Aboriginal and Torres Strait Islander children are eight times more likely to be receiving child protection services than non-Indigenous kids, and more than 10 times more likely to be placed in out-of-home care, a report has revealed.

It also says more Australian children are being found to be at risk, in a reversal of a downward trend.

Where a claim of abuse or neglect was made to child protection services, 8% were investigated, finalised and resulted in the children ended up going through the final “intervention of last resort” stage of out-of-home care. The rate of children in out-of-home care at 30 June 2013 had risen to 7.8 per 1,000 children, from 6.7 in 2009, although the report speculates that could be cumulative.

The report, released by the Australian Institute of Health and Welfare (AIHW) on Friday, reveals Aboriginal and Torres Strait Islander children are much more likely to be receiving child protection services (150.9 per 1,000 children compared with 18.5 for non-Indigenous children).

The rate of Indigenous children removed from their home is 10.6 times the rate of non-Indigenous children nationally, and higher in every jurisdiction. Across Australia, 68% of children placed in care are placed with relatives or kin, other Indigenous caregivers or in Indigenous residential care, in line with the Aboriginal Child Placement Principle.

The overrepresentation of Indigenous children in the child protection system is “complicated”, says the report. “The legacy of past policies of forced removal; intergenerational effects of previous separations from family and culture; lower socioeconomic status; and perceptions arising from cultural differences in child-rearing practices, are all underlying causes for their over-representation in the child welfare system,” it reads.

Recent changes to the way Indigenous identification data is recorded and gathered also affect analysis.

In 2012-13 there were 135,000 children receiving child protection services. More than half of all the children who received protective services were subject to an investigation only – the next step after an allegation is reported.

However, the nature of the data, while wider ranging than previous years, didn’t indicate whether the investigations are continuing on to a form of protective service, or not being followed through on.

"In an ideal world we’d be able to do an analysis with this data set and see what happened to these children after they were investigated,” AIHW spokeswoman Dr Pamela Kinnear told Guardian Australia.

“We do know of children who have finalised investigations … Of the 85,000 children who had a finalised investigation, about half of them went on to [a] protection order or out-of-home care. Others were referred out to some other support service outside the statutory child protection system – they didn’t formally go on to be part of the state system.”

In a dramatic reversal of trend, there was a 29% increase over the past two years in children who were subjects of substantiations – that is, there was found to be “reasonable cause” to believe a child had been, was or is likely to be abused, neglected, or otherwise harmed.

Most children (42%) who were the subjects of substantiations were from the areas of lowest socioeconomic status.

As is the case with many abuse statistics, the report could not conclude what this rise was due to, suggesting the reasons for the rise could include an increase in instances, an increase in reporting of instances, or legislative changes.

Emotional abuse, followed by neglect, were the two most common forms nationally of abuse found in substantiated cases. Also among substantiated cases, 20% related to physical abuse and 13% sexual abuse. The statistics varied widely between states and territories.

The annual report on child protection in Australia has for the first time included data on children receiving child protection services in different jurisdictions rather than aggregated by states into their own data sets. It also reveals numerous other indicators and aggregates of abuse and identification, including socioeconomic status, comparable across states and territories.

The AIHW said this was a “major step toward improved and expanded national reporting for child protection”.