Refugee-background youth in the Australian context have long been confronted with a series of challenges surrounding their living and educational conditions. However, limited research has been conducted to examine the underlying factors of such problems. This paper critically explores possible factors that contribute to or intensify the challenges that refugee-background children and youth face in Australia by scrutinising related legal documents and education policies (e.g. inclusive and language transition policies). It is argued that the living and learning crisis among refugee-background youth in Australia is a result of: (a) restrictive refugee law; (b) incomplete education policy; and (c) deep-rooted political and historical views on refugees.