Financial Support for Family Carers
Annex Two: Analysis of Policy Approaches to Family Care-giving
NACEW considered three possible policy approaches to care-giving to assess its position on financial support for informal care giving. They are:
- mandated family responsibility – the family is obliged to offer in-kind or monetary payment for services;
- payments and supports to family caregivers to provide relief, or to help them cope with the short and longer term costs of care-giving; and
- increased formal care so as to allow family members to stop or reduce care (adapted from Kane and Penrod, cited in Guberman,1999:63).
Mandated family responsibility
Some family responsibilities are mandatory; there are legal requirements on parents to provide care for their non-adult children and on spouses to care for each other. NACEW is concerned that interpreting these obligations as a responsibility for extraordinary care places an overly large burden on individuals, mainly women, who are required to care for severely disabled family members. This, in turn, restricts the opportunities for those family carers to have a normal life. There is also evidence that heavy obligations to care trigger breakdowns in care arrangements and in wider family arrangements [1].
Historically, care responsibilities taken on by other family members (such as children caring for parents, and parents caring for adult children) have reflected obligations and expectations more than legal requirements. These obligations are more common in some cultures and families than others, but appear to be on the decline across the population as a whole, and do not sit comfortably with contemporary views on individual rights and independence.
Existing welfare payments broadly reflect an expectation of family responsibility. The Domestic Purposes Benefit (Care of sick and infirm) (DPB (CSI)), is available where the care recipient would otherwise be in hospital, receiving 24/7 care. The DPB is income and asset tested and not available to full-time carers who have other family income from wages, working partners, or National Superannuation. Carers who are married to an invalid receive a benefit due to their partner being eligible, rather than as recompense for the care they provide. This benefit is also abated against other income, such as employment earnings.
The mandated family responsibility approach would have the lowest direct costs to government in terms of providing care, but high indirect costs in terms of the costs for carers and costs due to poor quality care. The costs to carers are documented in research – and include stress, poor physical and mental health, loss of employment, poverty, loss of social connectedness, and negative impacts on leisure and family life. These impacts can flow on to clients; for example a New Zealand study of employees involved in eldercare found that seven in ten carers who spent 20 hours or more providing care had negative feelings about their caring role (Davey and Keeling, 2004).
In its pure form, this model assumes that families will be the best carers for their family members and does not provide any funding for alternative care. Under this model, a choice to have an alternative care arrangement depends on a person’s ability to pay. The model does not come from a carers’ rights perspective; it rather assumes that care is a natural task of families and is arguably somewhat blind to the often negative long-term consequences for the carer, as well as to the quality of care.
Overall, the family responsibility model is archaic in its expectations of most family situations, is not sustainable into the future, and out of step with contemporary views on individual rights as well as government policies promoting economic independence at the individual level. It does not align, for example, with government policy on Choices for Living, Caring and Working aiming to enhance the choices of parents and other carers.
Payments and supports to family caregivers
Recognition of family carers can be provided through tangible contributions to costs, employment-type benefits and payments for tasks. In New Zealand, the non-means-tested subsidies available for family carers to purchase respite care, and the ability to take sick leave to care for family members, are the main examples of such payments and supports. New Zealand’s payments are less generous than those of Australia and Ireland where non-means tested allowances are paid to family carers.
In Sweden, France and Italy, family carers accrue social security entitlements (paid leave, pension etc), and similar legislation is being considered in Germany. Leave and/or flexible work are other provisions that can assist family carers to maintain employment whilst caring [2].
One benefit of paying family carers is that it assists the sustainability of what is often a preferred care arrangement. For example, it can be difficult for lower paid workers to combine caring and employment work. Payments can also be a lever for ensuring family carers undertake specific training (such as learning to lift an adult safely). Contracting arrangements around the care provided can be instituted to set parameters.
Where they are in place, direct payments to family carers tend to be set at a minimal level. This is no doubt linked to budget issues, but also reflects a number of dilemmas around such payments, including:
- paying carers not in employment is inequitable with respect to carers in employment who have similar care responsibilities (akin to the wages for housework dilemma [3])
- cultural factors, as well as physical and emotional needs, impact on the provision of family care, and make it difficult to identify the roles that should be paid for
- carers who can only earn a low wage [4] are likely to face disincentives to take on employment, which will entrench their labour market disadvantage (Lundsgaard, 2005)
- the appropriateness of legitimising some full-time caring roles, for example for young people and people over retirement age
- long-term, full-time caring roles conflict with labour market objectives for women, as well as having health and isolation risks.
Legitimising family carers through paying allowances, providing more “leave”, improving respite arrangements and providing recognitions with arrangements such as Kiwisaver, is not likely to be cheap. Current provisions (primarily the DPB (CSI)) are minimal and do not, for example, include payments to full-time family carers who are receiving National Superannuation or have an earning partner.
The payment to family carers model lends itself to the idea of payments based on the caring “work load”. If this approach is taken, setting the payment within a client-managed (or client-professional – managed) budget would provide for clients to choose between a family carer or a service. It would also provide for the review of arrangements and for purchasing care from a number of sources, so that family carers are not overburdened. In this scenario, the payment would approximate the wage of a care worker, rather than bearing any relationship to opportunity cost of wages foregone.
A further option is to provide paid leave from employment for family caregivers. While paid leave on the birth or adoption of a child is common in developed countries, paid leave to provide family care for disabled or frail people is generally quite limited. The wage-related schemes that do exist are time-limited and only available to people who have employment. Sweden has the most generous provision of a statutory right to take up to 60 days leave at 80% of salary to care for a terminally ill relative. In Ireland and Canada, there are schemes providing 47% of average earnings and 55% of employment income respectively (Lundsgaard, 2005:19).
In summary, there would be considerable and significant additional funding needed to legitimate and properly support family carers. The approach of paying carers directly is less robust than providing for the payment of family carers as part of a client budget, e.g. direct payments, especially through a different funder, cannot ensure family carers are educated for, and supported in their role. The wage paid would relate to the wage of care workers. The long duration of many caring arrangements appear to make wage-related payments, similar to those available in Sweden, unrealistic in the short to medium-term.
Increased formal care
Formal care has had bad press as a consequence of its past emphasis on institutional services. Even today, home-based services, whilst much expanded, offer highly restricted services, and the low wages in the sector are associated with high staff turnover and some difficulties in achieving continuity of services.
Recent literature emphasises the role of formal care as a complement to family care. This can be in a relief capacity, and also in undertaking more complex support tasks, and particularly the tasks that can undermine the personal relationship between a family carer and the client. British studies have found that the provision of complementary services to people needing care is an incentive for individuals to take on care responsibilities because they know they will not be faced with the full responsibility [5].
Formal services may also reduce carer stress, rather than substituting for informal care. Some surveys have found that family carers were not likely to significantly reduce their hours of care when formal care was provided, but instead spend this time on other caring or household tasks. Services, such as day centres, can also provide respite for family carers and enable them to take on some employment.
An emphasis on increasing formal care services is consistent with a move to managed budget holding by clients or their representatives, where budgets reflect the level of need. Such arrangements are not yet widespread in New Zealand. A comprehensive supply of formal home care services is also essential if family carers are to maintain their labour force attachment.
Greater consumer choice via budget arrangements often, but not always, leads to a preference for family care. In Germany, where people with long-term care insurance can choose cash or services, 73% opt for cash, and even at the highest level of support, 64% opt for cash. A frequent motive behind the choice was receiving care from family members (Lundsgaard, 2005:27). Studies in the United States similarly found that consumers valued the freedom to hire a family member, friend or neighbour (Feinberg et al, 2006:15).
Adopting this approach would have significant budget implications due to the relatively small, though growing size of the budget for non-institutional care services. A more comprehensive approach may not be sustainable solely through publicly funded services. Insurance arrangements and part-charges for those with higher levels of wealth may need to be part of the solution.
While care costs are likely to increase under this model, they are likely to be offset by greater productivity through higher employment participation. Lundsgaard (2005) found that countries with extensive provision of formal home care, but only limited support for informal care (such as Scandinavian countries), had higher employment rates for women aged 50-59 than countries such as the United Kingdom, Germany, Austria and Luxembourg, which had limited or average provision of formal home care but extensive financial support for informal care via cash allowances.
Overall, a greater emphasis on formal services that complement family care, and potentially enable the funding of family care within a managed arrangement, is likely to provide for better client care, and improved carer welfare and social inclusion.
Any payment for family carers would then fall out of their explicitly recognised role in providing care, as would other employment like responsibilities (tax) and benefits (Kiwisaver contributions, training, health and safety). Flexible work and leave arrangements for family carers would then be addressed as a separate issue from payment for providing care.
[1] For example there are children in CYFS care due to the breakdown of family care as a consequence of high needs rather than abuse or neglect.
[2] There is evidence to suggest that employees do not generally uplift unpaid leave and that flexible work arrangements and paid provisions are therefore more useful (Fursman, 2007).
[3] In this regard, some European countries provide pension credits or equivalent to all parents, regardless of whether they are in or out of the workforce, as a recognition of the time demands of raising children.
[4] Of all recipients of the DPB (CSI), 58 per cent had been on this benefit for over twelve months, and 38 per cent for two years or more.
[5] Luxton, M, “Families and the Labour Market: Coping Strategies from a Sociological Perspective,” in D. Cheal, F. Woolley and M. Luxton, How Families Cope and Why Policymakers Need to Know(Ottawa: CPRN, 1998), p. 65. cited in Woolley, F, 2001.
