Massive boost sought for Centrelink allowance

Carers claim they are falling behind financially and are demanding a dramatic boost to the Carer Allowance.

The Carer Allowance has not been increased in real terms in nearly a decade and Carers Australia says it is affecting carers’ ability to cope. It also has long-term implications for the economy.

The Carer Allowance is a fortnightly income supplement and is set at $144.80.

It is a recognition of the care provided at home and can be paid in addition to the Carer Payment or another pension or benefit or if you do not receive any other benefits.

However, it is not indexed in the same way as the Age Pension. It is indexed only once a year on 1 January, whereas the Age Pension is indexed twice a year in March and September.

When the Carer Allowance was introduced in 1999, it was set at 25 per cent of what a couple on an Age Pension would receive, but according to Carers Australia that figure has fallen to 10 per cent.

Carers Australia claims that the allowance would need to increase by 150 per cent to match that original rate.

Carers SA chief executive David Militz told the ABC that carers saved the federal government more than $70 billion a year.

“Everyone at some point in their life will be a carer and it could happen really suddenly. That’s why this is a really important issue,” he says.

“For those carers who have the really significant caring roles that have to stop work, that have no level of income apart from the carer payment, this is where the rubber hits the road.”

False economy

Carers Australia 2022 Caring Costs Us report claims the government’s increasing reliance on ‘informal’ care was a false economy in the long term.

The report explores the economic impact on income and savings for informal carers and found that on average on the 2021 subsidy level, a primary carer will lose $392,500 in life-time earnings and $175,000 in superannuation to age 67.

As a result, people who earned less while caring had less in retirement and thus increased their reliance on the Age Pension. Carers Australia estimates that will cost the government $20,400 per age pensioner, per year.

It also claims when the rewards for caring are reduced, fewer prospective carers will be willing to take on care duties, funnelling more care recipients into expensive formal care.

Carers Australia has suggested two scenarios to improve the Carer Allowance:

  • Increase the Carer Allowance by 150 per cent for those who receive the Carer Allowance but not the Carer Payment, to return it to the historical measure of a 25 per cent supplement to a couple’s Age Pension.

This would offset on average 9.6 per cent of the loss in lifetime income to age 67 that a primary carer experiences and would cost the Australian government $1.9 billion in the first year.

  • Increase the Carer Allowance by 475 per cent for those who are in receipt of both the Carer Payment and the Carer Allowance, to return it to one-third of the average basic care subsidy for residential aged care, acknowledging the need for high-intensity care.

This would offset 31 per cent of the loss in lifetime income to age 67 faced by primary carers and would cost the Australian government $5.6 billion in the first year.

Carers Australia says that the savings in keeping people out of formal care while adding to carers’ income and thus avoiding reliance on the Age Pension would more than make up for the considerable initial costs.

Are you eligible?

As with any subsidy, the government doesn’t want to just hand out money and eligibility is complicated. You and the person you care for must both be eligible for the allowance.

The person you care for must be over 16 (there are different rules for under-16s), be likely to have the illness or disability for at least 12 months and be receiving care from someone in their home, at the carer’s home or in hospital and score high enough on the Adult Disability Assessment Determination (ADAT) tests.

The ADAT involves two questionnaires to measure the amount of help the care receiver needs to undertake basic activities such as remaining mobile, communication, hygiene and eating. The carer must complete one questionnaire and the other must be completed by a health professional.

The ADAT score can also be used to qualify for the Carer’s Payment.

To be eligible for the allowance, carers do not have to pass the assets test, but they will have to pass an income test. You and your partner’s combined adjustable tax income must be under $250,000 a year. 

Carers must also be an Australian citizen, resident, permanent visa holder or a Special Category visa holder. You and the person you care for must both be living in Australia. In most cases you will need to live with the person you are caring for. If you don’t live with them, you will need to be provide at least 20 hours of care.

Do you qualify for the Carer Allowance? Have you taken a dip in income to look after a loved one? Why not share your story in the comments below?

Also read: Centrelink Q&A: ‘Can I apply for the Carer Allowance?’

Jan Fisher
Jan Fisherhttp://www.yourlifechoices.com.au/author/JanFisher
Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.

4 COMMENTS

  1. Over the decades no government has faced the reality of the personal sacrifices and price we pay as carers head on – the actual human cost – but they’re happy to have us quietly working away in the background for next to nothing, saving them billions of dollars in unpaid care whilst we suffer physically, mentally, emotionally and financially. Carers are an inconvenient truth to governments; among the most disadvantaged and vulnerable living way below the poverty line!

    If you haven’t already, please sign, share and sponsor our petition “Time to Recognise and Care for Unpaid Carers!” which calls on the Prime Minister and the federal government to justly and morally recognise and care for carers, especially those only in receipt of a Carer Allowance who need immediate, realistic and proper financial recognition for their unrequited efforts in underpinning Australia’s aged care, health and disability sectors – saving the government and the Australian taxpayer more 77.9 billion dollars a year!

    https://www.change.org/CarersAustraliaPetition

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