Income, finance and employment
The wellbeing of families and the conditions they live in play an important role in shaping outcomes for children. Factors relating to income, finance and employment can affect children directly and indirectly, by impacting their education, home environment, housing conditions and household’s access to resources (AIHW 2012; Warren 2017).
A child’s earliest years can fundamentally shape their life chances, and families provide an important environment in which children develop critical competencies, attitudes and habits (McLachlan et al. 2013). The relationship between economic disadvantage and children’s outcomes is important as it can help determine the most effective way to improve outcomes for children from disadvantaged families (Warren 2017).
For most families, regular adequate income is the single most important determinant of their economic situation. Low income can make a family vulnerable to food insecurity and affect a child’s diet and access to medical care (AIHW 2012; Rosier 2011). Low income can also impact the safety of a child’s environment, the quality and stability of their care, and the provision of appropriate housing, heating and clothing (AIHW 2012; Warren 2017).
Material deprivation—when people do not have and cannot afford essential items or activities—can also be used to assess a household’s level of economic disadvantage. Material deprivation is an especially valuable measure of economic disadvantage among children, as resources are not always shared equitably within households (Saunders et al. 2018). Measures of material deprivation can also be adapted to reflect children’s perspectives of what is essential for an acceptable standard of living, and many recent studies have completed surveys of children across a range of age groups.
Economic disadvantage is 1 aspect of disadvantage (Box 1). This domain includes sections on family economic situation and material deprivation to provide some insight into children living in economic disadvantage. More general data on the socioeconomic status of families with children is provided in the Introduction.
Box 1: What is disadvantage?
Disadvantage is best characterised as the lack of opportunity to participate fully in society. Disadvantage can encompass factors such as low income, material deprivation and social exclusion. These concepts often overlap; however it is possible for a person or family to experience 1 element at a time (PC 2018).
This multi-dimensional approach extends on conventional measures of income poverty to better capture a person’s or family’s wellbeing, living standards and quality of life (McLachlan et al. 2013). Examining multiple dimensions of disadvantage is also more appropriate for children, who are unlikely to have sources of income and or make decisions about resource distribution within households (Saunders et al. 2018).
Policies supporting the economic situation of children
The Australian Government delivers support and services to help families with the cost of raising children, along with targeted early intervention services. The foundation of this support is providing income and family support payments to provide a broad social safety net and specific support for parents (COAG 2009).
The effects of economic disadvantage span across multiple life domains, and efforts to reduce the impact of disadvantage on children can be found in policy initiatives, such as:
- National Framework for Protecting Australia's Children 2009–2020
- Healthy, Safe and Thriving: National Strategic Framework for Child and Youth Health.
In recent years, work has also been undertaken to identify and address the longer-term impacts of disadvantage across generations (see Australia’s Welfare 2019: data insights). In 2018, the Select Committee on Intergenerational Welfare Dependence was appointed to inquire and report on matters relating to welfare dependence of families and outcomes for children.
States and territories are also working to prioritise services for those with the greatest need and improve the evidence base. Some initiatives include:
- Their Futures Matter, New South Wales
- Vulnerable Children Project, South Australia
- Great Start Great Future: Early Years Strategic Plan 2016–2020, Northern Territory
- Children and Young People’s Commitment 2015–2025, Australian Capital Territory.
The sections in this domain include a number of established national indicators; however, consistent national reporting is not available in some areas due to lack of a suitable data source and/or indicator. For more information on national data gaps, see Data gaps.
A number of topics were not included for other reasons but could be considered for future updates.
Children’s subjective view of their economic situation
The material deprivation module in the Household, Income and Labour Dynamics in Australia (HILDA) survey captures an adult respondent’s perspective of what is considered essential. Preferences recorded in HILDA may not reflect the priorities and perspectives of children in the household. In recent years, work has been undertaken to understand better how children and young Australians conceptualise and perceive their own wellbeing (see Material Deprivation Box 2), which include components of material deprivation.
Reporting by priority populations—such as Aboriginal and Torres Strait Islander children, children from non-English speaking backgrounds or children born overseas—is limited. For example, data about individual and personal characteristics are only available for those aged 15 years and over in the HILDA survey. Because of this, there are no nationally comparable data on material deprivation among children aged 0–14 from these groups.
Other related factors
Family economic situation and material deprivation capture only 2 dimensions of disadvantage. Other factors related to income, finance and employment can affect the overall health and wellbeing of children. These include parental underemployment, social exclusion, housing security and financial stress.
Future updates to this domain could include more detailed information on families’ use of income and family support government payments, as well as child support arrangements and entrenched disadvantage.
Information on the employment arrangements of carers, such as hours worked and work-life balance, and how these factors impact the time carers spend with their children or affect overall family stress could also be included.
AIHW (Australian Institute of Health and Welfare) 2012. A picture of Australia’s children 2012. Cat. no. PHE 167. Canberra: AIHW.
AIHW 2019. Australia’s welfare 2019 data insights. Australia’s welfare series no. 14. Cat. no. AUS 226. Canberra: AIHW.
COAG (Council of Australian Governments) 2009. Protecting children is everyone’s business. National Framework for Protecting Australia’s Children 2009–2020. Canberra: COAG.
McLachlan R, Gilfillan G & Gordon J 2013. Deep and persistent disadvantage in Australia. Productivity Commission staff working paper. Canberra: Productivity Commission.
PC (Productivity Commission) 2018. Rising inequality? A stocktake of the evidence, Productivity Commission Research Paper. Canberra: PC.
Rosier K 2011. Food insecurity in Australia: What is it, who experiences it and how can child and family services support families experiencing it? CAFCA practice paper. Melbourne: Australian Institute of Family Studies. Viewed 16 August 2019.
Select Committee on Intergenerational Welfare Dependence 2019. Living on the edge. Canberra: Parliament of the Commonwealth of Australia.
Saunders P, Bedford M, Brown J, Naidoo Y & Adamson E 2018. Material deprivation and social exclusion among young Australians: a child-focused approach. Social Policy Research Centre report 24/18. Sydney: Social Policy Research Centre, UNSW Sydney. doi: http://doi.org/10.26190/5bd2aacfb0112.
Warren D 2017. Low-income and poverty dynamics: implications for child outcomes. Social policy research paper no. 47. Department of Social Services. Canberra: DSS. Viewed 1 August 2019,