Carers face a tougher future under Budget changes

Carers face a tougher future under Budget changes

Posted May 13, 2014

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Downgrading the indexation of the Carer Payment from Average Male Weekly Earnings to CPI will significantly eat into the real value of income support received by carers of people with a significant disability, chronic condition, mental illness, terminal illness, or the frail aged.

Over 205,000 carers who meet the means test and hours of caring eligibility requirements for the Carer Payment will be affected.

For those caring for someone on a Disability Support Pension – which is also now to be CPI indexed – this will be a double whammy!

“The CPI is not a cost-of-living index but a price index designed to measure price movements in relation to a specific basket of goods and services,” said Ara Cresswell, CEO of Carers Australia.

“The inadequacy of CPI as a tool for the indexation of income support was noted by the Harmer Pension Review which pointed out that the single Age Pension – indexed at Average Male Weekly Earnings - had risen by 20% in real terms over the previous decade compared to less than 0.5% for Newstart which is linked to CPI.

“How many Australians do you think would agree that their real cost of living had increased by only 0.5% over 10 years?” said Ms Cresswell.

“Many carers are already struggling financially, with almost two thirds of Australia’s 770,000 primary carers in the lowest two household income quintiles. Now, in addition to a reduction in the real value of their income support, carers will also face additional medical and pharmaceutical costs due to changes in co-payments.”

Carers Australia welcomes the Government’s commitment to introduce a $3 million Young Carer Bursary Programme over three years, which is designed to assist young carers to continue their studies by relieving the financial pressure on them to undertake part-time work in addition to their education and caring responsibilities.

“However, we have real concerns that the new measures being imposed on young job seekers will have a particularly discriminatory impact on young carers,” said Ms Cresswell.

“There will now be a new six month waiting period imposed before young people are able to access the Newstart Allowance. The Government has announced that this waiting period will be reduced for those who have past employment. However, a large number of young carers who have had a significant caring role and who consequently have not been able to participate in the workforce will be disadvantaged if they are not considered to be the ‘principal’ carer.

“The Government has stated that the age of entitlement is over and that the time for everyone to contribute is now. But by reducing the real value of the Carer Payment and penalising many young people who have taken on a caring role, the government is failing to recognise that caring is contributing.”

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