The economic costs of child abuse and neglect

The economic costs of child abuse and neglect

CFCA Resource Sheet— September 2016
The economic costs of child abuse and neglect

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Overview

This resource sheet examines expenditure related to child abuse and neglect by departments responsible for child protection services in Australia. The broader long-term costs of child abuse and neglect to society are also discussed.

How much does Australia spend on child protection?

According to the Productivity Commission's Report on Government Services (Steering Committee for the Review of Government Service Provision [SCRGSP], 2016), in the year 2014-15 the following amounts were spent directly on providing services to children who had experienced, or who were at risk of experiencing, child abuse and neglect in Australia.

  • Nationally, approximately $4.3 billion was spent on child protection, out-of-home care services, family support services and intensive family support services (see Box 1 for definitions) in 2014-15, which was an increase of 5.8% ($239.2 million) from 2013-14. Of this expenditure, out-of-home care services accounted for the majority (56.2%, or $2.4 billion). Since 2011-12, the national expenditure on child protection and out-of-home care services has shown an average annual increase of 3.9% per year for the past 4 years, equating to a total increase of $472.5 million.
  • For every child aged 0-17 years in the Australian population, real recurrent expenditure1 on family support services, intensive family support services, child protection and out-of-home care services was approximately $815 per child in 2014-15. This figure has increased from $752 in 2011-12.

Box 1: Definitions

The annual Report on Government Services (SCRGSP, 2016) provides a breakdown of expenditure by each state and territory on four components of the child and family welfare system:

  • Child protection services (CPS): defined as services funded to perform the "functions of government that receive and assess allegations of child abuse and neglect, and/or harm to children and young people, provide and refer clients to family support and other relevant services, and intervene to protect children" (p. 15.46). 
  • Out-of-home care (OOHC): defined as "overnight care, including permanent placement with relatives (other than parents) where the government makes a financial payment" (p. 15.49), including alternative care settings such as home-based care (including relative/kinship care, foster care and other home-based care), residential care, family group homes, independent living and other placement types.
  • Intensive family support services (IFSS): those services designed to "prevent the imminent separation of children from their primary caregivers as a result of child protection concerns and to reunify families where separation has already occurred" (p. 15.47).
  • Family support services (FSS): defined as services funded to provide "lower level (that is, non-intensive) services to families in need, including identification and assessment of family needs, provision of support and diversionary services, some counselling, and active linking and referrals to support networks" (p. 15.47).

The tables in the next section show a breakdown of expenditure for child protection services as a whole. Table 1 provides an overview of real recurrent expenditure by state and territory governments, and nationally. The expenditure is provided through a breakdown of CPS, OOHC, IFSS and FSS for the 2014-15 reporting period. Tables 2-9 provide an overview of the total real expenditure of each state and territory government for 2014-15 and the previous 5 years for these same four services.

Box 2: Expenditure data tables

When interpreting data from Tables 1-9, the following notes from the Report on Government Services (SCRGSP, 2016) need to be considered.

Time-series financial data are adjusted to 2014-15 dollars using the General Government Final Consumption Expenditure (GGFCE) chain price deflator (2014-15 = 100). The GGFCE replaces the Gross Domestic Product implicit price deflator used in previous editions.

The Estimated Residential Population used to derive these rates is based on the 2011 Census. 

The expenditure category "family support services" was introduced in the 2013 report.

For child protection services expenditure per child relates to children aged 0-17 years in the residential population.

All table values are present in units of $'000.

Additional notes for individual state and territory tables are provided in the table notes.

Table 1: Real recurrent expenditure by state and territory governments, 2014-15
Jurisdiction CPS OOHC IFSS FSS Total
ACT $13,858 $34,332 $994 $2,596 $51,780
NSW $383,920 $891,124 $166,197 $109,079 $1,550,320
NT $35,424 $100,226 n.a. $41,578 $177,228
QLD $314,816 $446,045 $68,590 $31,176 $860,626
SA $62,617 $229,395 $19,268 $10,424 $321,705
TAS $19,283 $46,775 $8,150 $5,323 $79,532
VIC $199,631 $443,845 $84,432 $123,776 $851,684
WA $154,132 $246,165 $9,895 $38,109 $448,301
Australia $1,183,681 $2,437,907 $357,526 $362,061 4,341,176

Notes: Units in $'000. n.a. is given when data are not available.  Numbers may not sum due to rounding.

Source: SCRGSP (2016) Table 15A.1

Table 2: Australian Capital Territory
Year CPS OOHC IFSS FSS
2009-10 $12,076 $23,426 $1,701 n.a.
2010-11 $10,835 $29,600 $1,500 n.a.
2011-12 $12,375 $28,056 $1,440 $2,926
2012-13 $12,298 $31,442 $991 $2,871
2013-14 $11,910 $33,936 $834 $2,426
2014-15 $13,858 $34,332 $994 $2,596

Notes: Units in $'000. n.a. is given when data are not available

Source: SCRGSP (2016) Table 15A.1

Table 3: New South Wales
Year CPS OOHC IFSS FSS
2009-10 $400,088 $715,981 $158,364 n.a.
2010-11 $381,238 $743,695 $173,796 n.a.
2011-12 $323,473 $779,527 $239,590 $149,041
2012-13 $374,928 $790,566 $152,925 $126,884
2013-14 $400,553 $812,599 $152,712 $115,930
2014-15 $383,920 $891,124 $166,197 $109,079

Notes: Units in $'000. n.a. is given when data are not available. The movement in expenditure for IFSS between 2011-12 and 2012-13 is mainly due to the movement and reclassification of previously identified early intervention services (Brighter Futures) to statutory child protection activities (Strengthening Families) and overhead re-allocations due to the change in mix across all the programs. In addition, NSW data include payments to children and young people on guardianship orders.

Source: SCRGSP (2016) Table 15A.1

Table 4: Northern Territory
Year CPS OOHC IFSS FSS
2009-10 $21,095 $44,877 $556 n.a.
2010-11 $32,892 $50,744 $545 n.a.
2011-12 $43,095 $58,703 $552 $1,982
2012-13 $66,282 $78,848 $566 $36,408
2013-14 $35,868 $84,111 n.a. $44,469
2014-15 $35,424 $100,226 n.a. $41,578

Notes: Units in $'000. n.a. is given when data are not available. In years prior to 2013-14, a grant program with Catholic Care NT was reported in the IFSS category. In 2013-14 the agreement was modified to be more general so has been relocated in reporting to the FSS category. All NGO-funded programs include an element of intensive support with families; however, this is on a voluntary basis. The decrease in child protection expenditure and increases in OOHC and family support expenditure relate to a methodology change in how the agency measures its associated costs to each category. Predominantly, the changes relate to the separation of case work between child protection activities and OOHC case management. In the past case workers have been allocated to child protection. There was also an element of child protection expenditure which was reallocated to family and parent support through the methodology review.

Source: SCRGSP (2016) Table 15A.1

Table 5: Queensland
Year CPS OOHC IFSS FSS
2009-10 $257,804 $372,454 $68,142 n.a.
2010-11 $313,425 $392,205 $31,954 n.a.
2011-12 $319,999 $413,866 $34,631 $59,923
2012-13 $317,423 $424,771 $41,639 $58,739
2013-14 $303,663 $426,706 $41,701 $58,952
2014-15 $314,816 $446,045 $68,590 $31,176

Notes: Units in $'000. n.a. is given when data are not available. Queensland expenditure reflects full absorption costing on an accrual accounting basis.

Source: SCRGSP (2016) Table 15A.1

Table 6: South Australia
Year CPS OOHC IFSS FSS
2009-10 $42,434 $129,335 $9,612 n.a.
2010-11 $42,590 $140,923 $9,487 n.a.
2011-12 $52,786 $147,953 $9,719 n.a.
2012-13 $53,471 $161,198 $11,335 n.a.
2013-14 $74,045 $164,585 $18,317 $8,270
2014-15 $62,617 $229,395 $19,268 $10,424

Notes: Units in $'000. n.a. is given when data are not available. The significant increase in out-of-home care expenditure in 2009-10 was the result of growth in the alternative care system. FSS data were not available for 2011-12 and 2012-13 so the totals for SA and Australia are understated.

Source: SCRGSP (2016) Table 15A.1

Table 7: Tasmania
Year CPS OOHC IFSS FSS
2009-10 $22,328 $36,583 $4,659 n.a.
2010-11 $20,808 $41,549 $4,929 n.a.
2011-12 $23,828 $41,470 $6,043 $5,825
2012-13 $21,756 $43,265 $7,445 $4,978
2013-14 $21,320 $48,078 $7,946 $5,389
2014-15 $19,283 $46,775 $8,150 $5,323

Notes: Units in $'000. n.a. is given when data are not available. In 2014-15 the calculation methodology for allocation of umbrella costs has been altered and the total departmental overhead allocated to Children and Youth Services has reduced following significant internal restructuring of the department. This has led to a decrease in the reported umbrella costs. In 2012-13, the allocation of Targeted Youth Support Services (TYSS) was included as being relevant to the IFSS program. However, the inclusion of TYSS in future reporting is under review. In 2012-13, payroll tax was ceased in October 2012.

Source: SCRGSP (2016) Table 15A.1

Table 8: Victoria
Year CPS OOHC IFSS FSS
2009-10 $171,729 $326,148 $64,096 n.a.
2010-11 $179,487 $350,453 $64,246 n.a.
2011-12 $192,498 $367,441 $65,879 $98,374
2012-13 $190,884 $383,916 $74,614 $109,059
2013-14 $192,060 $409,081 $80,615 $114,995
2014-15 $199,631 $443,845 $84,432 $123,776

Notes: Units in $'000. n.a. is given when data are not available. The reduction in OOHC salary expenses in 2010-11 is due to the conversion of internally delivered residential care services in the North West Metropolitan region to externally managed services. CPS, IFSS, FSS and OOHC data for 2012-13 and 2013-14 are not comparable to data for earlier years as following a major restructure of the department in 2012-13, the methodology used for attributing internal costs changed. This applied particularly to departmental management and support costs where the composition of all services changed significantly in 2013-14. Data for 2012-13 have been revised to align with these changes and to provide data for the new expense categories introduced in 2013-14. Total expenditure on all services for 2012-13 has not changed and total services expenditure for 2012-13 and 2013-14 is comparable with those of previous years. Note that data for 2013-14 have been restated to include Long Service Leave under 'salary expenses' rather than 'other non salary expenses'.

Source: SCRGSP (2016) Table 15A.1

Table 9: Western Australia
Year CPS OOHC IFSS FSS
2009-10 $68,481 $193,397 $7,588 n.a.
2010-11 $71,036 $218,039 $7,594 n.a.
2011-12 $117,644 $203,161 $28,707 $38,044
2012-13 $147,868 $219,485 $8,799 $41,131
2013-14 $150,405 $229,877 $9,061 $41,446
2014-15 $154,132 $246,165 $9,895 $38,109

Notes: Units in $'000. n.a. is given when data are not available. Due to a new method of expenditure reporting, expenditure data for WA for 2011-12 is not comparable to expenditure data for previous years. CPS, IFSS and FSS data for 2012-13 and 2013-14 are not comparable to data for earlier years as in 2013-14, some services previously considered to be IFSS were re-allocated to CPS and FSS to be consistent with unit counting rules. 2012-13 data have been revised to be consistent with 2013-14.

Source: SCRGSP (2016) Table 15A.1

Prevention of child abuse and neglect

The data presented above describe the expenditure by government departments responsible for child protection in responding to an identified risk of child abuse and neglect, or the actual occurrence of child abuse and neglect. Australian governments also fund programs and services designed to prevent the occurrence of child abuse and neglect, and ameliorate the risk factors that contribute to child abuse and neglect.

Prevention services and support programs can be large scale and made available to all children and families (i.e., primary or universal prevention programs), or targeted towards children and families who are "at risk" (i.e., secondary prevention programs). The range of possible child abuse prevention activities is broad and can include direct child abuse prevention interventions, such as teaching children about "good touch and bad touch", or interventions such as health, education and child care services, which are available to support all families. Some of the broad policy areas considered particularly relevant to child abuse prevention include:

  • maternal and child health;
  • parenting education and support;
  • programs for people with a disability;
  • housing support;
  • mental health and substance use programs;
  • poverty alleviation;
  • child care assistance; and
  • domestic violence prevention (Taylor et al., 2008).

Domestic violence prevention has also been incorporated within The National Plan to Reduce Violence Against Women and their Children 2010-2022 (COAG, 2011). Programs that are not strictly designed to prevent the occurrence of child maltreatment may serve to prevent maltreatment by addressing known risk factors for child abuse and neglect. Because many services funded to provide support and assistance to families may also help to prevent child abuse and neglect, it is difficult to specifically quantify expenditure on child abuse prevention activities.

How much do states and territories spend on child abuse prevention?

Service classifications from each jurisdiction's annual report on child abuse prevention vary considerably. It is therefore not feasible to quantify and compare expenditure across states and territories on child abuse prevention.

How much does the Australian Government spend on child abuse prevention?

Although statutory child protection is primarily the responsibility of state and territory governments, the Australian Government contributes directly to child abuse prevention primarily through programs funded by the Australian Government Department of Social Services (DSS).

DSS's annual report outlines their performance for each year in relation to five identified outcomes. Outcome 2 describes DSS's objectives for families and children. The objective of Outcome 2 is "stronger families and more resilient communities by developing civil society and by providing family and community services" (DSS, 2015a, p. 59). The areas most relevant to child abuse prevention in recent annual reports have been the development of the National Framework for Protecting Australia's Children 2009-2020 (The National Framework) (see below) and the establishment of the National Standards for Out-of-Home Care - a priority project under the National Framework.

Other Australian Government departments indirectly contribute to child abuse prevention (e.g., the Attorney-General's department provides some funding towards family violence prevention); however, these services may not report on or identify their expenditure as "child abuse prevention". Therefore, it is difficult to accurately identify and quantify total Australian Government expenditure.

National Framework for Protecting Australia's Children 2009-2020

The National Framework was developed in response to the alarming and increasing rates of reported child abuse and neglect in Australia. The aim of the National Framework is to achieve "a substantial and sustained reduction in child abuse and neglect in Australia over time" (Council of Australian Governments [COAG], 2009, p.11). The National Framework has a focus on funding programs aimed at preventing child abuse and neglect. Therefore expenditure relating to prevention might be expected to increase.

In 2012, the First Action Plan (2009-12) from the National Framework was finalised, and the Second Action Plan (2012-15) was endorsed. Identifying and sharing best practice in child aware approaches to promote a better understanding of the relationship between the risk factors for child abuse and neglect was included in this Second Action Plan 2012-15 (COAG, 2013)22. In 2015, the Third Action Plan (2015-18) was launched. The three strategy areas for the Third Action Plan are:

  • Early intervention with a focus on the early years, particularly the first 1,000 days for a child.
  • Helping young people in out of home care to thrive in adulthood.
  • Organisations responding better to children and young people to keep them safe.

National Children's Commissioner

Following an announcement by the Australian Government in 2012, the inaugural National Children's Commissioner was appointed to office in February 2013 for a 5-year term. This position sits within the Australian Human Rights Commission, and aims to promote awareness and to monitor programs on issues relating to children and young people. Appointing a National Children's Commissioner was identified as a key outcome of the National Framework (COAG, 2009).

What are the long-term costs of child abuse?

The immediate economic cost to the community of providing child protection services is only one facet of the overall cost associated with child abuse and neglect. The longer term or indirect financial cost associated with child maltreatment is also substantial and borne not by the perpetrator but by the child and society (Segal, 2015). National and international research has demonstrated a number of adverse impacts of child abuse and neglect, many of which are associated with significant financial costs for individuals and the communities in which they live, such as:

  • future drug and alcohol abuse;
  • mental illness;
  • poor health;
  • homelessness;
  • juvenile offending;
  • criminality; and
  • incarceration (CFCA, 2014).

Not all children who have suffered abuse or neglect go on to develop these problems; however, research suggests that the experience of child maltreatment can come at great cost to individuals and society more broadly. The consequences of child maltreatment can impact on social cohesion and result in considerable costs and ongoing government expenditure (Segal, 2015). Consequences such as as educational failures, premature death and low workforce participation can lead to a considerable reduction in the productive potential of society and a lower gross domestic product (Segal, 2015). Taylor et al. (2008) estimated that the annual cost in 2007 of child abuse and neglect for all people ever abused in Australia was $4 billion, while the value of the burden of disease - a measure of lifetime costs of fear, mental anguish and pain relating to child abuse and neglect - represented a further $6.7 billion. The report also estimated that the lifetime costs for the population of children reportedly abused for the first time in 2007 would be $6 billion, with the burden of disease representing a further $7.7 billion.

Kezelman, Hossack, Stavropoulos and Burley (2015) reported that a conservative estimate of the cost to Australian taxpayers of unresolved childhood trauma is at least $6.8 billion per year for child sexual, emotional and physical abuse alone. When broader definitions of childhood trauma are taken into account, this figure increases to at least $9.1 billion (Kezelman et al., 2015).

Economic research on young people leaving out-of-home care also illustrates the high financial cost associated with inadequate support for children transitioning from care to independence. Raman, Inder and Forbes (2005) projected the direct costs to the Victorian State Government of service provision to care leavers, taking into account housing, the justice system and corrective services, police, drug and alcohol services, mental health, health, employment, and lost GST revenue. The total lifetime costs associated with outcomes for young people leaving care were estimated to be $738,741 (2004-05 dollars) per care leaver. Estimating that there are, on average, 450 care leavers per year in Victoria, Raman et al. determined that the total cost per year for the state government was $332.5 million. The authors cautioned that this represents a conservative estimate of the direct cost to state governments of providing services to care leavers and argue that savings could be made by better supporting young people as they transition from care to independent living. (The costs of young people leaving care are discussed further in Osborn and Bromfield [2007].)

Conclusion

The direct economic costs of child abuse and neglect are substantial. The additional costs associated with long-term effects of child abuse and neglect make the prevention of child abuse and neglect a priority. More importantly, preventing child abuse and neglect is a critical because of the social costs of child abuse and neglect, and the imperative to prevent children from experiencing its devastating effects.

References

  • Child Family Community Australia. (2014). Effects of child abuse and neglect for children and adolescents. Melbourne: CFCA information exchange. Retrieved from <www.aifs.gov.au/cfca/publications/effects-child-abuse-and-neglect-children-and-adolesce>.
  • Council of Australian Governments. (2009). Protecting Australia's Children is Everyone's Business: National Framework for Protecting Australia's Children 2009-2020. Retrieved from <www.dss.gov.au/our-responsibilities/families-and-children/publications-articles/protecting-children-is-everyones-business>.
  • Council of Australian Governments. (2011). National Plan to Reduce Violence Against Women and Children 2010-2022. Canberra: DSS.
  • Council of Australian Governments. (2013). Second Action Plan 2012-15 of the National Framework for Protecting Australia's Children 2009-2020. Canberra: DSS.
  • Department of Social Services. (2014). Annual Report 2013-14. Canberra: DSS. Retrieved from <www.dss.gov.au/about-the-department/publications-articles/corporate-publications/annual-reports/dss-annual-report-2013-14>.
  • Department of Social Services. (2015a). Annual Report 2014-15. Canberra: DSS, Retrieved from <www.dss.gov.au/about-the-department/publications-articles/corporate-publications/annual-reports/dss-annual-report-2014-15>.
  • Department of Social Services. (2015b). Third Three Year Action Plan, 2015-18, Driving Change: Intervening Early, National Framework for Protecting Australia's Children 2009-20. Canberra: DSS.
  • Kezelman, C., Hossack, N., Stavropoulos, P., & Burley, P. (2015). The cost of unresolved childhood trauma and abuse in adults in Australia. Sydney: Adults Surviving Child Abuse and Pegasus Economics. Retrieved from <www.blueknot.org.au/Portals/2/Economic%20Report/The%20cost%20of%20unresolved%20trauma_budget%20report%20fnl.pdf>
  • Osborn, A., & Bromfield, L. (2007). Young people leaving care (Research Brief No. 7). Melbourne: Australian Institute of Family Studies. Retrieved from <www.aifs.gov.au/cfca/publications/young-people-leaving-care>.
  • Raman, S., Inder, B., & Forbes, C. (2005). Investing for success: The economics of supporting young people leaving care. Melbourne: Centre for Excellence in Child and Family Welfare.
  • Segal, L. (2015). Economic issues in the community response to child maltreatment. In B. Matthews, D.C. Bross (Eds.), Mandatory reporting laws and the identification of severe child abuse and neglect, Child Maltreatment 4(p.193-216). Dordrecht: Springer Science+Business.        
  • Steering Committee for the Review of Government Service Provision. (2016). Report on Government Services 2016. Canberra: Productivity Commission. Retrieved from <www.pc.gov.au/research/recurring/report-on-government-services/2016>.

Footnotes

1 Real recurrent expenditure refers to expenditure that does not result in fixed assets.

2 The good practice guide to Child Aware Approaches: Keeping children safe and well defines Child Aware Approaches, outlines the philosophies and principles underpinning this strategy, and offers case study examples of how the principles can be applied in practice.

Authors and Acknowledgements

This paper was updated by Joanne Commerford, Research Officer, with the Child Family Community Australia information exchange at the Australian Institute of Family Studies.

Previous editions have been compiled by Lucy Ockenden, Veronica Meredith, Deborah Scott, Lalitha Nair, Leah Bromfield, Prue Holzer, Alister Lamont, Katie Kovaks and Nick Richardson.

The feature image is by Anne Roberts, CC BY-NC-SA 2.0.

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CFCA Resource Sheet
Published by the Australian Institute of Family Studies, September 2016.

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