Gov should consider free childcare for aged care staff to help grow workforce

Australia’s aged care sector faces a critical challenge: a rapidly ageing population coupled with a severe shortage of workers. With the proportion of Australians aged over 65 expected to rise from around 16% to nearly 20% by 2031, the demand for aged care services is escalating at an unprecedented rate.

The Committee for Economic Development of Australia (CEDA) estimates a shortfall of at least 110000 direct aged care workers within the next decade, potentially ballooning to over 400000 by 2050 if urgent action is not taken. To address this crisis, Australia should implement free or heavily discounted childcare services for aged care workers.

This policy would serve as a powerful incentive to attract and retain workers in a sector struggling to meet the needs of an ageing population, while also aligning with the diverse childcare regulations across Australian states and territories.

Childcare as a workforce magnet

Childcare costs in Australia are among the highest in the world. OECD data from 2020 to 2021 indicate that families with two children under three in full-time daycare spend approximately 67% of their average gross income on childcare.

For aged care workers, who often earn modest wages, these costs can be prohibitive, discouraging entry into or retention within the sector. Providing free or discounted childcare would alleviate financial burdens, making aged care roles more attractive, particularly to parents, who form a significant portion of the workforce.

This policy would also address gender disparities in the sector. Women dominate aged care roles, with many juggling caregiving responsibilities for both children and elderly relatives. The 2018 ABS Survey of Disability, Ageing and Carers estimated 2.65 million Australians provide informal care, often alongside paid work.

Offering childcare support would enable more women to enter or remain in the workforce, boosting participation rates, which for people with disabilities (a relevant comparison due to care demands) rose from 53.4% in 2018 to 60.5% in 2022.

Moreover, childcare support aligns with broader economic benefits. The Productivity Commission’s 2025 report on the care economy, which includes aged care and childcare, notes that the sector contributes 8% to Australia’s GDP and employs 12% of the workforce.

Enhancing worker retention through childcare subsidies could improve service quality, reducing the economic drag of unmet care needs.

Navigating state childcare rules

Childcare in Australia is regulated primarily at the state and territory level, with some services falling under the National Quality Framework (NQF) and others under state-specific laws. Understanding these regulations is crucial for designing a targeted childcare subsidy program for aged care workers.

• Victoria: Under the Children’s Services Act 1996, services providing education and care for four or more children under 13 are regulated, except for those under the NQF (e.g., preschools, long daycare). Staffing ratios mirror NQF requirements, with at least 50% of educators holding or working towards a diploma-level qualification and others holding a Certificate III. Limited hours services (less than 3 hours/day, 6 hours/week per child) and occasional care services have slightly different requirements, such as no mandatory educational leader or quality improvement plan. A childcare subsidy program could leverage existing approved providers to ensure accessibility for aged care workers.
• New South Wales (NSW): NSW aligns with the NQF for most services, requiring approved providers to meet educator-to-child ratios (e.g., 1:4 for children under 2). Recent data highlights inconsistencies in handling abuse allegations, suggesting a need for stronger oversight. A national worker registry, under discussion as of August 2025, could streamline childcare access for aged care workers by linking employment verification with subsidy eligibility.
• Queensland: Queensland’s Blue Card system governs working with children checks, but gaps in information-sharing have allowed unsafe workers to move between jurisdictions. The state’s childcare regulations align with the NQF, with mandatory reporting of abuse allegations within 24 hours since September 2024. Subsidised childcare for aged care workers could be integrated with existing Child Care Subsidy (CCS) frameworks, ensuring compliance with safety standards.
• Western Australia, South Australia, Tasmania, Australian Capital Territory, and Northern Territory: These jurisdictions follow the NQF for centre-based services, with variations in occasional care and limited hours services. For example, Western Australia’s Wheatbelt region faces significant aged care shortages, making childcare incentives particularly impactful. The Northern Territory records fewer abuse allegations, possibly due to under-reporting, highlighting the need for robust safety measures in any subsidy program.

Global lessons for local solutions

The United Kingdom offers a compelling model with its Free Childcare for Working Parents scheme, providing up to 30 hours of free childcare weekly for children aged 9 months to 4 years.

Eligibility requires parents to have a National Insurance number and use registered providers, ensuring quality and accountability. Australia could adopt a similar approach, tailoring subsidies to aged care workers and aligning with state regulations to ensure accessibility.

The UK’s Tax-Free Childcare scheme, which supports wraparound care, could also inspire flexible options for aged care workers with non-standard hours.

Crafting a sustainable plan

To implement free or discounted childcare, Australia could:

1. Expand the Child Care Subsidy (CCS): The existing CCS, administered by Services Australia, supports families based on income and hours worked. A targeted stream for aged care workers could offer 100% subsidies or significant discounts, prioritising low- and middle-income workers.
2. Partner with approved providers: Leverage existing NQF-approved providers to deliver childcare, ensuring compliance with safety and quality standards.
3. Address regional disparities: Rural areas, where aged care shortages are acute, often lack childcare services. Mobile or pop-up childcare units, as piloted in some remote communities, could be expanded.
4. Enhance safety measures: Integrate childcare subsidies with the proposed national screening clearance system for care workers to ensure child safety, addressing recent concerns about abuse in childcare settings.
5. Fund through aged care budgets: The 2025-26 Budget allocates $2.9 billion to aged care, including $2.6 billion for wage increases. Redirecting a portion to childcare subsidies would complement these investments, enhancing worker retention.

Tackling potential pushback

Critics may argue that childcare subsidies are costly and divert funds from direct aged care services.

However, the economic cost of inaction, projected at over 400000 worker shortages by 2050, far outweighs initial investments. Improved worker retention and recruitment would enhance care quality, reducing long-term costs associated with unmet needs. Others may claim that subsidies risk overburdening childcare providers.

This can be mitigated by aligning with existing CCS frameworks and investing in childcare infrastructure, particularly in underserved regions.

A call for urgent action

Australia’s rapidly ageing population demands a robust aged care workforce, yet the sector faces a critical shortage of workers. Providing free or discounted childcare for aged care workers would alleviate financial pressures, attract new talent, and retain existing staff, particularly women and parents.

By aligning with state-specific childcare regulations and drawing on international models like the UK’s, Australia can implement a targeted, effective policy.

With the Aged Care Act 2024 set to commence in November 2025, now is the time to invest in innovative solutions to ensure dignified, high-quality care for older Australians.