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The Tax Office Punishes Stay-at-Home Mothers

The Tax Office Punishes Stay-at-Home Mothers

THEMES:
Author: Australia Needs Fatima
12 June 2026

Compare The Pair

Imagine two families, the Joneses and the Browns. They both make $120,000 a year before tax. They both live on the same street in the same suburb, and both have two kids. In the Jones family, both parents work, and so they decided to send their children to childcare; the Browns, however, made the decision for the mother to stay home to look after the children; after all, no one is better suited to look after the kids than their mother. However, this single decision leaves the Browns in a far worse position than the Joneses. Over the next 10 years, the Joneses will pay $194,400 in taxes, while the Browns will pay $319,200! Not only this, but the Joneses will have access to government-subsidised childcare, equivalent to $25,680 per year. The Browns get no assistance from the government.

The picture doesn’t get any better for the Browns. At the birth of their children, Papa Brown was offered 4 weeks off with paid parental leave for each child. This is funded by the government at a set rate, which means that the Browns are given $3,792 by the government to let him stay at home for four weeks for each child. The Joneses get a much more generous deal. The Joneses are paid $24,648 by the government to let the father stay home for 4 weeks and the mother for 22 weeks. And this also doesn’t even include the Working Australian Tax Offset given to working Australians that would benefit the Joneses over the Browns. Given all of these penalties, why would any family want to have a stay-at-home mother?

 

Children Are Better Off With Stay-at-Home Mums

The first few years of a child’s life are among the most important years of their life for emotional, physical, and mental development. Children’s neurological development is the most rapid during these formative years. The research shows that the more time that children spend in childcare, the more behavioural problems they’ll exhibit later in life. The NICHD Study of Early Child Care found that more time in childcare during a child’s first two years predicted lower social competence and cooperation, higher rates of behavioural problems, higher externalising problems (acting out aggressively and defiantly towards others), increased adult-child conflict, and increased negative peer play regardless of childcare quality.  The study also found that stay-at-home mothers do best when they are supported and don’t suffer financial or emotional stress.

While studies in other outcomes show mixed results, there are plenty of reasons why families like the Browns may want to keep their children at home. The first and most obvious reason is to raise their children with their family’s religious, political, and cultural beliefs. Families can’t guarantee that a childcare centre is going to raise their child with their beliefs, and the best way to guarantee their children will hold their values is to raise their children themselves. 

The second reason is that having a stay-at-home mother makes household management much easier. Cooking, cleaning, dropping kids off at school, grocery shopping, and other weekly errands are more difficult to manage when both parents work full-time. This increases household stress and leaves less time for leisure. Having a stay-at-home mother means someone who can focus on these tasks, which allows both parents more leisure time and less stress. And having less stress at home creates a better environment for children to flourish.

 

The Concerns Of Childcare

Families like the Browns can also have legitimate concerns about sending their children to childcare. Recent Four Corners specials called Betrayal of Trust and Hunting Ground uncovered horrific stories of sexual and physical abuse happening in Childcare Centres around Australia.[1] They reported that in 2024 alone there were 26,000 cases of serious incidents, each day 7 children go missing or are locked out of centres, more than 3000 babies and toddlers are sent to hospital each year with injuries sustained in childcare, and 1 report of sexual misconduct and offences is reported each day in Victorian, WA, and NSW childcare centres with Queensland, South Australia and Northern Territory not having any reportable conduct schemes. Like all businesses, childcare centres exist to make a profit. The Four Corners report also showed that many childcare centres undertook cost-cutting measures which led to thousands of health and safety breaches. These reports are on the rise each year from previous years, and families like the Browns may be genuinely concerned about the risk of sending their children to childcare centres.

Major cases of child abuse are also alarming families like the Browns. There’s the case of Ashley Paul Griffith, who pleaded guilty to 300 charges of abusing and raping over 60 children in Queensland and New South Wales over 20 years, with some of his victims being as young as 12 months old.[2] There is also the alleged case of Joshua Brown, who has been charged with 156 offences of sexual assault of 12 victims across dozens of Melbourne childcare centres.[3] These cases make the risk of sending children to childcare centres too great for many families, and choosing to have a stay-at-home mum like the Browns is a respectable alternative.

 

The Grim Reality

Despite the many reasons the Browns may prefer to have a stay-at-home mother, their choice is punished by our tax system. The Browns have to pay significantly more tax, and they receive significantly fewer benefits for making this choice. The government currently incentivises the choice of sending children to a potentially harmful childcare centre and penalises the safer option of mothers staying home with their children. This takes away the freedom of many families to make this choice because it isn’t financially feasible, and for those that do, it can put significant financial and emotional stress on these families, leading to worse outcomes for their children. The choice of the Browns is not being respected as the same as the Joneses, and we need to set this injustice right.

 

The Modest Proposal

The solution to this problem isn’t new, and it already exists in several countries. The idea is called Income-Splitting, and it happens in France, Germany, the United States, Portugal, Switzerland and many other countries. It allows families with at least one child to divide their household income between the parents (and in France, even the children) for tax purposes. This would mean that the Browns would pay the same amount of tax as the Joneses. This would allow the Browns to save more than $120,000 over 10 years.

The second solution is to address the imbalance between the government support for childcare and the lack of an alternative. A neutral option that would support both families and replace the current Childcare Subsidy scheme would be a refundable tax offset paid per child under school age. This would effectively be a universal childcare payment made directly to the family rather than to childcare providers. This policy allows families like the Browns the option to keep one parent at home or use that money to pay to send their child to a childcare centre like the Joneses. Countries like Finland and Norway already do something like this, and it stops the government from putting their thumbs on the scales by giving families more freedom to choose how they raise their children.

 

What Can You Do About It?

Family In Danger is currently running a petition to undo these punishments against stay-at-home Mums. If you believe that our government needs to make these changes and stop punishing people like Mama Brown, then sign the petition on the left.


References:

  1. https://www.abc.net.au/news/2025-03-17/betrayal-of-trust/105063150, https://www.abc.net.au/news/2025-10-27/hunting-ground-four-corners-childcare/105939378
  2. https://www.abc.net.au/news/2024-11-29/daycare-paedophile-ashley-paul-griffith-sentencing/104663114
  3. https://www.police.vic.gov.au/investigation-alleged-incidents-childcare-centres

Stop Punishing Stay-at-Home Mothers! Introduce Income Splitting and Replace the Childcare Subsidy with a Universal Child Payment!

Dear Treasurer Chalmers,

Families across Australia have made the choice to have their mother stay home to raise their children. Under Australia’s current individual tax system, this choice costs them tens of thousands of dollars more in tax every single year compared to a family earning the same amount with both the father and mother working. This is not a tax on higher earnings. It is a tax on how we choose to raise our family.

On top of this tax penalty, the government spends over $16 billion per year subsidising institutional childcare while offering nothing equivalent to families with a stay-at-home mother. Your policy is about entrenching one model of raising children as the government’s preferred choice, at the expense of families who choose differently.

The choice to have a stay-at-home mother is perfectly reasonable considering the reports by the ABC’s Four Corners investigations, which revealed a sector riddled with serious safety breaches, profit-driven cost-cutting, and, in the worst cases, predatory abuse of the most vulnerable children in its care. Families who choose to keep their children home are not making an irrational choice. They are making a considered one — and they deserve to be supported, not punished.

The solutions are straightforward and already proven overseas. Income splitting is practised in Germany, France, the United States, and many others. A universal child payment paid directly to families — regardless of how they choose to provide care — already exists in Finland and Norway. Australia does not need to invent anything new. It simply needs the political will to treat all families equally.

I call on you to:

  1. Introduce income splitting for fathers and mothers with dependent children, so that a family’s combined income is divided equally between husband and wife for tax purposes, recognising the economic reality of how families actually function.

  2. Replace the Child Care Subsidy with a universal child payment — a refundable tax offset paid per child under school age, made directly to families rather than to childcare providers. This gives every family, whether they use institutional care or a stay-at-home mother, equal government support for the raising of their children.

     

Respect the choice to raise your own children — stop punishing stay-at-home mothers!

With concerned regards,

 

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