Children are feeling cost-of-living pressures too

The recently released Australia’s financial wellbeing: an integrated approach highlighted the need for clear policy and programs that include children and families (see Section 3.2). Adult financial wellbeing is influenced by and starts in childhood. Improving children’s health requires decreasing financial hardship. This post by Dr Anna Price from the Murdoch Children’s Research Institute details new evidence highlighting the sustained impacts of cost-of-living stress on children's mental health.

For several years, Australians have been talking about cost-of-living pressures. We have debated inflation, interest rates, housing costs, groceries and energy bills. But much less attention has been paid to the people least responsible for these pressures, and the least able to change their circumstances: children.

When adults worry about paying rent, buying groceries, managing debt, or keeping up with rising bills, children experience those pressures too. Not directly through bank balances or household budgets, but through family stress, reduced opportunities, social exclusion, and the strain that prolonged financial hardship places on parents and caregivers.

New Australian evidence suggests this is not a temporary problem.

In late 2024, the Royal Children’s Hospital (RCH) National Child Health Poll surveyed a nationally representative sample of Australian caregivers about the impacts of cost-of-living pressures on their own mental health and on the mental health of their children. The findings, recently published in Children Australia, showed that cost-of-living pressures were already affecting family mental health at scale.

Almost two-thirds of caregivers reported that cost-of-living pressures had negatively affected their own mental health, including almost one-quarter who reported a large negative impact. Around one in five children were reported by caregivers to be experiencing negative mental health impacts associated with cost-of-living pressures. Families experiencing financial hardship reported greater impacts than more financially secure families.

At the time, these findings painted a concerning picture. Economic pressures were reaching beyond household finances and into the mental health of Australian families.

Eighteen months later, the story has not gone away.

New nationally representative RCH Poll data collected in April 2026 show that cost-of-living pressures continue to affect children and caregivers. Importantly, the social patterns observed in 2024 remain consistent.

For caregivers, the burden is substantial. Around three-quarters reported that cost-of-living pressures were having a negative impact on their mental health. While the proportion reporting a large negative impact was broadly unchanged, fewer caregivers reported positive effects and more reported small negative impacts than in 2024.

For children, the pattern is more concerning.

In 2024, approximately one in five children were reported to be experiencing negative mental health impacts associated with cost-of-living pressures. By 2026, that figure had increased to almost one in three.

Adolescents appear to be particularly affected. Across both surveys, teenagers consistently had higher levels of reported negative impacts than younger children. Adolescence is a developmental period characterised by increasing social awareness, identity formation, peer comparison, and growing concern about the future. It is also a period when opportunities to participate in school, sport, social activities and community life are especially important. Financial pressures that increase family stress or limit opportunities for participation may place additional strain on adolescent mental health during this period.

The most striking finding, however, is not simply that impacts remain high. It is that the same families continue to bear the greatest burden.

Across both surveys, children were more likely to experience negative impacts when they lived in households facing material hardship, low income, sole caregiving responsibilities, or pre-existing mental health challenges. A similar pattern was seen for caregivers. Families experiencing the greatest financial strain consistently reported the greatest mental health burden.

This matters because cost-of-living pressures are often discussed as though they affect everyone equally. While many households have felt increased financial pressure, some families have far fewer resources available to absorb rising costs. For these families, economic shocks are not an inconvenience. They can mean difficult decisions about food, housing, transport, educational opportunities, healthcare, and participation in everyday activities that support children's wellbeing and development.

The findings also challenge the idea that cost-of-living pressures are a short-term economic disruption. Eighteen months after the original survey, the same patterns remain visible. If anything, the impacts on children appear more apparent.

This raises an important question for policymakers.

Australia has invested in child mental health, early childhood development, family support services and prevention-focused reforms. These investments are important and necessary. However, they may be working against a powerful headwind if families continue to experience sustained financial stress.

When a parent cannot afford essential expenses, when a child misses activities because they cost too much, or when daily life becomes dominated by financial anxiety, the effects extend beyond economics. They become health issues. They become education issues. And they become equity issues.

There is no single policy solution to cost-of-living pressures. But the findings suggest we should think more broadly about the relationship between economic policy and child wellbeing. Measures that reduce financial hardship, improve household income security, and help families access existing supports are not just economic interventions. They are also investments in children's health and development.

As governments seek to improve child mental health and reduce inequities, the financial circumstances in which children are growing up deserve attention. The experiences reported by families show that cost-of-living pressures are a fundamental part of that picture.

Moderator: Dr Jozica Kutin

Photo by Phillip Flores on Unsplash