Caring Costs Us: The economic impact on lifetime income and retirement savings of informal carers
Carers Australia and the National Carer Network – our members, the peak carer organisations in each state and territory – commissioned the Caring Costs Us: The economic impact on lifetime income and retirement savings of informal carers report (Caring Costs Us Report). Based on economic modelling and microsimulation, the Caring Costs Us Report was prepared by Evaluate which is an independent private economic consulting practice, with a particular focus on social policy.
The Caring Costs Us Report acknowledges but does not deal with the human complexity of decisions to care. The focus is on highlighting the economic impact of unpaid care, specifically, lost income during working life and the longer-term reduction in accruing superannuation which affects retirement savings. In economic terms this is called the ‘opportunity cost of caring’.
On completion of the economic modelling, two fiscal policy options are presented and costed:
Government pays Superannuation Guarantee Contribution on the Carer Payment – paying into the superannuation accounts of primary carers based on the amount of Carer Payment they receive
This follows prior work undertaken for Carers Australia looking at the replacement value of informal care in Australia. The Value of Informal Care in 2020 Report found it would have cost $77.9 billion in 2020 alone, and before COVID-19 impacts, to replace the care provided by carers with formal paid services, such as those accessed via My Aged Care or the National Disability Insurance Scheme (NDIS).
It is important to note that the findings and options presented in the Caring Costs Us Report are only one component to address the barriers and long-term impacts on carers’ financial and economic security. Carers also need to be supported and enabled to participate in employment, education and training without affecting those who are not eligible for carer subsidies, or who choose to or cannot work whilst they undertake their caring role.
Carers Australia has prepared a summary of the Caring Costs Us Report to highlight what we believe are the key findings:
Australian carers lose a considerable amount in lifetime earnings and superannuation
The age a person becomes a carer is significant on the financial impact of caring
Income support through Carer Payment is less than 30% of the average weekly earnings
The value of the Carer Allowance has significantly decreased since its introduction
No real improvement in government expenditure on informal care
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Why we did the Caring Costs Us Report
The right to participate in economic, social and community life is recognised under the Commonwealth Carer Recognition Act 2010 where Principle 9 of the Statement for Australia’s Carers says carers “should be supported to achieve greater economic wellbeing and sustainability and, where appropriate, should have opportunities to participate in employment and education.”
- Carers in Australia experience considerably poorer employment outcomes, with a 52.2% employment to population ratio compared with 75.9% for people without caring responsibilities (Source).
- On average around 28% of primary carers spend more than 60 hours per week caring for the main recipient of care (Source)
- A total of nearly 2.2 billion hours of care was estimated to have been provided in 2020 by carers (Source)
- More than 60% of Australia’s 235,000 young carers aged 12-25 years have not studied beyond high school, and on average are expected to receive income support for 43 years over their lifetime (Source).
- At December 2021 there were 301,197 people receiving the Carer Payment and 622,860 people receiving the Carer Allowance (Source)
- At March 2021 69% of Carer Payment recipients had received an income support payment for 5 years or more, including 45% for 10 or more years (Source).
Thirteen years on from the 2009 Who Cares…?: Report on the inquiry into Better Support for Carers by the Parliament of Australia House of Representatives Committee, carers are still not recognised or embedded within reform. Carers Australia want a coherent and flexible approach to address the barriers and long-term financial and economic impacts on the one in 11 Australians who are carers as they maintain and thrive in their caring roles.
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