The cost of raising children has risen sharply over the past two decades because of changing expectations of what they need to live a healthy life.
Research published by the Australian Institute of Family studies on Tuesday sets an updated benchmark for the weekly cost of raising children in unemployed and low-income families. It finds the minimum cost of raising one child ranges from $140 to $170 a week.
The figures are likely to influence future calls for an increase to the minimum wage and income support.
Researchers from the University of New South Wales’ social policy unit used a “budget standards” approach to work out the weekly cost: they identified all items required to reach a certain standard of "healthy" living, priced each one and came up with a total cost.
Low-income families also told researchers how they managed on their budgets, which turned up such trends as “clothes swapping” for school uniforms and buying home-brand or generic items in supermarkets.
The researchers found the largest single contribution to the overall family budget in all cases was housing costs. For example, an unemployed couple with two children spends one-third of their income on housing.
Other costs included increased energy bills, and transport costs associated with ferrying children to school and activities.
For unemployed families, the budgets were set 15 to 25 per cent below those of corresponding low-income families to reflect several factors, including the increased costs associated with working, and cost-saving strategies used by people who are unemployed.
The new estimates are higher because the prevailing community standards have risen over the past two decades, researcher Peter Saunders said.
“We included the costs of mobile phones, which are now commonplace, and what it costs to feed and clothe children by pricing shelf items in stores like Woolworths and Kmart,” he said.
The first budget standards were developed 20 years ago when the federal government commissioned the UNSW to prepare them. They have been used to inform decisions about the setting of the minimum wage, levels of child support and foster care allowances.
But two decades on, researchers say there is an urgent need to update the original benchmark.
“The results provide important data for assessing how much income unemployed and low-paid families need, and can guide the setting of the Newstart allowance and the minimum wage,” Professor Saunders said.
The new budget standards found the estimated weekly costs for low-paid families to raise two children (a six-year-old girl and a 10-year-old boy) is $340 a week, or $170 per child.
At the lower, unemployed standard, the costs of raising two children was $280 a week.
The budgets should allow each person to live a healthy, social life in all its dimensions, but they are extremely ‘‘tight’’ and provide no room for further reductions without compromising the healthy standard, the researchers note.
Professor Saunders said they might allow children to have one swimming lesson a week, for example, or adults to consume a couple of glasses of wine.
The most common benchmark used to set a minimum level of income is the poverty line, which is the income needed to support a minimal level of material consumption and is usually set at 50 per cent of median income.
Median income for a family in Australia (at the last census) was $1438 a week (or $74,776 a year), according to the ABS.
This new budget standard is intended to be higher than the poverty line because it allows for a degree of social participation needed for a healthy lifestyle.