally more mobile. Many are studying or starting their careers, and are likely to be on lower incomes and have lower reserves of wealth than at later stages in their lives' (ABS 2013b).

One-parent households with dependent children were more likely to be renting (63%) than to own their home with or without a mortgage (37%), and were the group most likely to be renting through a state or territory housing authority (11%) (ABS 2013b).

In 2011-12, 59% of first-home buyers with a mortgage were households where the reference person was aged 25-34. By comparison, the proportion of households where the reference person was aged 35-44 and 45-54 buying their first home with a mortgage in 2011-12 was 24% for 35-44 year olds and 7% for 45-54 year olds (ABS 2013b).

Home ownership (with and without a mortgage) by younger adult cohorts has fallen over the last 30 years. For example, according to Census data, the proportion of households that owned their own home where the reference person was aged 25-34 years fell from 61% to 47% between 1981 and 2011. In households where the reference person was aged 35-44, home ownership rates fell from 75% to 64% over the same period (AIHW 2013; Yates 2011).

However, according to Burke and others (2014), much of that decline was in the decade 1981-1991, and since 1991 purchase rates have actually increased by 4% for 25-34 year olds and 13% for 35-44 year olds.

The same report showed that what had changed most during this 30-year period was the ability to achieve outright ownership at an early age, which had fallen markedly. However, Burke and others noted that drawing conclusions from this was complicated, because changes to lending practices introduced in the mid-1980s meant mortgages could also be used to finance other purchases such as cars or rental properties (Burke et al. 2014).

There is evidence, however, that younger Australian households on single or low-to-moderate incomes 'are being progressively pushed out of the home purchase market' (Burke et al. 2014) (see also Chapter 5 'Bricks and mortar'). Whereas in 1981 the home purchase market was almost split 50-50 between single- and dual-income households, by 2011 over 80% were dual-income households for both the 25-34 and 35-44 year old age groups.

According to Burke and others (2014), the fall in the ability to purchase was 'not quite as dramatic, but still substantial' for low- to moderate-income households.

What is missing from the picture?

The lives of working-age Australians have changed rapidly and substantially over recent decades—people of this age are better educated, women are having children later in life and staying in employment longer, and more men are working part-time. More information is needed on how changes such as these affect not only Australians aged 25-64, but all age and social groups.

Where do I go for more information?

More information on the demographics and characteristics of Australian families can be found in the AIHW's series of Australia's welfare reports and the ABS Census.

References

ABS (Australian Bureau of Statistics) 1994. Births, Australia, 1993. ABS cat. no. 3301.0. Canberra: ABS.

ABS 2008. Australian historical population statistics, 2008. ABS cat. no. 3105.0.65.001. Canberra: ABS.

ABS 2011. Australian social trends, December 2011. ABS cat. no. 4102.0. Canberra: ABS.

ABS 2012. Family blending. Canberra: ABS. Viewed 23 October 2014.

ABS 2013a. Australian social trends November 2013. ABS cat. no. 4102.0. Canberra: ABS.

ABS 2013b. Housing occupancy and costs, 2011-12. ABS cat. no. 4130.0. Canberra: ABS.

ABS 2013c. Population projections, Australia, 2012 (base) to 2101. ABS cat. no. 3222.0. Canberra: ABS.

ABS 2014a. Australian demographic statistics, June 2014. ABS cat. no. 3101.0. Canberra: ABS.

ABS 2014b. Australian historical population statistics, 2014. ABS cat. no. 3105.0.65.001. Canberra: ABS.

ABS 2014c. Births, Australia 2013. ABS cat. no. 3301.0. Canberra: ABS.

ABS 2014d. Education and work, Australia, May 2013. ABS cat. no. 6227.0. Canberra: ABS.

ABS 2014e. Marriages and divorces, Australia, 2013. ABS cat. no. 3310.0. Canberra: ABS.

ABS 2014f. Underemployed workers, Australia, September 2013. ABS cat. no. 6265.0.

ABS 2015a. Labour force, Australia, December 2014. ABS cat. no. 6202.0. Canberra: ABS.

ABS 2015b. Labour force, Australia, detailed—electronic delivery, December 2014. ABS. cat. no. 6291.0.55.001. Canberra: ABS.

AIFS (Australian Institute of Family Studies) 2013a. Australian households and families. Australian family trends no. 4. Melbourne: AIFS.

AIFS 2013b. Families working together: getting the balance right. Australian family trends no. 2. Melbourne: AIFS.

AIFS 2014. Family facts and figures: cohabitation. Melbourne: AIFS.

AIHW (Australian Institute of Health and welfare) 2013. Australia's welfare 2013. Australia's welfare series no. 11. Cat. no. AUS 174. Canberra: AIHW.

Burke T, Stone W & Ralston L 2014. Generational change in home purchase opportunity in Australia. Melbourne: AHURI.

Cobb-Clark D 2014. Demographic trends in labour market participation. Melbourne Institute Forum. December 2014. Melbourne: Melbourne Institute.

Commonwealth of Australia 2014. A new system for better employment and social outcomes. Interim report of the Reference Group on Welfare Reform to the Minister for Social Services. Canberra: Commonwealth of Australia. Viewed 15 September 2014.

De Maio J, Kaspiew R, Smart D, Dunstan J & Moore S 2012. Survey of recently separated parents. A study of parents who separated prior to the implementation of the Family Law Amendment (Family Violence and Other Matters) Act 2011. Melbourne: AIFS.

DSS (Department of Social Services) 2014a. Budget fact sheet—working age payments. Canberra: DSS. Viewed 19 November 2014.

DSS 2014b. DSS payment demographic data June 2014. Canberra: DSS. Viewed 22 October 2014.

Jericho G 2012. Changing role of women in the workplace. The Drum. Sydney: ABC. Viewed 18 November 2014.

McLachlan R, Gilfillan G & Gordon J 2013. Deep and persistent disadvantage in Australia, revised. Productivity Commission staff working paper. Canberra: Productivity Commission.

Melbourne Institute 2012. Employment transitions of mothers. In: Families, income and jobs, volume 7: a statistical report on waves 1 to 9 of the Household, Income and Labour Dynamics in Australia survey. Melbourne: Melbourne Institute, University of Melbourne, 159-168.

Richardson S, Healy J & Moskos M 2014. From 'gentle invaders' to 'breadwinners': Australian women's increasing employment and earnings shares. National Institute of Labour Studies working paper series no. 210, September 2014. Adelaide: NILS.

Strachan G 2010. Still working for the man? Women's employment experiences in Australia since 1950. Australian Journal of Social Issues 45(1):117-130.

Yates J 2011. Explaining Australia's trends in home ownership. Housing Finance International Winter 2011:6-13.

5.2 Who is looking after our children?

Quality child care is of critical importance, not only in allowing labour force participation of parents and carers, but also in providing lifelong influences on the developmental outcomes of children. Quality child care is an investment to ensure that all children are given the best possible start in life. The early years of life have a significant impact on developmental outcomes for children across the lifespan. Quality child care and preschool programs have been found to promote cognitive and social development in addition to supporting workforce participation (Warren & Haisken-DeNew 2013).

The increased labour force participation of women and an increase in one-parent families with dependent children has made access to, and affordability of, child care a significant issue for Australian families and governments. Overall, rates of formal child care usage over the past 10 years have remained relatively unchanged; however, the main reason for parents and carers seeking child care for their children has become more likely to be for work-related reasons.

Currently the Australian Government offers a range of types of financial support to assist parents and carers with the cost of child care, including the Child Care Benefit, which assists with the cost of child care services, and the Child Care Rebate, which assists with other out-of-pocket expenses associated with work-related child care services. Additionally, in recent years the Australian Government asked the Productivity Commission to undertake a review of early childhood education and care, which sought to make child care more affordable, flexible and accessible for Australian families. The inquiry has been completed and a final report was provided to the Australian Government in October 2014 and released on 20 February 2015. For more information, see the Productivity Commission Childcare and Early Childhood Learning, public inquiry.

Early childhood education and care policy context

The National Quality Framework for Early Childhood Education and Care sets out a uniform national approach to quality assessment and regulation of early childhood education and care. It applies to most long day care, family day care, preschool and kindergarten, and outside schools hours care services. The framework includes a National Quality Standard which provides a national benchmark for measuring the quality of education and care services and a quality rating and assessment process that measures against the National Quality Standard.

Additionally, associated Early Childhood Workforce Initiatives provide a range of programs designed to support, train and retain an experienced and qualified child care and early learning workforce.

In 2014, the Australian Government and all states and territories commenced a review of the National Quality Framework for Early Childhood Education and Care. The review is aimed at finding what has worked well, any areas for improvement, and other consequences of implementation (Department of Education 2014b).

Trends in child care

In 2014, an estimated 48% of all Australian children aged 0-12 (1.8 million children), regularly attend either formal or informal care (see Chapter 3 'Children in child care and preschool programs' for more details). Of these children, 919,400 attended formal care and 1.4 million used informal care (ABS 2015). Formal care is before or after school care programs, long day care and family day care; examples of informal care are care provided by a grandparent, brother or sister, non-resident parent, other relative or other person. (Further details on formal and informal care can be found in Chapter 3 'Children in child care and preschool programs'.)

The Household, Income and Labour Dynamics in Australia (HILDA) survey showed that the need for child care remained relatively unchanged over the 2002-2011 period, with the proportion of all children for whom any child care is used remaining steady at around 59%.

The reasons for seeking child care, however, changed over that period. Child care sought for work-related reasons increased from 42% to 46% of all families. Of these families, couple families seeking work-related child care increased from 42% to 47% and one-parent families increased from 39% to 44%. The HILDA survey also showed that the proportion of families for which non-work-related child care is used dropped from 17% to 13%. This drop was similar for both couple families and one-parent families. Work-related child care was more likely to be used by couple families than one-parent families in 2011 (47.0% compared with 43.7%). Non-work-related child care was used more frequently by one-parent families than couple families (17.3% compared with 12.4%) (Hahn & Wilkins 2014).

For the majority of children not yet at school, a parent or grandparent was the most common form of child care, accounting for 72% of all informal care. Of those who attended formal care, a long day care centre (62%) was the most frequent form of child care accessed (Hahn & Wilkins 2014).

Employment status and family composition play an important role in the type of care attended by children. Figure 5.2.1 shows the levels and types of child care accessed by couple families and one-parent families, by employment status. The data come from the ABS 2014 Childhood Education and Care Survey. This survey showed that the reasons parents accessed child care were: for work and study reasons or if they were looking for work (73%); benefits associated with preparing the child for school (18%); and for personal reasons including entertainment, social reasons, or to give parents a break (8%) (ABS 2015).

All families in all forms of employment are more likely to use grandparents for informal care than other types of care. Grandparents provide informal care to nearly a third of both working couple families and working one-parent families.

Among couple families, those with both parents employed are more likely than couple families of other employment status to use all forms of formal care—long day care, before and/or after-school care, and family day care (18%, 11% and 3% of families respectively). Employed one-parent families are more likely to use before and after-school care than long-day care (16% compared with 11%) (ABS 2015).

Among Aboriginal and Torres Strait Islander children aged 0-12 years, an estimated 56% use formal and/or informal child care. Child care was more frequently used by children aged 0-4 years (61%) than children aged 5-12 years (53%).

According to the 2008 National Aboriginal and Torres Strait Islander Social Survey, nearly 1 in 2 Aboriginal and Torres Strait Islander children are likely to be attending informal child care, with grandparents the most-used informal care provider for 32% of 0-4 year olds and 23% of 5-12 year olds (ABS 2010).

Figure 5.2.1: Proportion of children aged 0-12 years, type of care usually attended by labour force status of parents and family composition, 2014

Image of two bar charts showing the proportion of children aged 0-12 years in types of care usually attended in 2014. The data are shown by the labour force status of parents and family composition. This graph shows the proportion of children who usually attend formal care from couple families and one-parent families. The proportion of children from couple families who attend formal care is much higher when both parents are employed (almost double the rate of children from couple families where only one or neither parent is employed). Most children from couple families attend long day care (7 to 18%). For one-parent families, most children (16% of those where the parent is employed) attend before or after school care. Image of two bar charts showing the proportion of children aged 0-12 years in types of care usually attended in 2014. The data are shown by the labour force status of parents and family composition. This graph shows the proportion of children who usually attend informal care from couple families and one-parent families. For both types of families, children who attend informal care tend to be taken care of by their grandparents (anywhere from 7 to 31% of children depending on the employment status of parents).

Source: ABS 2015.

Cost and accessibility of child care

A strong association between parents' weekly income and the use of child care is seen both within couple families and one-parent families. Children in couple families for whom the weekly income was less than $1,000 were less likely to attend child care than those in families where the weekly income was $2,500 or more (Figure 5.2.2).

Figure 5.2.2: Proportion of children aged 0-12 years in couple families who usually attended child care, by weekly income of parents, 2014

Bar chart showing the proportion of children aged 0-12 years in couple families who usually attended child care, by weekly income of parents, in 2014. As weekly income of parents rises, so does the proportion of children who attended child care. For parents with a weekly income less than $1000, about 30% of children usually attended child care. For parents with a weekly income of $2500 or more, about 55% of children usually attended child care.

Source: ABS 2015.

Children in one-parent families were more likely to be attending child care where weekly income was above $600 per week (Figure 5.2.3).

Figure 5.2.3: Proportion of children aged 0-12 years in one-parent families who usually attended child care, by weekly income of parent, 2014

Bar chart showing the proportion of children aged 0-12 years in one-parent families who usually attended child care, by weekly income of parent, in 2014. As weekly income of the parent rises, so does the proportion of children who attended child care. For single parents with a weekly income less than $600, about 50% of children usually attended child care. For single parents with a weekly income of $1000 or more, about 75% of children usually attended child care.

Source: ABS 2015.

The 2014 ABS Childhood Education and Care Survey found that the average amount of time spent in child care by Australian children who attended any type of care was 18 hours per week. Approximately 29% of children who attended formal care were likely to attend for 10-19 hours per week. Only 9% of children were likely to attend for 35 hours or more per week (ABS 2015).

The National Centre for Social and Economic Modelling (NATSEM) has indicated that the demand for child care has increased by 77% since 1996, with grandparents providing most of the additional care required. The increase in demand has also seen costs of child care escalate, particularly for long day care. For example, some of the most expensive areas of Australia report a cost to families of up to $170 per day. This amount can be more than a day's wage for a low-income woman (Phillips 2014).

NATSEM also estimates that the gross cost of child care has increased faster than the consumer price index over the past 10 years (10% per year compared with 3% per year), which has resulted in a 150% increase in the real cost of child care. While the Australian Government subsidises families for the cost of child care, increases in the subsidies are thought to have a direct impact in terms of price increases passed on to families by the provider (Phillips 2014).

Workforce participation of parents

Based on data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, from 2001 to 2010, differences in labour force participation by parents are fairly evident by family type. For couple families, fathers in couple families (67%) are the most likely of all parents to be in full-time employment, and mothers in couple families are more likely to work part-time (37%). In lone-parent families, 43% lone fathers are most likely to be in full-time employment while 40% of lone mothers do not participate in the labour force at all (Kecmanovic & Wilkins 2013).

The labour force participation of fathers in couple families has remained relatively consistent since 2001; however, the rate of lone fathers who are employed full-time fell from 48% to 43% and the proportion of lone fathers who are not in the labour force has conversely increased from 25% to 37%. Mothers in couple families are more likely to be participating in the labour force than they were in 2001 (69% compared with 64%). There has been an increase in lone mothers in full-time work since 2001 (30% compared with 27%), while part-time work for lone mothers has remained fairly consistent (24%) (Kecmanovic & Wilkins 2013).

After the birth of a child, women state various reasons for returning to the workforce. The most common reason cited by women returning or starting work up to 2 years after giving birth was financial reasons (73%), followed by the need for adult interaction/mental stimulation (54%), and to maintain their career/skills (51%). One-third of women return to work or start work when their child is aged between 7 and 12 months old (ABS 2012); however, for some women the financial benefit resulting from returning to work is negated by the cost of child care and increases in tax payments, particularly as hours of work increase and hours of child care required increase (Phillips 2014).

Upon a mother's return to work with a child under the age of 2, the most common form of child care was informal care, with 67% of women using this form of care compared with 33% opting to use formal day care. Overall, the main sources of care were grandparents (27%) the father of the child or mother's partner (26%) and long day care centres (23%) (Figure 5.2.4).

Figure 5.2.4: Main type of child care used by women who started or returned to work with a child under 2 years

Bar chart showing the main type of child care used by women who started or returned to work with a child under 2 years. The data are grouped by formal types of care and informal types of care. Most women in this category tend to use informal care provided by their partner/father of their child or their child's grandparent (over 25%). The most widely used type of formal care is care provided by a long day care centre (used by about 23% of women).

Source: ABS 2012.

According to the Pregnancy and Employment Transitions Survey conducted in 2011 (ABS 2012), 67% of women returning to work within 2 years of having a child indicated that they had flexible work arrangements that allowed them to assist with the care of a child, including part-time work, working from home, flexible working hours and job sharing. Flexible working arrangements were available to 95% of women returning to work in the first 2 years after the birth of a child. Additionally, 50% of those women's partners indicated that they were also able to access flexible work arrangements to assist with the care of the child.

There has been an increase in availability of, and access to, child care over the past 3 years. However, a significant number of parents and carers have indicated that their current care arrangements do not meet their current needs or will not meet future needs. An estimated 21% of all children aged 0-12 have unmet child care needs. Of those children in couple families whose children usually attended preschool or formal care, 19% (177,600) indicated that additional care was required, and in one-parent families, 21% (39,500) indicated that additional preschool or formal care was required.

Of couple families with children who currently attended informal care only, 3.5% (24,400) required preschool or formal care now, and of all one-parent families whose children attended informal care only, 10% or around 21,900 families estimated that they additional preschool or formal care now (ABS 2015).

Child care workforce

The 2013 National Early Childhood Education and Care Workforce Census shows that about 153,200 staff are employed in the Early Childhood Education and Care (ECEC) sector, with the largest proportion of these staff being employed in long day care services (50%). Preschools accounted for 18% of ECEC staff, before and/or after school care 12%, vacation care 100%, and family day care 9%.

The number of people employed in ECEC has grown by 11% since 2010 and services are estimated to have grown by nearly 6%. The number of children in care is estimated to have grown by 15% (Department of Education 2014a).

Figure 5.2.5: Highest level of ECEC-related qualifications of paid contact staff, 2013

Pie chart showing the highest levels of ECEC-related qualifications of paid contact staff in 2013. Most (36%) achieved a certificate 3 or 4 qualification. 28% achieved an advanced diploma or diploma, 16% achieved a bachelor degree or above, 18% had no ECEC-related qualification, and 2% achieved below a certificate 3 qualification.

Source: Department of Education 2014a.

Staff employed within this sector are well qualified (Figure 5.2.5), with 82% in 2013 having an ECEC-related qualification, compared with 70% in 2010. Currently, at least 16% of ECEC staff have Bachelor degrees (Department of Education 2014a). Despite the high level of qualifications within this field, salaries for ECEC workers are relatively low, with little difference between the pay levels of the most qualified and experienced workers and the least qualified workers. Critical shortages of staff exist in this sector with many leaving due to relatively low pay rates and poor conditions (Harrington & Jolly 2013).

(For additional information on enrolments in child care and preschool, see Chapter 3 'Children in child care and preschool programs'. For additional information on the community workforce, see Chapter 2 'The changing face of the welfare workforce'.)

What is missing from the picture?

Data on the quality and use of early childhood education programs, and associated lifelong outcomes, are limited and difficult to capture. Linking data on children who access quality early child care/education and informal care with later school achievements and life outcomes could provide very useful insights into the efficacy of early childhood education and care (see Box 4.8.1, 'Investigating pathways using data linkage' for more information).

Where do I go for more information?

More information regarding early childhood education and care can be found at the ABS website and the Department of Education website.

References

ABS (Australian Bureau of Statistics) 2010. The health and welfare of Australia's Aboriginal and Torres Strait Islander Peoples 2010. ABS cat. no. 4704.0. Canberra: ABS.

ABS 2012. Pregnancy and employment transitions, Australia, November 2011. ABS cat. no. 4913.0. Canberra: ABS.

ABS 2015. Childhood education and care, Australia, June 2014. ABS cat. no. 4402.0. Canberra: ABS.

Department of Education 2014a. 2013 National Early Childhood Education and Care Workforce Census. Canberra: Department of Education. Viewed 23 November 2014.

Department of Education 2014b. Review of the National Quality Framework for Early Childhood Education and Care. Canberra: Department of Education. Viewed 23 November 2014.

Hahn M & Wilkins R 2014. Family circumstances and care arrangements of children. In: Wilkins R (ed.) Families, incomes and jobs, volume 9: a statistical report on waves 1 to 11 of the Household, Income and Labour Dynamics in Australia (HILDA) survey. Melbourne: University of Melbourne.

Harrington M & Jolly R. The crisis in the caring workforce. Canberra: Parliamentary Library. Viewed on 7 April 2015.

Kecmanovic M & Wilkins R 2013. Parenting and paid work. In: Wilkins, R (ed.) Families, incomes and jobs, volume 8: a statistical report on waves 1 to 10 of the Household, Income and Labour Dynamics in Australia (HILDA) survey. Melbourne: University of Melbourne.

Phillips B 2014. Childcare affordability in Australia. AMP & NATSEM income and wealth report issue 35. Canberra: University of Canberra.

Warren D & Haisken-DeNew J 2013. Early bird catches the worm: the causal impact of pre-school participation and teacher qualifications on Year 3 NAPLAN outcomes. Melbourne: Department of Education and Early Childhood Development & Melbourne Institute of Applied Economic and Social Research.

5.3 Home alone

In the last 50 years there has been a substantial increase in the proportion of Australians living alone. In 1961, just over 1 in 10 Australian households (11%) had only one resident. In 2012-13, lone-person households increased to almost 1 in 4 (23%) (ABS 2015). An estimated 2.1 million people currently live alone in Australia (ABS 2015).

Why has there been an increase in lone-person households?

The rise of lone-person households has been attributed to 3 factors: younger people who have not partnered or had children; middle-aged people whose relationship or marriage has ended; and older people who are widowed (ABS 2009).

Australia's ageing population has significant implications for the provision of appropriate housing and aged care (AIHW 2013). Many older Australians report that they want to 'age in place'. This means location, in terms of connection to the community and familiarity with services, is the most important factor for older Australians in deciding where to live. This is in preference to moving into specialised care or into a dwelling that may be more appropriate to their needs, but is located away from their community (Olsberg & Winters 2005) (see Chapter 6 'Older Australians and the use of aged care').

Figure 5.3.1 shows the proportion of persons living in one-person households in Australia between 1994-95 and 2011-12. The proportion of lone-person households increased steadily between 1994-95 and 2005-06 (from 22.8% to 25.7%), before decreasing and then plateauing between 2005-06 and 2011-12. This decrease may be attributed to increases in property prices, with living alone becoming increasingly unaffordable especially for younger age groups (AIFS 2015).

Between 2006 and 2011, there has been a decline in lone-person households of 0.8% for those aged 30-34 years, and 0.7% for those aged 35-39 years. However, for those aged 60-64 years there was an increase between 2006 and 2011 of lone-person households of 1.6%, and 1.1% increase for those aged 65-69 years (ABS 2013a).

Who is living alone?

  • In 2011-12, almost one-half (42%) of all people aged 65 years or older lived in lone-person households, compared with 15% aged 35-44 years (ABS 2013a).
  • People in lone-person households were more likely to live in a separate house (62%) than a flat/ unit or apartment (21%) or a semi-detached townhouse (17%), with an average of 2.5 bedrooms (ABS 2013b). This is likely to be due to the high proportion of older Australians living alone who own their home.
  • Sixty per cent of lone-person households were in capital cities—this was slightly higher for lone-person households aged 35-44 years (66%). Of all lone-person households, those aged 35-44 years also had the highest median income (ABS 2013a).
  • Among social housing tenants in Australia, more than one-half of public rental housing households (53%) comprised a single person living alone (AIHW 2015).

Figure 5.3.1: Proportion of persons living in lone-person households in Australia, 1994-95 to 2011-12

Line chart showing the proportion of persons living in lone-person households in Australia, from 1994 to 2011. In 1994 the proportion was about 22.75%. This rose over time and peaked at around 25.75% in 2005, then fell again to around 24.5% in 2011.

Source: ABS 2013b.

Health and wellbeing of lone households

  • Sixty per cent of lone-person households where the person was aged under 35 rated their health as excellent or very good (60%) compared with 70% of persons aged 35 years and over living in couple or one-family households. Older lone-person households (aged 65 or over) were more likely to rate their health as fair/poor (38%) than any other household type (ABS 2011).
  • People living alone, while more prone to loneliness, are not necessarily lonely, as many have regular social interaction outside their households. People living alone also report similar levels of access to support from someone outside their household in a time of crisis as couple, family or group households (ABS 2009).
  • Between 2006 and 2010, there was an increase in the proportion of people living in lone-person households with 3 or more disadvantages—including low income, no work, poor health, low education, feeling unsafe and low social support (Australian Government 2012). For example, lone-person households were more than twice as likely to experience 3 or more disadvantages compared with couple families with children.
  • Older lone-person households were more likely than older couple households to have government pensions and allowances as their main source of income (76% compared with 61%) (ABS 2013a). Younger lone-person households were also less likely to have a main source of income as wages (76%) compared with young couple households (81%).
  • People living alone who have few or no social interactions have an increased risk of developing mental health problems (Franklin & Tranter 2011). For example, in 2007, 15% of Australians with a mental illness were living in lone-person households (ABS 2009).

What is missing from the picture?

Demographic aspects of lone-person households, such as how long Australians live alone and why, as well as how moving into and out of living alone arrangements affects wellbeing and social connections, are not discussed here. Further research into these aspects will provide a greater understanding of Australians who are living alone.

Where do I go for more information?

For more information on housing assistance in Australia, refer to reports available online at Housing and homelessness; and the Housing Assistance in Australia 2015 report. Further information about housing affordability and assistance in Australia is provided in Chapter 5.

References

ABS (Australian Bureau of Statistics) 2009. Australian social trends December 2009. ABS cat. no. 4102.0. Canberra: ABS.

ABS 2011. General social survey: summary results, Australia, 2010. ABS cat. no. 4159.0. Canberra: ABS.

ABS 2013a. 2006 and 2011 Census, unpublished data generated using ABS TableBuilder. Canberra: ABS.

ABS 2013b. Housing occupancy and costs, 2011-12. ABS cat. no. 4130.0. Canberra: ABS.

ABS 2015. Family characteristics and transitions, Australia, 2012-13. ABS cat. no. 4220.0. Canberra: ABS.

AIFS (Australian Institute of Family Studies) 2015. Demographics of living alone. Australian Family Trends no. 6. Canberra: AIFS.

AIHW (Australian Institute of Health and Welfare) 2013. The desire to age in place among older Australians. AIHW bulletin no. 114. Cat. no. AUS 169. Canberra: AIHW.

AIHW 2015. Housing assistance in Australia 2015. Canberra: AIHW. Viewed on 29th May 2015.

Australian Government, 2012. Social inclusion in Australia: how Australia is faring—2nd edition. Canberra: Commonwealth of Australia.

Franklin A & Tranter B 2011. Housing, loneliness and health. AHURI final report no. 164. Melbourne: Australian Housing and Urban Research Institute.

Olsberg D & Winters M 2005. Ageing in place: intergenerational and intrafamilial housing transfers and shifts in later life. Melbourne: Australian Housing and Urban Research Institute.

5.4 Bricks and mortar—changing trends in home ownership

Suitable housing is essential to the wellbeing of individuals, families and communities. It provides shelter, security and, in the case of home ownership, a store of wealth. Owning a home, for many Australians, has long been seen as 'the great Australian dream' (ABS 2013c). Historically, Australia has had high rates of home ownership; however, since the 1980s overall home ownership rates have been in decline. At the time of the 2011 Census, just over two-thirds (67%) of Australian households owned their home (with or without a mortgage). This was a slight decrease from 68% in the 2006 ABS Census.

Understanding the changing trends in home ownership is important not only for economic reasons, but to also recognise the shifting needs of Australian households and how these are being met. Many factors influence these trends, from the availability and affordability of land and housing, levels of investment and construction, to changes in population characteristics and individual economic circumstances (Yates 2011).

Trends in home ownership in Australia

The majority of Australians either own their own home outright (without a mortgage) or are currently buying it (with a mortgage) (see Box 5.4.1 for a summary of housing tenure types). Over the past decade, however, the pattern of home ownership has changed (Figure 5.4.1). There has been a significant decline in the proportion of Australians who own their own home outright and a corresponding rise in the proportion of those who own with a mortgage. This could be attributed to later entry into home ownership than previous years, as well as later family formation. In 1994-95, 42% of Australians owned their own home outright and just under 30% of Australians owned with a mortgage. Over the next decade and a half those who owned their home outright declined to 31% of Australians and those with a mortgage rose to 37% in 2011-12.

Figure 5.4.1: Housing tenure type, 1994-95 to 2011-12

Line chart showing proportions of different housing tenure types, from 1994 to 2011. From 1994 to 2003 the housing tenure type with the highest proportion was 'owner without a mortgage', but has since been overtaken by 'owner with a mortgage', which sat at around 35% in 2011. 'Renter with private landlord' is the third-highest type with between around 15 and 25% over the whole period. The type with the lowest proportion over the whole period was 'renter with state/territory housing authority' (between around 0 to 5%).

Notes

  1. Other landlord type not included, which account for about 4% of all renters in 2011-12.
  2. Other tenure type not included, which account for about 2% of all households in 2011-12.

Source: ABS 2013c.

Box 5.4.1: Housing tenure

Housing tenure types are defined by the categories below.

Home owners—These households either:

  • owned their home outright; or
  • were in the process of purchasing their home (for example home owner with a mortgage).

Renters—There are generally two types:

  • private renters (renting from a private landlord); or
  • renting from social housing providers (state and territory governments or community housing organisations).

Australians are also renting in increasing numbers. The proportion of renters (with a private landlord) has increased, from 18% in 1994-95 to 25% in 2011-12 (Figure 5.4.1). Research suggests that the main reason for this change is the increased cost of housing ownership, discouraging renters from aspiring to home ownership (Beer & Faulkner 2009).

The proportion of households that rent with state and territory housing authorities has declined by one-third, from 6% in 1995-96 to an historically low level of 4% in 2011-12 (ABS 2013c).

Housing tenure in Australia also varied across states and territories in 2011-12. Tasmania had the highest proportion of those who owned their house outright (35%), and the Northern Territory had the lowest (17%). Households in the Northern Territory were also the most likely to be renting from a private landlord (32%) or from state or territory housing authorities (8%). Western Australia and the Australian Capital Territory had the highest proportion of owners with a mortgage (both 40%), and New South Wales and Tasmania reported the lowest proportion (both 35%) (ABS 2013c).

Home ownership over the life cycle

As Australians progress through life cycle stages, their housing needs often shift in line with changes in family composition (ABS 2012). A strong link has been shown between life-course events and entry and progression into the housing market (Beer & Faulkner 2009). Box 5.4.2 provides a summary of the housing decisions that many Australians face over the course of their working lives.

Box 5.4.2: 'Housing career' over working life

Early working life (25-34 years)

Leaving the family home because of marriage has been traditionally the time when Australians purchase their first home. In 2009, marriage was still an important reason for leaving the family home, with 22% of those aged 25-34 years indicating marriage or a long-term relationship as the main reason. While there were more renters in this age group, they were also more likely than any other age group to believe they would purchase their first home in the next 5 years (Beer & Faulkner 2009).

Mid working life (35-54 years)

This time of life is usually where an increasing proportion of people are in relationships, have increased levels of income and are homeowners (Flood & Baker 2010). Research has also shown that this is the time when loss of employment, relationship breakdown or financial stress are more likely to occur, with resulting changes in housing circumstances.

End of working life (55-64 years)

This age group is more likely to own their own home outright, potentially providing financial advantages prior to, and in to retirement (Beer & Faulkner 2009).

Young Australians are leaving the family home later in life compared with a few decades ago. In 2011, around 29% of single young adults (aged 18-34 years) lived with one or both of their parents, up from 21% in 1976 (ABS 2013a). Delayed leaving of the parental home can be linked to such factors as reduced income due to tertiary study, and the difficulties many young people face finding secure employment and affordable accommodation. To help with saving to buy their first home, many young people transition from the family home to private rental in group households, although the proportion in this household type has been decreasing. Additionally, many young Australians return to their parental household when circumstances change, and this often includes support with saving to buy their first home. For example, after leaving the home, an estimated 46% will return at least once before the age of 35 (ABS 2009). As such, the transition between exiting the parental home and moving into home ownership is becoming increasingly difficult.

As expected, age distribution by tenure type shows 25-35 year olds are more likely than other age groups to be renting in the private market and those aged 55-64 were much more likely than other age groups to own their own home outright (Figure 5.4.2). Those aged 55-64 years were also more likely than other age groups to be renting with a state or territory housing authority (5%) compared with those aged 45-54 (4%) (Figure 5.4.2).

Figure 5.4.2: Housing tenure type by age of household reference person, 2011-12

Stacked bar chart showing proportions of different housing tenure types by age of household reference person in 2011. Renting with private landlord rates decrease as age increases, while rates of owning without a mortgage increase.

Notes

  1. 'Other landlord' type not included, which accounted for about 4% of all renters in 2011-12.
  2. 'Other tenure type' not included, which accounted for about 2% of all households in 2011-12.

Source: ABS 2013c.

From 1991 to 2011 there were gradual declines, across four age groups covering ages 25 to 64, in the proportion of Australians who owned a home (with and without a mortgage) (Figure 5.4.3). From 1981 to 1991 home ownership rates had been rising for the 45-54 and 55-64 groups, but had fallen for the 25-34 and 35-44 groups.

Overall, home ownership rates (with and without a mortgage) have fallen most for younger adult cohorts over the last 30 years. Rates for the 25-34 group fell from 61% to 47% between 1981 and 2011 (Yates 2011) (Figure 5.4.3). Unfortunately, the longer young Australians wait to purchase a home, the fewer working years they have to repay their mortgage, which may directly affect their retirement years.

Yates (2011) discusses some of the demographic and economic factors that help explain the decline in home ownership for younger households. These include the emergence of single-person and single-parent households (with less purchasing capacity than double-income households), a steadily emerging gap between house prices and average weekly earnings over the period, and pressure on the housing market imposed by increasing demand from established owners. Yates also cites tax concessions to owner-occupiers (principally negative gearing) that are biased towards high-income households with considerable equity in housing.

A majority of older Australians own their homes outright, allowing many retired people to live on relatively low incomes (Figure 5.4.2). However, for working-age Australians, purchasing a home later in life increases the risk of spending more of their income on housing costs in retirement. This has significant implications for living standards, and threatens the capacity of older Australians to remain in home ownership and age 'in place'.

Figure 5.4.3: Home ownership (with and without a mortgage) by age of household reference person, 1981-2011

Line chart showing rates of home ownership (with and without a mortgage) by age of household reference person, from 1981-2011. In all years, rates of home ownership increased with age. Home ownership rates have decreased for all age groups over time. In 2011, around 80% of people aged 55 to 64 owned a home, around 75% of people aged 45 to 54 owned a home, around 65% of people aged 35 to 44 owned a home, and around 47% of people aged 25 to 34 owned a home.

Source: Unpublished ABS unit record data, sourced from Yates (2011).

Home ownership with a mortgage rose across all age groups between 1991 and 2011. This change could be attributed to the increasing size of home loans, as well as home loan refinancing, and the increasing difficulty of Australian home owners to achieve outright home ownership over time (Burke et al. 2014).

Australian households and homes changing

Between 1994-95 and 2011-12, family structure was dominated by couple families with dependent children, couples without children, and lone-person households (ABS 2013c). The proportion of couple families with dependent children has declined over time, from 31% in 1994-95 to 26% in 2011-12. Couple-only households have increased gradually, from 24% in 1994-95 to 26% in 2011-12. Likewise, lone-person households increased from 23% to 25% over the same period (ABS 2013c).

Other one-family households made up the next highest proportion of household composition, followed by one-parent families with dependent children, group households and multiple-family households. The proportion of these groups has remained fairly static over time.

Types of home ownership also vary across different family structures. Figure 5.4.4 shows that in 2011-12, couple-only households (46%) were most likely to own a home without a mortgage, followed by lone-person households (39%).

Couple families with dependent children were more likely to be owners of a home with a mortgage (61%) than any other tenure type. The most common tenure and landlord type for group households (69%) and one-parent families with dependent children (48%) was renting from a private landlord. Just over 1 in 10 one-parent families with dependent children (11%) were renting from a state or territory housing authority (ABS 2013c).

Figure 5.4.4: Family household composition by housing tenure type, 2011-12

Bar chart showing proportions of family household compositions by housing tenure type in 2011. Most households who owned without a mortgage were couples only (around 45%). Most households who owned with a mortgage were couple families with dependent children (around 60%). Most households who rented with a state/territory housing authority were one-parent families with dependent children (around 10%). Most households who rented from a private landlord were group households (around 70%).

Source: ABS 2013c.

In 2011-12, the majority of households generated their main source of household income from wages or salaries (61%) or government allowances or pensions (25%) (ABS 2013b). For almost 1 in 10 households (9%) the main source of income was 'other income'—of which a significant proportion is income generated from investments, including property (ABS 2013b). Furthermore, 14% of these 'other income' households were renting—indicating that not all households who generate investment income as their main source of income reside in a household where they are an owner (with or without a mortgage).

First home buyers

The estimated total number of loans to first home buyers has varied over time (Figure 5.4.5). In 1997-98, there were around 97,000 first home buyer loans, increasing to almost 144,000 in 2001-02, before decreasing again in the following year (ABS 2015). These fluctuations have been influenced by the level of production of new dwellings, mortgage finance costs and the extent that investors outbid first home buyers. House price escalations could also be a contributing factor to the variability of first home buyer numbers, due to underlying market conditions and the potential for investors to compete with first home buyers.

Between 2007-08 and 2008-09, there was a significant jump in the number of first-home-buyer-financed dwellings, from around 127,000 to nearly 163,000, a 28% increase (ABS 2015). This increase is likely to be related to a short-term ramp-up of various first home buyer grants around that time, after the global financial crisis (see Box 5.4.3 for more information on financial assistance for first home buyers).

The average first home buyer was 33 years old in 2011-12 (Lovering 2014). In the same year, first homes cost households in the 25-34 year group 8.9 times their annual household income, compared with 7.8 times in 2000-01.

Figure 5.4.5: Total number of financed first home buyer dwellings, 1995-96 to 2013-14

Line chart showing the total number of financed first home buyer dwellings from 1995 to 2013. The number fluctuated over the period, peaking with around 160000 in 2008. However in 2013 the number was around 100000, the same as it was at the beginning of the period in 1995.

Source: ABS 2015.

Box 5.4.3: Financial assistance for home purchasers

Over time, government policies have focused on encouraging Australians to strive towards home ownership. This may be due to the belief that home ownership not only provides greater security in retirement and generally a stable tenure type, but is also a lifelong form of household saving and wealth creation that reduces reliance on welfare, and benefits the Australian economy (Wood et al. 2013).

A range of government initiatives and programs are available to help households pay for housing and to increase the supply of affordable housing. Under current policies there are two main forms of government assistance available to home buyers:

  • The First Home Owners Grant scheme, funded by the Australian Government and administered by state and territory treasury departments, was first introduced in 2000 to offset the effect of the goods and services tax on home ownership. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
  • State and territory governments provide various forms of home purchase assistance to eligible households to improve access to home ownership, including direct lending, deposit assistance, concessional interest rates and mortgage relief.

How many and how much?

The total number of newly financed dwellings each year has been diverse, with peaks and troughs not necessarily correlating between first home buyers and those who have bought a home before (non-first home buyers). Figure 5.4.6 shows that between 1994 and 2014, the highest number of newly financed non-first home buyer dwellings was in 2007 (over 600,000 dwellings), and the lowest number was in 1996 (just over 350,000 dwellings). Of newly financed first home buyer dwellings, the highest number was in 2009 (over 160,000 dwellings), and the lowest number was in 2011 (around 87,000 dwellings).

There was a decline in the total number of non-first home dwellings financed between 2008 and 2010; however, this was offset by an increase in the numbers of first home buyers during the same period.

Figure 5.4.6: Number of newly financed dwellings, non-first home buyers and first home buyers, 1996 to 2014

Line chart comparing the number of newly financed dwellings for non-first home buyers and first home buyers, from 1996 to 2014. For the whole period, the number of newly financed dwellings for non-first home buyers was greater than the number for first home buyers by between 200000 and 500000.

Source: ABS 2015.

The average loan size for both non-first home buyers and first home buyers has been steadily increasing at a roughly correlated rate. Generally, the average loan size of non-first home buyers has been marginally higher than for first home buyers. However, between 2010 and 2014 this gap has widened (ABS 2015).

Indigenous home ownership

A range of programs have been implemented by government and non-government organisations to increase home ownership rates for Aboriginal and Torres Strait Islander people. Census data show rates of home ownership (with or without a mortgage) among Indigenous Australians increased from 33% in 2001 to 36% in 2011 (this compares with 67% of all Australian households in 2011) (Figure 5.4.7). However, the rate of renting remains high at around twice the rate of home ownership among Indigenous Australians for each year (ABS 2012a). Over one-half (56%) of Indigenous households who owned their home outright were more likely to be one- or two-person households, and 30% of Indigenous households living in social housing had five or more usual residents living in the household (ABS 2012a).

Figure 5.4.7: Indigenous households by tenure type, 2001, 2006 and 2011

Stacked bar chart showing proportions of Indigenous households by tenure type, for 2001, 2006 and 2011. The proportion of houses in each tenure type did not change much across the period. About 10% owned without a mortgage, about 20% owned with a mortgage, about 60% rented, and less than 5% were other tenure types.

Note: Excludes tenure type 'not stated'.

Source: AIHW 2014b.

According to 2011 Census data, Indigenous households in Tasmania were more likely to own their home (52%), followed by the Australian Capital Territory (42%) and Victoria (41%).

The Northern Territory reported the lowest rates of home ownership among Indigenous households (20%). This may be attributed to the high proportion of Indigenous households living in Remote and Very remote areas, some of which have restrictions on individual home ownership and freehold land (AIHW 2014b).

Factors influencing changes in home ownership

Home ownership can be influenced by many factors, from the availability of land and housing, levels of investment and construction, to changes in the population and the economic environment.

The ins and outs

In Australia, a majority of households, once they attain owner occupancy, will stay in this tenure type (referred to as ongoing owners). Some will, however, quit home ownership and return to renting, often either as a result of unforeseen financial difficulties or to suit relocation. Among those reverting to rental accommodation, some will return in due course to owning (Wood et al. 2013).

Those who leave and re-enter home ownership tend to leverage their housing equity more actively than most ongoing owners, potentially improving their financial position. Therefore, financial and housing market variables are key determinants of the ability to re-attain owner occupancy. As such, those who leave and re-enter home ownership are more likely to capitalise on opportunities to improve their positions in the labour and housing markets than other ongoing owners or those who permanently revert to renting.

Those who leave and re-enter home ownership tend to be actively employed, possess 'variable to good' health, and are not particularly vulnerable owner-occupiers. They typically pay little to no rent during periods out of ownership, enabling them to save money for the next home purchased. Of these groups, ongoing owners report higher levels of wellbeing and lower levels of indebtedness than those who leave home ownership, whereas those who leave and re-enter home ownership report circumstances between the two (Wood et al. 2013).

Housing affordability for home owners

Housing affordability refers to a person's ability to meet costs associated with housing, based on their income. Over recent years, house prices in Australia have risen in relation to income, having a detrimental effect on housing affordability.

A lack of affordable housing means households are at risk of housing stress, and could be forced into decisions that adversely affect them. This can include the exacerbation of stress-related health conditions, increased relationship stresses, going without meals, restricted extracurricular activities for children and inability to afford additional housing costs (such as maintenance) (Yates & Milligan 2007). A lack of affordability can also limit a household's housing choices and their access to services and employment opportunities. The Reserve Bank of Australia notes that the rise in house price-to-income ratios through the late 1980s, 1990s and early 2000s reflects many factors besides income. These include: financial deregulation allowing higher borrowing and more households to access loans; lower interest rates; changes to capital gains tax; and the reintroduction of first home buyer subsidies (RBA 2012).

An indicator of housing stress is when a household's housing costs, particularly mortgage repayments or rents, exceed more than 30% of their gross income. As households on higher incomes may choose to spend more on housing, the 30% measure as applied to the bottom 40% of income earners is a better indicator of households most likely to be struggling with housing costs (see Box 5.4.4).

Box 5.4.4: Key concepts relating to housing costs and affordability

Housing affordability

In the case of home ownership, housing affordability is defined in terms of household income relative to costs associated with home ownership. Three measures of affordability have been defined. They include: purchase affordability in terms of capital costs; repayment affordability, in terms of mortgage repayments; and income affordability, in terms of the ratio between house price and income (Hill & Gan 2008).

Low-income households

Some analyses presented in this article refer to 'low-income households'. Low-income households are defined as those whose equivalised gross household income is in the bottom 40% of the income distribution. This measure is not necessarily indicative of eligibility for government assistance targeted at low-income households, and some types of assistance may also be provided to households that do not meet this definition.

This definition differs from the Australian Bureau of Statistics (ABS) definition as used in the Survey of Income and Housing (SIH), which refers to lower-income households as those in which equivalised disposable household income falls between the bottom 10% and 40% of the income distribution. When the chapter refers to data from the ABS SIH, this second definition of lower income households applies.

Housing stress

A household spending more than 30% of its household income on housing costs is said to be in housing stress. Both purchasers and renters can be in housing stress.

Money, money, money

House prices have risen significantly in recent years, outstripping increases in consumer prices and median incomes (AIHW 2014a). As such, financial constraints are often the main barrier to buying rather than renting. Many households are often unable to meet up-front transaction costs such as deposits and stamp duties, and with current housing prices, these associated up-front costs are becoming insurmountable.

Census data show a positive association between higher household incomes and the proportion of people owning their homes. Households with low to moderate incomes who manage to acquire their own homes sometimes cut back on necessities in order to meet mortgage repayments, especially in the early years; and as a result, they ultimately may be forced to choose between owning a home and going without other consumables.

For those who are unable to sustain the costs associated with home ownership, Berry and others (2010) suggest that defaulting on a home loan is the result of various related financial factors. These include credit card debt that was used to manage mortgage debt, as well as refinancing for the same purpose. Berry and others also found that those who default on mortgages demonstrated a tendency to avoid seeking financial advice early on regarding their monetary situation.

Figure 5.4.8 shows the higher likelihood of low-income earners having an affordability problem. Low-income earners generally have lower housing costs, but spend a much higher proportion of their income on housing costs for all tenure types, particularly private rental.

Figure 5.4.8: Average housing costs as a proportion of income by tenure type, 2011–12

Bar chart showing housing costs as a proportion of income by tenure type and selected low-income ranges, in 2011. The selected low-income ranges were the 11th to 30th percentile, and the 31st to 40th percentile. The tenure type with the highest housing costs as a proportion of income was private rental, with around 35% for the 11th to 30th percentile and around 27% for the 31st to 40th percentile. Being an outright home owner held the least housing costs, with less than 5% for both ranges.

Notes

  1. Housing costs are mortgage repayments, rent, and rate payments (general and water).
  2. Percentile measures are within the equivalised income distribution.
  3.  Low income households are those in the second and third income deciles.

Source: ABS 2013c.

Supply and demand

Australia has had strong house price growth since 2001, with the growth in house prices largely reflecting increases in the prices of established houses and land. The main influences of increased housing demand are thought to be financial and economic, with growing incomes per person and high levels of employment across the economy (COAG 2012). Although Australia's macroeconomic environment and demographic changes have provided a strong platform for growth in demand for housing, the supply of housing has not responded commensurately to the growth in demand (COAG 2012).

Employment, education and family structure

Home ownership often depends on a household's ability to raise a deposit and to secure and repay a loan, reflecting the availability and security of employment. Census 2011 data indicate that home ownership rates are correlated closely to employment status.

Education has been linked to home ownership, and as a broader indicator of socioeconomic wellbeing. Education is a stepping stone to employment and income which, in turn, are gateways to acquiring or accessing the finance required for home ownership.

As family arrangements change, so do housing needs and preferences. An increase in single-person households has had a negative impact on rates of home ownership (Wood & Ong 2012). Family dissolution and breakdown also have a negative impact on home ownership. This can lead to the possibility of higher rates of housing equity reversals and unexpected transitions from home ownership back into the rental market.

Helping hands

Various government programs exist that aim to assist individuals in achieving home ownership. These are intended particularly for first home buyers and low-income earners, as well as specific programs for Indigenous Australians, and are provided through a range of measures that offer financial assistance for home purchase. In 2013-14, approximately 61,000 first home owner grants were paid, and 40,300 Australian households received home purchase assistance from state housing authorities (AIHW 2015). In 2012-13, 664 households received new loan assistance through the Commonwealth Indigenous home ownership program (AIHW 2014b).

The proportion of low-income rental households paying more than 30% of gross income on housing costs has been varied over time (Figure 5.4.9). Low-income households are defined as the 40% of households with equivalised disposable household income at or below the 40th percentile (ABS 2013c). Between 2007-08 and 2011-12, the proportion of lone-person low-income rental households paying more than 30% of gross income on housing costs ranged from 45% in 2007-08 to 49% in 2009-10. Couple-only low-income rental households also reported consistently high incidence of paying more than 30% of gross income on housing costs, with a peak of 50% in 2009-10.

Figure 5.4.9: Proportion of low-income rental households paying more than 30% of their gross income on housing costs, 2007-08 to 2011-12

Bar chart showing the proportion of low-income rental households paying more than 30% of their gross income on housing costs, from 2007 to 2012. Across the period, the proportion of lone person households was around 45 to 50%. The proportion of couple with dependent children households was around 20 to 35%. The proportion of one-parent with dependent children households was around 25 to 35%. The proportion of couple only households was around 35 to 50%. The proportion of all lower income households was around 35 to 40%.

Source: ABS 2013c.

International comparisons

Australia is among a group of Organisation for Economic Co-operation and Development (OECD) countries with unaffordable house prices. When compared to long-term averages, New Zealand, Canada, the United Kingdom and Australia reported high price-to-income ratios (a measure of affordability, where median house prices are divided by median incomes).

In 2013, Australia's price-to-income ratio was 24% above the long-term average (Figure 5.4.10). In comparison, prices across the OECD were slightly below the long-term average.

Figure 5.4.10: Price-to-income ratio of selected OECD countries, percentage above or below long-term averages, 1998-2013

Line chart showing the percentages that selected OECD countries sat above or below long-term averages of price-to-income ratio from 1998-2013. The selected countries are Australia, Canada, Germany, Greece, New Zealand, the United Kingdom, and the United States. All countries remained below long-term averages of price-to-income ratio until 2001. All countries except Germany rose above long-term averages at some time during the period. The most successful countries were Australia, Canada, New Zealand, and the United Kingdom (all grouped at around 20 to 30% above long-term averages in 2013). The United States fell below long-term averages in 2008 and in 2013 sat at around -15%.

Source: OECD 2014.

Supporting households with housing affordability concerns

The provision of housing assistance to low-to-moderate-income and disadvantaged households is a role primarily for state and territory governments. However, the Commonwealth has taken a leading role in shaping housing policy through the National Affordable Housing Agreement. This includes programs to assist buyers (see Box 5.4.3); renters—such as the National Rental Affordability Scheme and Commonwealth Rent Assistance; and the provision of social housing.

Social housing

At 30 June 2014, over 390,000 households were living in social housing. Demand for social housing has been high for some time, and is continuing to increase—and supply is failing to keep up. Non-government provision of social housing is increasing—the proportion of social housing dwellings managed by community housing providers (but mainly funded by governments) increased from 35,700 in 2007-08 to 67,000 in 2013-14 (a rise of 88%).

As at June 2014, the proportion of tenants who were aged 24 or under was 37% for public rental housing and 56% for state owned and managed Indigenous housing (SOMIH). Almost 214,000 tenants (31%) aged 55 years and over were living in public rental housing, and almost 4,000 tenants (12%) aged 55 years and over were in SOMIH (AIHW 2015).

Homelessness services

In 2013-14, specialist homelessness services agencies provided assistance to 254,000 clients (AIHW 2014c)—a 4% increase from the 244,200 clients assisted in 2012-13.

Key findings from clients who accessed specialist homelessness services in 2013-14 show that:

  • the majority were female (59%) and over one-half of all clients were aged 18-44 (54%)
  • almost 60% reported housing affordability stress or financial difficulties as a reason for seeking assistance, while 'housing crisis' was reported by 30% of clients (Figure 5.4.11)
  • there was an increase in the proportion of clients needing assistance to sustain tenancies or prevent tenancy failure or eviction, from 28% in 2011-12 to 32% in 2013-14.

Figure 5.4.11: Clients of specialist homelessness services agencies, by all reasons for seeking assistance, 2013-14

Stacked bar chart comparing proportions of male and female clients of specialist homelessness services agencies, by all reasons for seeking assistance, in 2013. More females sought assistance than males. Most females (around 25%) sought assistance for domestic and family violence. Most males (around 17%) sought assistance for financial difficulties. The group with the most clients of both genders was financial difficulties, and the least was housing affordability stress.

Source: AIHW 2014c.

(For more information on homelessness services, see Chapter 7 'The Diversity of Australia's homeless population'.)

What is missing from the picture?

There is limited evidence in the following areas:

  • the relative impact of housing affordability on home ownership rates, compared with other influencing factors
  • housing supply issues such as the availability of housing suitable for people with a disability and housing outside metropolitan locations, and land tenure in remote areas
  • barriers to obtaining affordable home loans faced by vulnerable people such as households with very low incomes or reliant on income support payments
  • the sustainability of home ownership for vulnerable groups
  • how aspirations towards home ownership differ across groups and over time.

Where do I go for further information?

Please refer to the AIHW publication Housing Assistance in Australia 2015.

References

ABS (Australian Bureau of Statistics) 2009. Australian social trends, June 2009. ABS cat. no. 4102.0. Canberra: ABS.

ABS 2012. Year book Australia, 2012. ABS cat. no. 1301.0. Canberra: ABS.

ABS 2012a. 2011 Census community profiles, Australia: Indigenous profile. ABS cat. no. 2002.0. Canberra: ABS.

ABS 2013a. Australian social trends, April 2013. ABS cat. no. 4102.0. Canberra: ABS.

ABS 2013b. Household income and income distribution, Australia, 2011-12, ABS cat. no. 6523.0. Canberra: ABS.

ABS 2013c. Housing occupancy and costs, 2011-12, ABS cat. no. 4130.0. Canberra: ABS.

ABS 2015. Housing finance Australia January 2015. ABS cat. no. 5609.0. Canberra: ABS.

AIHW (Australian Institute of Health and Welfare) 2013. The desire to age in place among older Australians. Cat. no. AUS 169. Bulletin 114. Canberra: AIHW.

AIHW 2014a. Housing assistance in Australia 2014. Cat. no. HOU 275. Canberra: AIHW.

AIHW 2014b. Housing circumstances of Indigenous households: tenure and overcrowding. Cat. no. IHW 132. Canberra: AIHW.

AIHW 2014c. Specialist Homelessness Services 2013-14. Cat no. HOU 276. Canberra: AIHW.

AIHW 2015. Housing assistance in Australia 2015. Canberra: AIHW. Viewed on 29th May 2015.

Australian Government 2008. A good house is hard to find: housing affordability in Australia. Select Committee on Housing Affordability in Australia, June 2008. Canberra: Commonwealth of Australia.

Beer A & Faulkner D 2009. 21st century housing careers and Australian's housing future. Final report no. 128. Melbourne: AHURI.

Berry M, Dalton T, Nelson A 2010. Mortgage default in Australia: nature, causes and social and economic impacts. Final report no. 145. Melbourne: AHURI.

Burke T, Stone W & Ralston L 2014. Generational change in home purchase opportunity in Australia. Final report no. 232. Melbourne: AHURI.

COAG (Council of Australian Governments) 2012. Housing supply and affordability reform. Housing supply and affordability report. Canberra: COAG.

Flood J & Baker E 2010. Housing implications of economic, social and spatial change. Final report no. 150. Melbourne: AHURI.

Fox and Finlay 2012. Dwelling Prices and Household Income. RBA (Reserve Bank of Australia) December quarter. Viewed 11th February 2015.

Hill RJ & Gan Q 2008. Measuring housing affordability: looking beyond the median. UNSW Australian School of Business research paper no. 2008. Viewed 9 December 2014.

Lovering M 2014. Marrying later, renting longer. Evidence Review 58. Melbourne: AHURI.

OECD (Organisation for Economic Co-operation and Development) 2014. Housing prices database. Paris: OECD. Viewed 16 November 2014.

Wood G & Ong R 2012. Sustaining home ownership in the 21st century: emerging policy concerns. Final report no.187. Melbourne: AHURI.

Wood G, Smith SJ, Ong R & Cigdem M 2013. The edges of home ownership. Final report no. 216. Melbourne: AHURI.

Yates J 2011. Explaining Australia's trends in home ownership. Housing Finance International, Winter:6-13.

Yates J & Milligan V 2007. Housing affordability: a 21st century problem. Final report no. 105. Melbourne: AHURI.

5.5 Working-age support: financial assistance for families with children

The Australian Government provides payments and services that help families with the cost of raising children, including looking after their children's education and health care, and assisting them in balancing their parenting and work responsibilities.

The Department of Social Services is Australia's key social policy agency. The Australian Government delivers payments and services to support families and children through the Department of Human Services delivery agency—Centrelink.

This snapshot highlights some of the payments available and includes several case studies that highlight the differing payments available to support working-age Australians. Descriptions of available payments do not detail specific payment rates as they vary according to an individual's eligibility, circumstances, income and assets.

Supporting families with children

There are about 6.7 million family households in Australia (ABS 2015), more than half of which have children and may be eligible for family-related payments, including those listed below.

Birth and adoption

  • The Newborn Supplement and Newborn Upfront Payment were introduced on 1 March 2014 to help with the costs of a newborn or adopted child. These payments replaced the Baby Bonus, which was still in place prior to this date. From 1 July 2013 to 28 February 2014, Baby Bonus payments were made to around 110,300 families for around 112,200 babies (DSS 2014a). From 1 March 2014 to 30 June 2014, Newborn Upfront Payments and Newborn Supplements were paid to about 24,200 families (DHS 2014).
  • In 2013-14, nearly 145,000 eligible working parents (usually birth mothers) received Parental Leave Pay to care for their newborn or newly adopted child. This covers up to 18 weeks' pay at the national minimum wage, and cost $1.6 billion (DSS 2014a).
  • In 2013-14, nearly 75,700 eligible working fathers or partners received Dad and Partner Pay to care for a child born or adopted after 1 January 2013. This covers up to 2 weeks' pay at the national minimum wage, and cost $92.5 million (DSS 2014a).

Raising children

  • In 2013-14, Family Tax Benefit (FTB) assisted around 7 million parents and children (29% of the population) with the day-to-day cost of raising children (DSS 2014a). FTB is made up of two separate payments, which are both income-tested, and the amount paid is based on a family's individual circumstances.
    • FTB Part A is a per child payment that helps low-to medium-income families with the cost of raising and educating children. FTB Part A includes the FTB Part A end-of-year supplement, which is linked to the Healthy Start for School and the Strengthening Immunisation for Children measures. FTB Part A may include components such as the Newborn Supplement, Multiple Birth Allowance, Large Family Supplement, the Energy Supplement and Rent Assistance. At June 2014, there were around 1.6 million families receiving FTB Part A (DSS 2014a, 2014b).
    • FTB Part B is a per family payment that gives extra assistance to single-parent families and families where one parent has a low income or is not in paid employment. FTB Part B includes the Energy Supplement and the FTB Part B supplement. At June 2014, there were around 1.4 million families receiving FTB Part B (DSS 2014a, 2014b).
  • The Schoolkids Bonus provides eligible families and students with an annual entitlement for each child in primary or secondary school, paid in two equal instalments in January and July. In 2013-14, 1.2 million families received a payment, at a total cost of nearly $1.3 billion (DSS 2014a).
  • Parenting Payment provides income support for eligible parents or guardians to help with the cost of raising children (DHS 2015d). At June 2014, payments were made to around 104,000 partnered parents and around 260,600 single parents (DSS 2014b).

Working-age support case study 1: single-income family with 1 child (aged 2)

Michael and Deborah have one child, Rebecca, aged 2. Michael works full-time and Deborah stays at home.

Michael earns $82,500 a year. They are buying their own home. The family may be eligible for the following government payments:

Benefit Per fortnight
Family Tax Benefit Part A $57
Energy Supplement Part A $1
Family Tax Benefit Part B $150
Energy Supplement Part B $3
Total   $211  

Michael and Deborah may also be eligible for the Single Income Family Supplement of $300 a year and other payments and benefits.

Notes

  1. This is an estimate only, as at May 2015.
  2. Specific payment rates will vary according to an individual's eligibility, circumstances and income.
  3. Payments are also subject to change as a result of indexation.

Source: DHS 2015c.

Working-age support case study 2: sole-parent family with 2 children (aged 7 and 9)

Jackie is a single mother with two children, Ben, aged 7, and Francis, aged 9. Both children are at school.

Jackie works full-time and earns $60,000 a year. She pays $450 a week in rent. The family may be eligible for the following government payments:

Benefit Per fortnight
Family Tax Benefit Part A $307
Energy Supplement Part A $6
Family Tax Benefit Part B $105
Energy Supplement Part B $2
Rent assistance $122
Total   $542  

Jackie will also receive the Schoolkids Bonus of $844 a year and may be eligible for other payments and benefits.

Notes

  1. This is an estimate only, as at May 2015.
  2. Jackie has full-time care of both children and is not paid Child Support.
  3. Specific payment rates will vary according to an individual's eligibility, circumstances and income.
  4. Payments are also subject to change as a result of indexation.

Source: DHS 2015c.

Help with child care

  • Child Care Benefit (CCB) helps families with the cost of approved and registered care such as long, family or occasional day care, outside-school-hours care, vacation care, pre-school and kindergarten (DHS 2015a).
  • Child Care Rebate (CCR) covers 50% of out-of-pocket child care expenses for approved child care, up to a maximum amount per child per year, in addition to any other child care assistance (DHS 2015b).
  • In 2013-14, 991,000 families used approved child care services and 986,000 received a child care payment (Department of Education 2014).

Working-age support case study 3: Dual-income couple with 2 children (aged 3 and 5)

John and Liz have two children, Jack aged 3, and Felicity aged 5. Both parents work full-time. Jack goes to long day care 4 days a week and spends 1 day a week with his grandparents. Felicity is at school.

John earns $50,670 a year and Felicity earns $40,200. They pay $550 a week in rent. The family may be eligible for the following government payments:

Benefit Per fortnight
Family Tax Benefit Part A $203
Energy Supplement Part A $4
Rent Assistance $46
Child Care Benefit $181
Child Care Rebate $218
Total   $652  

John and Liz will also receive the Schoolkids Bonus of $422 a year and may be eligible for other payments and benefits.

Notes

  1. This is an estimate only, as at May 2015.
  2. The cost of child care is based on a median cost of long day child care of $77 a day as detailed in the Report on government services 2015.
  3. The estimate is based on the child being in child care for 10 hours per day.
  4. Specific payment rates will vary according to an individual's eligibility, circumstances and income.
  5. Payments are also subject to change as a result of indexation.

Source: DHS 2015c.

Payments to help study or train

  • The Assistance for Isolated Children (AIC) Scheme helps the families of primary and secondary students who cannot attend an appropriate government school on a daily basis because of geographical isolation. Some tertiary students can receive AIC where they are undertaking vocational education and training or TAFE-level courses as an alternative to school (DSS 2015).
  • Youth Allowance (student and apprentice) is a means-tested payment that provides financial support for full-time students and Australian apprentices aged 16-24 years to undertake education or training. As at June 2014, about 242,000 Australians received Youth Allowance (student and apprentice) (DSS 2014a, 2014b) (see Chapter 5 'Working-age support: assistance with employment and training').
  • ABSTUDY is a means-tested payment that helps with costs for Aboriginal and Torres Strait Islander Australians studying or undertaking a full-time Australian apprenticeship. ABSTUDY is available for secondary and tertiary students. As at June 2014, about 8,700 Australians received the ABSTUDY living allowance and 24,000 received the non-living allowance (DSS 2014a, 2014b) (see Chapter 5 'Working-age support: assistance with employment and training').

What is missing from the picture?

A person may receive various government payments and use a range of welfare services throughout their working-age life. Using data linkage to identify people who access both payments and services, or multiple services within a sector, could provide new insights into client pathways through the welfare system and help to deliver more effective programs. Such information would be otherwise difficult, burdensome or expensive to obtain.

Where do I go for more information?

For more information on payments types and their eligibility criteria, visit the Department of Human Services website.

References

ABS (Australian Bureau of Statistics) 2015. Family characteristics and transitions, Australia, 2012-13. ABS cat. no. 4442.0. Canberra: ABS.

Department of Education 2014. Annual report 2013-14. Opportunity through learning. Canberra: Department of Education.

DHS (Department of Human Services) 2014. 2013-14 annual report. Canberra: DHS.

DHS 2015a. Child Care Benefit. Canberra: DHS. Viewed 4 February 2014.

DHS 2015b. Child Care Rebate. Canberra: DHS. Viewed 4 February 2014.

DHS 2015c. Payments for families. Canberra: DHS. Viewed 23 April 2015.

DHS 2015d. Parenting Payment. Canberra: DHS. Viewed 4 February 2014.

DSS (Department of Social Services) 2014a. 2013-14 annual report. Canberra: DSS.

DSS 2014b. DSS payment demographic data June 2014. Canberra: DSS. Viewed 22 October 2014.

DSS 2015. Assistance for Isolated Children Scheme guidelines 2015. Canberra: DSS. Viewed 12 March 2015.

5.6 Working-age support: assistance with employment and training

The Australian Government assists people to gain employment and training through many avenues. This snapshot highlights some of the services and payments available and includes information showing maximum fortnightly payments available for Newstart Allowance. Specific payment rates vary according to an individual's eligibility, circumstances, income and assets.

Payments to help study or train

  • Youth Allowance (student and apprentice) is a means-tested payment that provides financial support for full-time students and Australian apprentices aged 16-24 years to undertake education or training. As at June 2014, about 242,000 Australians received Youth Allowance (student and apprentice) (DSS 2014a, 2014b).
  • Austudy is a means-tested payment that provides financial help for full-time students and Australian apprentices aged 25 and over. At June 2014, about 48,000 Australians received an Austudy payment (DSS 2014a, 2014b).
  • ABSTUDY is a means-tested payment that helps with costs for Aboriginal and Torres Strait Islander Australians studying or undertaking a full-time Australian apprenticeship to access and participate in secondary and tertiary education. At June 2014, about 8,700 Australians received the ABSTUDY living allowance and 24,000 received the non-living allowance (DSS 2014a, 2014b).

Payment while looking for work

  • Newstart Allowance provides financial help for people aged 22 or older (but under Age Pension age) who are looking for work or taking part in activities that increase the chances of finding a job. Eligible recipients must also meet an income and assets test (DHS 2015). At June 2014, about 706,000 people were receiving Newstart Allowance (DSS 2014b).
  • Youth Allowance (other) is a means-tested payment that provides financial support for Australians aged 16 to 21 years who are looking for full-time work or undertaking approved activities. At June 2014, about 114,000 Australians received Youth Allowance (other) (DSS 2014b).

Newstart Allowance

If you are: Your maximum fortnightly payment is:
Single, no children $519.20
Single, with a dependent child or children $561.80
Single, aged 60 or over, after 9 continuous months on payment $561.80
Partnered $468.80 each
Single principal carer granted activity test exemption for either foster caring, non-parent relative caring under a court order, home schooling, distance education, large family $725.40

Note: As at May 2015.

Source: DHS 2015.

Employment services

  • Job Services Australia provides job seekers with support to help them into employment. Since its inception on 1 July 2009, more than 1.95 million job placements have been made, and in 2013-14 the Australian Government spent $1.24 billion on the program (Department of Employment 2014).
  • Wage Connect provides a wage subsidy to support very long-term unemployed job seekers to transition to sustainable ongoing paid work. At 30 June 2014, it had achieved 24,173 job placements (Department of Employment 2014). New applications for the program have been paused since 6 December 2013.

Services and payments for job seekers with a disability

  • At June 2014, more than 830,000 people received a Disability Support Pension (DSS 2014b). This pension provides financial support for people aged between 16 and Age Pension age, with a physical, intellectual or psychiatric condition, who are unable to work for at least 15 hours per week at or above the relevant minimum wage, or be re-skilled for such work, for more than 2 years because of their disability; or who are permanently blind.
  • The Department of Social Services (DSS) provides funding to various Australian Disability Enterprises, which provide supported employment opportunities to people with disability. In 2013-14, DSS funded 191 Australian Disability Enterprises that supported the employment of more than 21,200 people with disability (DSS 2014a).
  • The Disability Employment Services program provides specialist help for people with disability, illness or injury to find work and keep a job. DSS helped find 46,500 jobs for people with disability in 2013-14 (DSS 2014a).

What is missing from the picture?

As noted in Chapter 5 'Working-age support: financial assistance for families with children', a person may receive various government payments and use a range of welfare services throughout their working-age life. Using data linkage to identify people who access both payments and services, or multiple services within a sector, could provide new insights into client pathways through the welfare system and help in the delivery of more effective programs. Such information would be otherwise difficult, burdensome or expensive to obtain.

This snapshot highlights some of the assistance available and as such is not intended as a comprehensive list of payments and services.

Where do I go for more information?

More information on support for employment/unemployment in Australia is available at the Department of Human Services and Department of Employment websites.

References

Department of Employment 2014. Annual report 2013-14. Canberra: Department of Employment.

DHS (Department of Human Services) 2015. Newstart Allowance. Canberra: DHS. Viewed 6 February 2015.

DSS (Department of Social Services) 2014a. Annual report 2013-14. Canberra: DSS.

DSS 2014b. DSS payment demographic data June 2014. Canberra: DSS. Viewed 29 January 2015.

5.7 Working-age support: housing assistance

Home ownership is becoming less affordable for younger Australians and low- to moderate-income earners. The proportion of Australians on low incomes who are in rental stress (pay more than 30% of their income on rent) has increased over the past 5 years (ABS 2013).

The proportion of low-income households in rental stress has increased from 35% in 2007-08 to 41% in 2011-12 (ABS 2013). Similarly, the number of homes sold or built per 1,000 low- and moderate-income households that were affordable by those households dropped from 35.5 to 27.5 per 1,000 between 2009-10 and 2011-12 (SCGRSP 2015).

The Australian Government and state and territory governments, and community-based organisations, provide assistance to households struggling to meet housing costs through a number of programs, collectively referred to as housing assistance. The proportion of Australian households receiving housing assistance has been estimated by the AIHW to be in the range of 15%-20% (AIHW 2014a).

Types of housing assistance available in Australia

Housing assistance encompasses home purchase assistance, rent assistance, the provision of social housing, and services supporting people to maintain tenancies. In 2013-14, the Australian Government and state and territory governments provided the following types of housing assistance:

  • Financial assistance with rental payments—1.3 million recipients of Commonwealth Rent Assistance (CRA), a government payment targeted at low- to middle-income earners to assist reduce rental stress (SCRGSP 2015). The maximum CRA payment was $167 per fortnight, allocated to those income units (see definition below) with 3 or more dependent children. Furthermore, over 122,300 households were assisted through Private Rent Assistance—a one-off support payment administered by the states and territories, which provided an average annual amount per household of $1,322.
    (An 'income unit' can be an individual single person with no dependent children, but it may also consist of a sole parent with one or more dependent children, a couple—married, registered or de facto—with no dependent children or a couple—married, registered or de facto—with one or more dependent children. Also see Glossary.)
  • Provision of social housing—State and territory governments and the community sector provided almost 430,000 dwellings with subsidised rents across Australia through public housing, state owned and managed Indigenous housing (SOMIH) and community housing (run by not-for-profit organisations, usually funded by government) (SCRGSP 2015).
  • Financial assistance to purchase a home—Around 61,000 First Home Owner Grants (FHOG) were administered and around 40,000 households received financial assistance to help purchase their home through state and territory Home Purchase Assistance Programs (SCRGSP 2015). FHOG numbers ranged from 19,800 in Western Australia to 900 in the Northern Territory.
  • Specialist Homelessness Services—Almost 68,000 clients of specialist homelessness services received assistance to sustain their housing tenure (AIHW 2014c).

Who is receiving assistance?

  • Around one-half (54%) of all income units receiving CRA in 2014 were 'lone person with no children' and 21% were single parents with 1 or more children. Two in 5 recipients (41%) were aged between 30 and 49 years. These figures are similar to previous years (SCRGSP 2015).
  • The provision of social housing has become more targeted over time. For example, households in 'greatest need' accounted for 74% of new allocations to public housing in 2013-14 compared with 36% in 2003-04 (SCRGSP 2015). Households in 'greatest need' include those who are homeless or at risk of homelessness due to inappropriate housing, or with very high rental costs.
  • Persons living in public housing were more likely to be older than SOMIH tenants (31% aged over 55 years compared with 12% respectively).
  • Social housing tenants were more likely to be female (around 56% for public housing and 57% for SOMIH).
  • Around 67,700 Indigenous households lived in social housing in 2013 (AIHW 2014b).
  • Over 100,000 social housing households had at least one member with a disability (unpublished NSHS 2014 data).

Who is missing out?

  • Waiting lists for social housing remain large and waiting times for many people are very long. At 30 June 2014, there were over 200,000 applicants on social housing waiting lists across Australia, excluding applications for transfer from existing tenants (AIHW 2015).
  • In 2013-14, there were around 154,000 unmet requests for service from people seeking accommodation or other services from homelessness agencies (AIHW 2014c).

How is it helping?

All forms of housing assistance can alleviate affordability pressures and have a substantial positive effect on purchase and rental affordability for a range of household types. For example, in 2014, 67% of CRA recipients would have paid more than 30% of their gross income on rent if CRA were not provided (see Figure 5.7.1) (SCRGSP 2015).

Social housing rebated-rent policies aim to reduce rental stress for tenants. Nine out of 10 public housing households (91%) received a rebate in 2014. However, social housing is available to fewer households than CRA recipients (there are around 420,000 social housing dwellings compared with 1.3 million CRA recipients).

Figure 5.7.1: Housing costs stress among renters with and without CRA, at 30 June 2014

Bar chart showing housing costs stress among renters with and without CRA, at 30 June 2014. With CRA, income units for all groups were much lower, by up to around 50%. The group with the most income units were those aged 24 years and under without CRA (around 80%).

Source: SCRGSP 2015, Tables GA 31-34.

What is missing from the picture?

The key issues that surround Australia's housing economy, which drive the demand for housing assistance, are not discussed here. These issues are linked to current housing policy in Australia and influence the current state of housing assistance.

Where do I go for more information?

For more information on housing assistance in Australia, refer to reports available online at Housing and homelessness and the Housing Assistance in Australia 2015 report. Further information about housing affordability and assistance in Australia is in Chapter 5 'Bricks and mortar - changing trends in home ownership'.

References

ABS (Australian Bureau of Statistics) 2013. Housing and occupancy costs, 2011-12. ABS cat. no. 4130.0. Canberra: ABS.

AIHW (Australian Institute of Health and Welfare) 2014a. Housing assistance in Australia 2014. Cat. no. HOU 275. Canberra: AIHW.

AIHW 2014b. Housing assistance for Indigenous Australians. Cat. no. IHW 131. Canberra: AIHW.

AIHW 2014c. Specialist Homelessness Services 2013-14. Cat. no. HOU 276. Canberra: AIHW.

AIHW 2015. Housing assistance in Australia 2015. Canberra: AIHW. Viewed on 29th May 2015.

SCRGSP (Steering Committee for the Review of Government Service Provision) 2015. Report on government services 2015. Canberra: Productivity Commission.

5.8 Labour force participation of people with disability

Employment can provide financial independence, a better standard of living and improved physical and mental health (Ross & Mirowsky 1995). However, people with disability often experience greater difficulties in seeking and obtaining employment than people without disability. Most employed people with disability receive full rates of pay, while a smaller number have their wages subsidised by the Australian Government (DSS 2014a) or are employed by Australian Disability Enterprises (ADEs) (see Box 5.8.1).

Box 5.8.1: Employment assistance available to people with disability

Supported employment services are provided by the Department of Social Services (DSS) through ADEs. ADEs are businesses that are commercial in nature and employ people with disability. Activities undertaken by ADEs include horticulture, manufacturing, food services, cleaning and retail (FaHCSIA 2008). According to the Disability Services National Minimum Dataset (DS NMDS collection) 21,000 people received supported employment assistance in 2013-14 (AIHW 2015).

Open employment services are provided by DSS through the Disability Employment Services program. These services help people with disability find and maintain employment in the open labour market (DSS 2014b). In 2013-14, 112,000 people with disability received open employment support from this program (AIHW 2015).

Labour force participation rates of people with disability

People with disability are much less likely to participate in the labour force (that is, be employed or unemployed and looking for work) than people without disability, and when in the labour force are more likely to be unemployed. (For more information on labour force participation generally see Chapter 2 'Labour force participation in Australia'.)

Over the decade to 2012, the labour force participation rate for people with disability was around 30 percentage points lower than for people without disability. Over this period the unemployment rate for people with disability was between 2.5 and 4.5 percentage points higher than for people without disability (AIHW analysis of ABS 2003, 2009 and 2012 Survey of Disability, Ageing and Carers data). In addition, in 2012:

  • the labour force participation rate of people aged 15-64 with disability was 53%, compared with 83% of people without disability
  • the unemployment rate for people aged 15-64 with disability was 9.4%, compared with 4.9% for people without disability.

Levels of participation also vary with disability status. In 2012, the labour force participation rate of people aged 15-64 with a severe or profound disability was 30% compared with 52% of people with a moderate or mild core activity limitation (Figure 5.8.1).

Figure 5.8.1: Labour force participation rate, people aged 15-64, by disability status, 2012

Bar chart showing labour force participation rate of people aged 15-64, by disability status, in 2012. People with no disability had the highest participation rate (around 80%). People with severe or profound core activity limitation had the lowest rate (around 30%).
  1. Includes some people who also have a core activity limitation.
  2. Includes some people with no core activity limitations or employment restrictions.

Source: AIHW analysis of ABS 2012 Survey of Disability, Ageing and Carers data.

People with disability may have employment restrictions, meaning they are permanently unable to work, or need ongoing assistance at work, or need special employment arrangements because of their disability. In 2012, the labour force participation rate of people aged 15-64 who had an employment restriction was 44%, compared with 83% for people who did not have disability. The unemployment rates were 12.0% and 4.9%, respectively.

Characteristics of people with disability who use employment services

In 2013-14, clients of supported employment services aged 15-64 were:

  • most likely to have a primary or other disability classified as Intellectual (77%) or Psychiatric (21%), while clients of open employment services were most likely to have a Psychiatric (54%) or Physical (51%) primary or other disability
  • more likely to always or sometimes need help with learning, applying knowledge and general tasks (95%), compared with 49% of clients of open employment services
  • more likely to always or sometimes need help with working (99%), compared with 71% of clients of open employment services (AIHW 2015).

What is missing from the picture?

Data on the labour force participation of people with disability is collected in surveys such as the Australian Bureau of Statistics (ABS) Survey of Disability, Ageing and Carers, which is conducted every 3 years. By contrast, the labour force status of all Australians is collected in the ABS monthly Labour Force Survey (LFS) (ABS 2015). The LFS does not include a disability 'flag' in its data collection processes, so disability labour force data is available much less frequently than for all people.

Where do I go for more information?

More information on the characteristics of people with disability in Australia is available from the ABS online publication Disability, ageing and carers, Australia: summary of findings, 2012. More information on people with disability who use disability support services is available from the AIHW bulletin Disability support services: services provided under the National Disability Agreement 2013-14.

References

ABS (Australian Bureau of Statistics) 2015. Labour force, Australia, February 2015. ABS cat. no. 6202.0. Canberra: ABS.

AIHW (Australian Institute of Health and Welfare) 2015. Disability support services: services provided under the National Disability Agreement 2013-14. AIHW bulletin 130. Cat. no. AUS 192. Canberra: AIHW.

DSS (Department of Social Services) 2014a. Supported wage system. Viewed 11 November 2014.

DSS 2014b. Evaluation of Disability Employment Services 2010-2013. Canberra: DSS.

FaHCSIA (Department of Families, Housing, Community Services and Indigenous Affairs) 2008. About Australian Disability Enterprises—a factsheet for school leavers. Viewed 8 October 2014.

Ross CE & Mirowsky J 1995. Does employment affect health? Journal of Health and Social Behaviour 36(3):230-243.

5.9 Older Australians staying at work

There are many benefits associated with older workers (aged 55 and over) remaining in employment. On the worker's side, being in paid employment enables them to prepare for retirement, and studies have also shown the overall benefits of work to people's health (Waddell & Burton 2006). In the workplace, maintaining workers of different ages promotes diversity of knowledge and skills. And at a societal level, employment in this age group can improve the dependency ratio (see Chapter 5 'The welfare of our working-age population'), and reduce demand on publicly funded pensions.

How many older people are working or looking for work?

In 2014, the labour force participation rate of people aged 55 and over (people working or looking for work as a proportion of this population) in Australia was 35%, while 3.7% were unemployed. By contrast, the participation rate for those aged 15-54 was 79%, while unemployment was 6.4% in 2014. The participation rate for 55 and over increased steadily from 23% in 1984, and the unemployment rate also fell overall from 5.1% in 1984, though with a peak of 9.8% in 1993 (ABS 2015).

Over the period, the participation rate increased steadily for both 55-64 year olds (from 41% to 64%) and people 65 and over (from 5% to 12%). Unemployment fell for 55-64 year olds (5.6% to 4.1%)—though with a peak in 1993 (11.0%)—but remained fairly steady for 65 and overs (1.5% to 2.2%)—see Figure 5.9.1 (ABS 2015).

Figure 5.9.1: Participation and unemployment rate, people aged 55 and over, by age group, June 1984-June 2014

Image of 2 line charts showing the participation and unemployment rates of people aged 55 and over, by age group, from June 1984 to June 2014. The age groups are 55 to 64 and 65 and over. Participation rates of both age groups rose slowly but steadily over the period. The unemployment rate of people aged 65 and over did not experience significant change, but for people aged 55 to 64 it rose sharply to around 12% in 1994 then dropped until around 2009. Unemployment rates slowly rose from around 2009 to 2014 for both age groups. Both the participation and unemployment rate is much higher for the 55 to 64 age group than it is for the 65 and over age group.

Source: ABS 2015.

As participation rates for those aged 55 and over have increased over time, retirement rates have decreased:

  • In November 1997, 2.4 million people aged 55 and over had retired, comprising 49% of people aged 55-64 and 93% of people aged 65 and over (ABS various years).
  • In 2012-13, by contrast, while the number of people 55 and over who had retired had increased (3.3 million), this only equated to 26% of 55-64 year olds, and 77% of people aged 65 and over (ABS 2013)—see Figure 5.9.2.

Figure 5.9.2: Retirement rate, people aged 45 and over, by age, November 1997 to 2012-13

Line chart showing retirement rates of people aged 45 and over, by age, from November 1997 to 2012. For all age groups, retirement rates dropped about 10 to 20% across the period.

Note: These retirement rate data were first collected on a basis comparable with most recent data in November 1997.

Source: ABS (various years).

Many people gradually transition to retirement—for instance, people working full-time are increasingly likely to take part-time work prior to retiring completely. In 2012-13, 29% of those who had previously worked full-time worked part-time in their last job before retiring, up from 25% in 2004-05. On the other hand, 13% of those in the labour force stated that they never intended to retire, an increase from 10% in 2004-05 (ABS various years).

Reasons for retirement

Of people who had retired in 2012:

  • 37% said they had retired as they had reached retirement age or were eligible for superannuation or the pension
  • 23% retired because of their own sickness, injury or disability
  • 10% had been retrenched, dismissed or there was no work available
  • 5% said their own business had closed down and a further 5% retired to care for an ill, disabled or elderly person, while the remaining 20% gave other reasons (ABS various years).

However, men and women do not necessarily retire for the same reasons. For example, 44% of men but only 30% of women retired due to reaching retirement age, while 7% of women retired to care for an ill, disabled or elderly person, compared with 2% of men.

Women also tend to retire younger than men. The average retirement age in 2012-13 was 58 years for men and 50 years for women. While retirement age has remained steady for men since 2004-05, it has increased from 47 years for women.

What is missing from the picture?

Information about retirement and retirement intentions in this snapshot is taken from the ABS Retirement and Retirement Intentions Survey (RRI), collected as part of the Multipurpose Household Survey in 2012-13. More in-depth information is available from the ABS Survey of Employment Arrangements, Retirement and Superannuation (SEARS). However, that survey was last conducted in 2007.

Neither the RRI survey nor the SEARS included information on the Aboriginal and Torres Strait Islander status of respondents.

Where do I go for more information?

For more information on retirement and retirement intentions in Australia, see the ABS report Retirement and Retirement Intentions (ABS various years).

References

ABS (Australian Bureau of Statistics) various years. Retirement and retirement intentions. ABS cat. no. 6238.0. Canberra: ABS.

ABS 2013. Retirement and retirement intentions, Australia, July 2012 to June 2013. ABS cat. no. 6238.0. Canberra: ABS.

ABS 2015. Labour force, Australia, detailed—electronic delivery, December 2014. ABS cat. no. 6291.0.55.001. Canberra: ABS.

Waddell G & Burton K 2006. Is work good for your health and well-being? London: TSO.


Notes and corrections

The current version of the publication is presented above. Previous versions of files that have been updated or corrected are presented below.

  1. (4 Nov 2015) Changes to Figure 5.4.8 on page 208—footnote corrections, data label corrections.

Online or download

These web pages make up the HTML version of Australia's welfare 2015.

report-cover Australia's welfare 2015

Australia's welfare 2015—in brief is also available in HTML format.

report-cover Australia's welfare 2015—in brief