Australia is not the only country grappling with the “nanny issue”, which has been rekindled by the release of the Productivity Commission’s draft report into Childcare and Early Childhood Learning (102). Canada and several European countries are dealing with pressures to adapt or reform government involvement in the funding and provision of in-home child care. The approach and perspective of each country differs, of course, reflecting national political, economic and cultural contexts. Here, the Productivity Commission proposes that Commonwealth assistance be extended to families using nannies. Currently, support for care provided in the child’s own home is limited to a targeted group of families supported under the In Home Care scheme. The extension of Commonwealth support to families using nannies has received considerable attention in policy debate and in mainstream media.

Policy and media debates have focused on the need for a more flexible and affordable system, identified in the Commission’s Terms of Reference. While submissions and debate have pointed to potential models to deliver flexible in-home child care, particularly New Zealand’s PORSE model, less attention has been given to the potential implications of the Productivity Commission’s recommendations. This brief article describes some of the models and approaches to in-home child care that have been adopted in countries similar to Australia. It provides examples of best practice, as well as cautionary tales. It concludes with five principles for policy design of in-home child care, which should be considered and adapted to mitigate negative consequences for in-home child care. These principles are linked to outcomes for families and children and, importantly, in-home child care workers themselves.

The Productivity Commission draft report

The Productivity Commission draft report on Childcare and Early Childhood Learning (102) is a comprehensive (over 900 pages) report that describes the current Australian child care and early education policy context. It provides extensive data illustrating the low attendance rates of some groups of the population, the high costs faced by different types of families in different income brackets, and living in various locations across the country. Submissions from service users and providers, as well as more general data and research, highlight the importance of both affordability and flexibility – as noted in the Commission’s Terms of Reference. The barriers to workforce participation for parents, especially mothers, are central to the issues discussed throughout the report as well as to its recommendations. The Commission report proposes several measures to enhance the flexibility and affordability of child care, including expanding the in-home care options available to families.

The report puts forward two overarching recommendations to alter the provision of in-home child care. First, it proposes the extension of its proposed single-payment (the Early Care and Learning Subsidy, or ECLS) to families using nannies. Currently, the full-rate of Child Care Benefit and Child Care Rebate are limited to users of approved services including Long Day Care, Family Day Care, Occasional Care and Outside School Hours Care. Under the draft recommendations nannies would need to be qualified and meet the National Quality Framework regulations, which require all educators to have at least Certificate III. However, the report provides little detail about the importance of establishing the provision of quality services or the processes for monitoring the regulations in the family’s home.

The second key recommendation in relation to the provision of in-home child care relates not to child care policy, but to immigration policy. The Productivity Commission proposes changes to Working Holiday Visas (categories 462 and 417) that would make it easier for families to hire au pairs for extended periods. Currently, holders of these visas are allowed to work for any one employer for a maximum of six months during their twelve-month stay. The report recommends the “Australian Government should simplify working holiday visa requirements to make it easier for families to employ au pairs.” In particular, it proposes extending the allowable period with one employer to twelve months to allow families to use au pairs as a child care option.

Despite the fact that families employing au pairs would not be eligible for the ECLS, the report promotes this form of child care as a valid child care option for families with young children. Limited attention is given to either the lack of monitoring for this group of domestic care workers or the regulations surrounding their conditions of employment. There are potential implications for the families and for the care workers that need to be addressed if such policy is to be implemented. International experience and research provides some important lessons and caveats in relation to nannies and au pairs.

Australia in international perspective

Countries across the developed world have experienced a recent surge in the hiring of workers in the private home. This includes providers of child care, elderly care and disability care (see Morel and Williams for me information on these). Government support for care work provided in the home is facilitated through cash benefits, consumer-led vouchers or subsidies, and tax measures, among others. Governments are also involved in the regulation of domestic care work in the interests of the service user (usually employer) and employee. Within this context, Australia’s current model of In-Home Child Care is unique and some elements should be preserved.

The In Home Care scheme provides Child Care Benefit and Child Care Rebate for families who meet the eligibility criteria. These include: having more than three children under school age, having a child or family member with a disability, living in a rural or remote area, or being employed for non-standard or unsociable hours that prevent the use of mainstream services. There are approximately 7000 In Home Care places available, and so meeting the eligibility criteria does not guarantee a place for the family. In Home Care places are delivered through approved In Home Care providers, which include Family Day Care schemes and other provider organisations with In Home Care contracts. Individual In Home Care educators are, for the most part, sub-contracted to families and are only supposed to work for any one family for up to six months. If the In Home Care educator is employed directly by the family, it is the family’s responsibility to pay superannuation, leave benefits and have appropriate insurance. There are, however, some provider organisations that operate differently, by directly employing the In Home Care educators to deliver care the family’s home. This approach provides greater security to the individual IHC educator and also can offer greater assurance to families.

International experiences and research on in-home child care policy offers some important policy lessons regarding best practice; it also provides cautionary tales in relation to the design of government support for in-home child care. As the Productivity Commission recommendations revealed, both ECEC and migration policy contribute to each country’s policy approach to in-home child care. A few examples of ECEC and migration policy are outlined below.

Both the UK and New Zealand fund and regulate in-home child care as part of their early childhood education and care policy. However, the two countries take different approaches. New Zealand funds and regulates nannies as part of its Early Childhood Education policy under its Home-based Care scheme. This means that nannies are attached to a home-based provider and families using nannies are eligible for subsidies at the same rate as other home-based services, such as care delivered in the provider’s home. As the Productivity Commission points out, in-home child care services are monitored to ensure that children are cared for in a safe and developmentally stimulating environment.

In England, the national government subsidises and monitors the provision of in-home child care, as part of Ofsted’s voluntary registration scheme. Nannies registered with Ofsted are required to have first aid training, police checks and minimal qualification levels (equivalent to approximately HSC/VCE levels). Families using Ofsted registered nannies are eligible for the childcare element of the Working Tax Credit as well as employer sponsored childcare vouchers, at the same rate as families using mainstream centre-based (nurseries) and home-based (childminders) services. However, nannies are employed directly by the family and minimal processes are in place to monitor the care provided in the child’s home. Scotland has taken a different approach to regulating nannies, more similar to New Zealand’s system. In Scotland, childcare agencies must register with the regulating body, the Care Inspectorate, and nannies are then contracted through registered childcare agencies. In contrast to England, families cannot directly hire a registered nanny in Scotland.

Other examples provide models of best practice. In particular, two models in the UK offer insights into the potential for in-home child care to provide the flexibility and affordability needed by families. A unique model, called @HomeChildcare, operates in two English cities. This model is designed to provide flexible and affordable in-home child care, based on families’ particular needs and income. It is designed to provide adequate wages, working conditions and training to care workers, regardless of the income of the family for whom care is provided. In a typical market for in-home child care, nannies working for the highest income families would likely receive higher wages. @HomeChildcare operates so that the care workers are employed directly by the organisation. They are contracted to the organisation for a fixed number of hours per week, which may be increased in line with the contract if there is demand from families. The care workers are trained appropriately and their wages reflect their qualifications and vary by the number of children cared for. From the point of view of the family, there is assurance that the workers are trained and monitored; from the workers’ perspective, there is less risk of exploitation or abuse by the employer. Most families using these services are low-income families receiving the childcare element of the Working Tax Credit; additional top-up subsidies are provided through @HomeChildcare on the basis of need. These are dependent on local government funding.

A similar model called Flexible Childcare operates in Scotland, Originally established to help single parents, the service offers a targeted service for vulnerable children and families. It aims to assist families with their child care arrangements financially and logistically. In some cases this means children are cared for in their own home early in the morning and late in the evenings, when parents are working; however they often attend centre-based care or care in the provider’s home (childminding) during standard hours. In other cases it may assist a family who needs non-standard care on a particular day every week. The two examples above are designed to offer additional support where it is needed, for example for vulnerable children and families and with parents working non-standard hours. They are also designed to be fair for all families and provide the safety and quality assurance that all families deserve, regardless of workforce status or family income.

Government involvement in child care provided in the private home can be strongly influenced, or even shaped, by employment and immigration policy, as noted above in relation to the Productivity Commission’s recommendation on Working Holiday Visas. International experience in this area provides a cautionary tale for Australia. Canada’s Live-In Caregiver Program is an immigration program designed to fill the gap in child care availability in middle-class working families. Caregivers (90% of whom are Filipino) have minimum requirements including a qualification (or experience) and English-language proficiency. The immigration scheme has established rules and regulations about how much caregivers must get paid, their working and living conditions and the terms of contract. On the surface, these regulations appear to protect caregivers from exploitation; however the fact that the caregiver is living in the home of their employer exposes them to the risk of abuse and exploitation (see Brickner & Straele and Arat-Koc). Concerns about potential abuse of the program, by the caregivers and employers, have spurred recent policy debate about the need to “overhaul” the program (see Pagtakham and Curry).

In the UK, the recent expansion of the European Union and abolishment of the Au Pair visa has opened up new risks for families and the care workers (see Busch and Cox). Au pairs are no longer protected by the minimal rights and employment conditions that previously existed under the (now abolished) Au Pair visa. As it is voluntary for workers providing child care in the private home to register with Ofsted, families do not have any assurance about the capabilities and risks of the care worker. There are few incentives for either party to register, yet there are clear risks for both – exacerbated for the care worker who is viewed as a guest in the family home (see Burikova & Miller).

These examples are not intended to suggest that Australia should abandon the option for families to have au pairs, but rather that the objectives for the government, family and care workers must be seriously considered and debated; and there needs to be open discussion about the potential implications for these parties and the appropriate regulation needed to achieve government objectives and to protect families and care workers. While there is no “one size fits all” policy approach, there are a number of policy principles that should be adopted – and adapted – in different policy settings.

Policy principles

As the Government and sector stakeholders debate the recommendations by the Productivity Commission, these principles can and should be used as a framework for consideration of subsidies and regulation surrounding government support for nannies, au pairs and other forms of in-home child care.

1. Linking in-home child care to mainstream providers

Many families do not require full-time in-home child care, however the complexity and cost of combining centre-based and in-home child care arrangements means they have few options other than to hire full-time in-home child care. By linking in-home child care to mainstream providers, a combination of mainstream (Long Day Care and Family Day Care) and in-home child care can improve flexibility for the family and also for the care worker. By linking in-home child care to mainstream providers parents are familiar with the management (and staff) at the centre, children may receive continuity in care by having the same workers as at the centre, and care workers have additional protections and safeguards, as outlined in Principle 3.

2. Employment status of in-home child care workers

In-home child care is provided more effectively and equitably when care workers are employed by service organisations, not families. This means the family has a contract with the service provider, not directly with the care worker. This model provides greater protection to the care worker, reduces the potential for exploitation (intended or not) of the care worker by the family, and provides greater quality assurance for the family. Fees for services would be paid to the service organisations, with the most assistance provided to low-income families, consistent with the recommended ECLS (Principle 4).

3. Regulation and training of in-home child care workers

Public subsidies should flow to quality ECEC services. Financial assistance for families using in-home child care should be contingent on standards and monitoring procedures consistent with other forms of approved ECEC, namely the National Quality Standards. Proper training and regulation of in-home child care workers will have a positive impact on the wages and conditions to improve their status in line with the rest of the ECEC workforce, and therefore also ensure mechanisms are in place to deliver quality ECEC to children and families. Proper regulation also ensures greater accountability of public funding. The most effective way to regulate, train and monitor in-home child care workers is by having them linked to and employed by service organisations (see Principles 1 and 2).

4. Equitable funding and access to in-home child care

Financial assistance to support in-home child care should be designed to ensure that benefits are distributed equitably across income levels. High quality in-home child care provides an indispensable ECEC service to many low-income and vulnerable families, who are not able to afford the market price of such services. Enabling users across income levels to access in-home child care has benefits for parents, children and care workers. A tapered subsidy, similar to the proposed ECLS, allows parents on low-incomes, particularly those working non-standard hours, to have access to affordable options that do not prevent their participation in the paid workforce. A means-tested structure also benefits care workers by ensuring that wages are linked to a standard that reflects care workers’ qualifications and experiences, rather than families’ ability to pay.

5. Employment of migrant in-home care workers

Across Western countries, in-home child care is increasingly provided by migrant women who are typically required to have only minimal (if any) training as ECEC workers, and have few protections as migrant workers. International experience shows the strong possibility of such arrangements resulting in the exploitation of care workers. The rights and working conditions of in-home child care workers need to be protected, through national legislation that protects their social rights as citizens and workers. We know that providing better conditions for care workers can also have positive impacts for the quality of care provided to children. This Principle should be viewed in combination with Principle 3, to ensure that carers have appropriate training, qualifications and support to promote the development and learning of children according to national ECEC standards and curriculum.