31 July 2018

New estimates of the costs of children

This article summarises new research on the costs of children in different household types, and presents current estimates for low paid and unemployed couples with and without children and provides an independent, evidence-based benchmark for assessing the adequacy of the minimum wage and the income support system in Australia. The results provide an independent, evidence-based benchmark for assessing the adequacy of the incomes provided by key components of the social safety net including the minimum wage and Newstart Allowance. The new estimates of the weekly costs of children,  vary between $137 and $203 for families in low-paid (minimum wage) work and between $106 and $174 for unemployed families in receipt of Newstart Allowance. The authors noted that these cost estimates are far above those derived by uprating the estimates produced over two decades ago in line with movements in the Consumer Price Index (CPI), and the difference illustrates the dangers involved in adopting an uprating method that does not allow for changes in prevailing community standards. Since this is a key feature of any reasonable definition of adequacy, its absence renders the estimates produced by CPI-uprating limited to the point of uselessness.