A total of 3,732 recipients of Assistance for Isolated Children (AIC) allowances during 1979 and 1980 received questionnaires and parents of 313 families were interviewed to determine who benefitted from the AIC Scheme, what use was made of the AIC allowance, what effect did the AIC Scheme appear to have had, and what anomalies existed in relation to participants and benefits under the scheme. "Rural dwellers" were families in Western Australia and Queensland while metropolitan Perth/Sydney respondants represented families with "handicapped" children. Queensland AIC recipients were younger, more mobile, and more isolated than their Western Australian counterparts. Such variations emphasize the difficulties of mounting a national scheme which has uniform benefits and yet achieves its basic equalisation of opportunity intentions. Costs are high for those children who must live away from home for educational purposes, and the AIC Scheme has deteriorated in its capacity to assist with meeting those costs. Ultimately a separate scheme of assistance should be created for children with disabilities, but in the interim the existing categories should be provided for in the AIC Scheme at the revised levels of benefits recommended for the geographically isolated. Seventeen other recommendations and five appendixes conclude the document. (BRR)