Understanding the Context

Childhood exposure to economic hardship refers to conditions in which families do not have sufficient money to meet their basic needs such as having adequate shelter, food, health care, and early education. There are two families that are more affected by economic hardship in Australia: those who belong to single parent families and couple families under housing stress or homelessness. According to ABS statistics, 51% of sole parents are employed compared to 73% of couples where parents are employed (Australian Bureau of Statistics, as cited in Australian Council of Social Service & UNSW Sydney, 2025). This can be one of the reasons why 37% of children in single parent families are living in poverty (Bankwest Curtin Economics Centre & Valuing Children Initiative [BCEC & VCI], 2025). It all forms part of a bigger picture of economic disparity since the bottom 20% of people hold 7.4% of the income while the top 20% hold 63% (Australian Bureau of Statistics, 2023).

While the economic disadvantages described by Grace and Baird (2022) can be considered as structural social inequalities, and not a lack of individual skills and abilities, this approach can also turn a family into a victim of disadvantage, instead of recognizing their agency, as explained by Wong et al. (2017). Ecological systems theory proposed by Bronfenbrenner (1979 as cited in Grace & Baird, 2022) is helpful in comprehending the complex interrelatedness of a child's development and the impact of family, the early childhood environment, the community, and the wider society.

The economic disadvantage in the microsystem will influence the direct experience of housing, nutrition, and family relations, while the employment situation and support mechanisms in the exo-and macrosystem will indirectly affect the opportunities of a child. Therefore, the poverty cannot be analyzed from only an individual family's perspective; it needs to be seen in the broader context (Grace & Baird, 2022).

 

The problem is escalating since child poverty increased from about 13% in 2020 to an estimated 15.6% in 2025, amounting to an extra 236,000 children in just four years due to rising cost of living coupled with income assistance lagging behind inflation (Australian Council of Social Service & UNSW Sydney, 2025).

Impact on Children and Families

Financial pressure is associated with instability in households, inconsistency in daily routines, and poor nutrition and access to health care that can impact children's health and development in terms of physical, cognitive, and self-regulation. Specifically, when parents undergo stress themselves, children are impacted adversely in their health and developmental outcomes (McMahon & Grace, 2022). On a social level, children will be excluded from social events that have expenses attached to them. The implications for services are that children will not attend services regularly, and there is also the danger that the support (e.g., fee reminders) can make people feel judged. The evidence base is mostly correlational in that financial stress occurs alongside other risks like stress and isolation of parents.

Social Policy & Australian Responses

Child Care Subsidy (CCS) – Three Days a Week Guarantee (Jan 2026): Families who qualify for Child Care Subsidy receive a minimum of 72 hours per fortnight regardless of participation in work or study, as opposed to the former activity test requirement (Department of Education, Australian Government, 2026). It is expected that this reform will enable another 126,000 children to participate in early learning. The reform ensures increased access but not increased affordability, because subsidy rates are still determined by the income level and gap fees are still not funded. Housing/rent assistance depends on the state, thus there is an equity issue based on postcodes.

Strategies for Practice

Informed by resilience theory, which argues that good outcomes in challenging circumstances are possible only when protective factors are built up, not when the stressors themselves are addressed (Grace & Baird, 2022), there are five evidence-based strategies for working with children and families experiencing economic disadvantage: flexibility in fees based on family hardship; food security initiatives built into the service (for instance, through the use of Foodbank partnerships); reduction of incidental costs related to excursion and resource costs; family-friendly, stigma-free engagement based on relationships (McMahon & Grace, 2022); and active referrals to financial counseling and income support services, which have been found to be more effective than passive referrals (Wong et al., 2017).

Community and Professional Partnerships

  • The Smith Family — Learning for Life programs connecting disadvantaged families with early learning support.
  • Brotherhood of St Laurence — material aid, financial counselling, and advocacy.
  • Foodbank Australia — food relief for service-based meal programs.
  • Services Australia Community Engagement Officers — support navigating income support and CCS.
  • Financial counsellors — free, confidential support accessible via educator referral.

Resources for Educators and Children

Projects/Programs: The Smith Family – Learning for Life (thesmithfamily.com.au), which links families to a coordinator and connects children to learning support in the community. Foodbank Australia – School Breakfast Program (foodbank.org.au), working with food insecurity by having universal breakfast habits that do not single out any particular child. Raising Children Network – resources for talking about financial hardship (raisingchildren.net.au), providing helpful and research-based advice on the topic of financial hardship. Sesame Street in Communities – Family Homelessness resources (sesamestreetincommunities.org), using the Muppet character Lily to help children process housing instability.

StoryBooks (birth-5): Maddi’s Fridge (Brandt) – a child learns about their friend’s family being unable to afford food. Last Stop on Market Street (de la Peña) – recontextualizing economic differences through joy and community, not deficit. Still a Family: A Story of Homelessness (Sturgis) – a story of family love through homelessness. Old Blue Is My Home (Judge).

Media/Videos: Sesame Street in Communities - Lily’s Story (sesamestreetincommunities.org), providing shared language for housing instability amongst children. ABC iview - Play School, showing varied family backgrounds as being normal. Raising Children Network Video Resources, increasing the professional knowledge of educators about financial stress. Sesame Workshop - Coming Together Series, emphasising that belonging and connectedness are protective factors.

These videos build empathy as they tell the story of hardship from the viewpoint of relatable characters instead of just statistics. They build understanding as they give children the language to describe their or other children’s experience. One limitation of these resources is that they mostly solve the problem of hardship via an act of kindness, hence simplifying poverty.