The true cost of Informal Care

By Prudence Granger | 6 April 2023 

When I stepped into my role as an informal carer for my father, there was no doubt that I would continue to work. My job was flexible, I was sharing the load with my mum and it was “manageable” while working. In the beginning this was true, his needs weren’t overly high, he only needed support here and there, and he could be left alone while I was out of the house for a couple of hours to teach yoga. However, this soon changed. 

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My Dad has Early-onset Alzheimer’s and the nature of his condition is to become progressively worse. As his illness progressed, his needs grew. He could no longer be left at home without supervision, which meant how we managed his care changed. Although I still wanted to work to some degree, as that was a part of my identity and individuality, there were conversations in our household about the different government subsidy options and whether it would be a viable option for me to perhaps go on a carers pension or allowance. However, the reality was that these allowances were too low to live off, and the moment you subsidised them with other work, the amount received reduced – it became a balancing act to find a way to make enough money and continue to offer care. 

We then realised it made more sense to increase the amount of support we had that was funded via the NDIS instead and through this process I found myself working as a Support Worker. The rate of pay as a Support Worker is generous, and I was able to do support work and earn money, while my dad was with other support workers. This was a great way to work our schedules, so that Dad wasn’t without care and I was earning an income that was sustainable. However, this system always felt a little backwards to me, as formal care was valued significantly higher from a financial perspective than informal care. 

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I recently learned that the government saves AU$77.9 billion a year by relying on informal care and to be honest, it completely enraged me. My thoughts regarding the backwards nature of the financial support system for carers were validated.  

This information came to light through the report ‘Caring Costs Us’, prepared by Evaluate and presented by Alastair Furnival at the May 2022 CKE Research Incubator Event. His presentation and his report took a deep dive into the long-term financial burden informal care causes for carers and the fact that the current government subsidies are leaving carers behind. Even though carers’ need for financial support is due to making a sacrifice to care for an individual who cannot live without support, they’re treated as less than other groups who receive government support. This further enraged me and quickly became a very common topic of conversation with anyone I interacted with. 

That figure, AU$77.9 billion saved by the government in relying on informal care, is so high because essentially, they know that some people have no choice but to accept this role. I feel it is a manipulative system, that the government relies on people’s good nature to fill the care gap. I believe this good nature should be rewarded, for example, if a carer was paid just one third of a support worker’s hourly rate, it would be a sustainable income. In my time as a Support Worker, I have been astonished to find many people working in this system are carers themselves and have found themselves in this role for the same reasons as me. Specifically, they have firsthand experience caring for those with disability or impairment and it was a structured way to make an income and support their loved one. 

The reality is though, this causes burnout, you spend half your day caring for an individual outside of your home and then come home to more care. This means the burden is high, the fatigue is high, and perhaps you show up less to your loved one as you have given everything you’ve got in your day of work. Instead, support workers should facilitate respite for the carer, not just space for the carer to try and earn as much money as possible while they’re out of the house, because the reality is that managing paid and unpaid care is literally managing two full-time roles and it is unsustainable. 

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According to the ‘Caring Costs Us’ study, the biggest financial loss to carers over time is that of their Superannuation. Depending on the duration of their care period, what they lose is insurmountable and truly affects their financial freedom in the future. Superannuation is a system that is designed to grow over time, this support system then takes the burden off the government in the future, however, if a carer has lost their Super contributions, there is no opportunity for growth and they will continue the cycle of support, leaning into a pension once they retire, which frankly, is also not a liveable income. 

On average the lifetime Super loss of a carer is roughly AU$392,500, however, it can be as high as AU$940,000. Without ongoing Super contributions and the time for these contributions to grow, carers are left with very little financial freedom during the time of their care and beyond. 

Where to from here? 

This is a topic which has many layers and pitfalls, due to a system that is not setup to support or help carers. It is a system that is built on gatekeeping and makes it as difficult as possible for those who deserve financial support to receive that support. Once the financial support is received, after all the effort it takes to be approved, it is not enough to provide a sustainable income and is difficult to keep receiving the payment. I know firsthand that it is not survivable, especially when you are financially responsible for yourself and your dependants.  

The ‘True Cost’ study provides some suggestions towards financial freedom. The first solution is creating a Super contribution for carers, which would only cost the government AU$711.9 million a year. The second solution is to directly increase the carer allowance by 150% to 475% depending on the carers scheme they are a part of, costing the government a maximum of AU$5.348 billion per annum. These potential solutions create a financial cost to the government that is just a drop in the bucket when compared to the AU$77.9 billion they’re saving yearly due to informal care. 

Frankly, I don’t think this system will change until the sacrifices and value of informal care are recognised. In a lot of communities and structures caring is seen as simply “the right thing to do” and is therefore an invisible burden. Until there is an active conversation about what caring truly means, a carer’s contribution will not be properly funded or supported.