Hundreds of the state's most vulnerable children, removed from their families and living in statutory out-of-home care, have spent the Christmas period with paid staff and face an uncertain start to 2026, an exclusive investigation reveals.
A System Under Strain
In the Hunter region alone, more than 1875 children are living in statutory out-of-home care. Approximately one in ten of these young people reside with formal, paid carers in group homes or other types of high-cost emergency accommodation.
While reforms by the Minns State Government, in power since March 2023, have led to a 35 per cent reduction in children placed in last-resort, high-cost emergency accommodation and banned the use of hotels and motels, significant dangers persist. The number of kids in other unsafe environments has risen correspondingly.
Statewide, 315 children were living in high-cost emergency accommodation as of September 30, 2025. This includes placements in 'intensive therapeutic care' or high-needs homes, which NSW Ombudsman Paul Miller has described as systematically failing children and repeatedly placing them at risk with little stability.
Placement Instability and Unmet Risks
Children in the intensive therapeutic care houses reviewed experienced an average of seven previous placements leading up to June 30, 2024, with some enduring up to 26 moves. Of the 700 children in various high-needs homes statewide, a staggering 65 per cent were reported as being at risk of significant harm while living there. Alarmingly, 37 per cent of those children did not receive the mandatory risk assessment.
The main reported risks within these homes were:
- Sexual abuse (38% of 1,748 reports)
- Child at risk due to own behaviour (36%)
- Physical abuse (11% or 193 reports)
Another failing model, Intensive Therapeutic Transitional Care (ITTC), including controversial homes run by Marist 180 in locations like Black Hill, will be closed by March 2026. The Department of Communities and Justice (DCJ) stated these homes have high vacancy rates and low numbers of children who benefit, despite costing $2.66 million per year per home—40 to 50 per cent more than an Intensive Therapeutic Care placement.
Tragic Outcomes and Pending Reforms
The dire consequences of system failure are underscored by the department's 2024 annual child death review, released online in November. It found that 89 of the 410 children aged up to 17 who died in NSW in 2024 were known to DCJ.
Most of these children had been the subject of one or more risk of significant harm reports. Causes of death included illness and disease (33), sudden infant death (15), transport accidents (10), extreme prematurity (8), suicide or suspected suicide (8), and five from inflicted or suspicious injuries.
NSW Minister for Communities and Families, Kate Washington, the MP for Port Stephens, labelled the death toll as tragic, stating the government has a responsibility to seek answers and strengthen systems. A key reform involves improving the assessment tools DCJ practitioners use.
Minister Washington has repeatedly promised a comprehensive out-of-home-care strategy, initially due by the end of 2025. This package, which will see DCJ reclaim its role as "system steward" after a decade of outsourcing, is now expected in early 2026.
Scandal and Lack of Oversight
The need for greater accountability was highlighted by a deep-dive review into Hunter-based provider Allambi Services, which has an annual state-funded budget exceeding $70 million. The review found Allambi funnelled money away from child protection services for over a decade through a scheme where senior executives bought homes and rented them back to the service at 20 per cent above market value.
A forensic audit revealed CEO Simon Walsh and other senior staff purchased 12 properties, with the NSW out-of-home-care program funding the inflated rents. DCJ was also erroneously charged for repairs, utilities, and rates on these investment properties. Marketing material encouraged "Allambi team" members to "Get above market rent buy leasing to us."
Minister Washington confirmed the scheme had been closed down and costs would be "accounted for." A spokesperson for Allambi Care rejected an allegation that a DCJ worker was also approached to participate.
Meanwhile, the system continues to struggle. In the Hunter district from June to September 2025, more than 4800 children were involved in risk of significant harm reports, but only 704 were seen by a DCJ caseworker. This means just 14.4 per cent of children suspected of being victims of neglect, abuse, risky behaviour, or domestic violence received a face-to-face visit from a caseworker tasked with their protection.
