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The child endowment scheme was introduced by the Menzies government in 1941. Its main spokesman was the Minister for Labor, Harold Holt, 'the only bachelor in the Federal Cabinet' as the Australian Women's Weekly pointed out.
When the legislation was first passed in 1941, children in institutions run by State or Commonwealth governments were not eligible to receive child endowment payments. (Children in orphanages run by religious or charitable organisations were paid child endowment benefits.) In the Australian House of Representatives, during the second reading of Child Endowment bill, Mr Pollard (Labor member for Ballaarat) voiced concerns about the exclusion of children in government-run orphanages:
'… that is an anomaly. Many parents in well-to-do circumstances are eligible for this benefit … the bill definitely treats the inmates of orphanages differently from the children of parents who can afford adequately to maintain them … a distinct injustice is being done to a particularly unfortunate section (2 April 1941).'
Maurice Blackburn predicted, 'I think that there will be a good deal of friction over this matter between State Governments and the Commonwealth Government'.
Indeed, representations were made to the Commonwealth Government after the passage of the Child Endowment Act 1941 about various anomalies. The Western Australian Premier made 'very strong representations' on behalf of Aboriginal children in dormitories who were ineligible for child endowment. State governments claimed that it was anomalous that state-run institutions did not receive child endowment, but if they boarded a child out to a foster mother, she could receive the Commonwealth's child endowment (as well as receive support from the state government).
Aboriginal missions also made representations to the Australian government, about which children were eligible to receive child endowment. It was unclear whether families with children who visited the mission on occasion, but still hunted and lived a 'tribal life' were to be judged as 'nomadic' and thus ineligible for child endowment under section 15 of the legislation.
In Victoria in late 1941, there was controversy when the Charities Board ceased its regular grants to religious and charitable institutions, as they were receiving 'a large amount of revenue from the Commonwealth child endowment scheme' (Victorian Hansard, 27 November 1941).
The regulations were amended in March 1942, so that payments could be made to hospitals for children who were admitted for periods of at least 12 weeks.
In June 1942, the legislation was amended so that children living in state-run institutions were eligible for child endowment payments. The amendments also made it possible for child endowment grants to be made for Aboriginal children living on missions. The child endowment payments made to institutions and missions could be applied to the 'general maintenance, training and advancement of the children living there'.
Explaining the amendments to the legislation, an article in The Worker stated:
'Generally speaking it was thought desirable to provide some additional funds to supplement the efforts of the State and provide additional food, clothing, and comforts for those children who have not the priceless blessing of fond parents and congenial home surroundings.'
Child endowment payments became an important source of funding for children's Homes and orphanages.
In an oral history interview in 2011, former resident of the Gill Memorial Home for Boys in Goulburn, Jim Luthy, described how the Salvation Army benefited from child endowment payments made for the boys living in the institution. He describes how the system affected the education of boys from Gill:
'When we went to school we weren't placed in the top classes … Kids from Gill would come and go … The school didn't see terribly much sense in keeping children in the top classes - they knew they wouldn't be there after Year 10 anyway. Because after year 10, you didn't get any funding. Child endowment finished, and then they threw you out.'
Commonwealth of Australia child endowment order
