Historic $1.2b child protection overhaul boosts foster carer pay

Foster carers looking after the state’s most vulnerable children will have their allowance increased for the first time in 20 years.

Foster carers in NSW will get an allowance boost for the first time in 20 years.

Foster carers looking after the state’s most vulnerable children will have their allowance increased for the first time in 20 years, as part of a record $1.2 billion child protection package in Tuesday’s state budget.

The Minns government will spend $143.9 million to raise the foster care allowance by 20 per cent. A government allowance is paid to foster carers to cover costs associated with caring for disadvantaged children, an amount that has not kept up with cost of living pressures.

Under the new allowance scheme the carer of a typical 14-year-old will receive an increase from $880 to $1056 per fortnight – an increase of $4,576 per year.

A carer of a typical five-year-old child will receive a tax-free allowance increase from $656 to $787 per fortnight, equating to a $3,411 increase per year.

The NSW budget included a historic $1.2 billion package to reform the state’s child protection.

The move comes after the number of new foster carers opting to care for children dried up over the last ten years.

The government will also spend $797.6 million to reform the broken out-of-home care system, which has resulted in burnt out child protection workers leaving in droves.

To combat this, the government is spending $191.5 million to recruit more than 200 caseworkers. The funding will also go towards a pay rise for the existing 2126 case workers, which was negotiated earlier this year.

Part of the new funding package will go towards overhauling the number of private providers operating in the system.

Treasurer Daniel Mookhey delivers the 2025/26 budget. Picture: Rohan Kelly

Under the former government a large portion of the out of home care sector was outsourced to private providers. Despite being paid expensive government grants, non-government providers are required to provide very little oversight over the treatment of children in their care.

Part of the funding package will also include $10 million for the Office of Children’s Guardian, to help the department oversee private providers and ensure child safety.

More than $49 million will also be spent to build 44 government-owned residential care homes to house children over 12-years-old with complex needs.

Much of the $1.2 billion has been paid for by ending the practice of placing vulnerable children in motel rooms monitored by expensive labour hire firms. Additionally the number of children placed in all types of high-cost emergency arrangements, has reduced by 35 per cent since November 2023. As a result of those changes, the government has reinvested $378 million worth of savings from the last 18 months into the new package.

Families and Communities Minister Kate Washington called on more families to sign up to be foster carers in light of the new funding.

“If you are young or old, married or single, rent or own your own home – if you have got room in your home and in your heart please consider becoming a foster carer,” she said.

“This (new funding) is to allow foster carers to do the incredibly important work they do to support children and young people – to give them safety, stability and love and lay the pathways for them to have the bright futures that they deserve.”

Originally published as Historic $1.2b child protection overhaul boosts foster carer pay