Chapter 7: Relationship to Other Payments
The Taskforce considered the relationship of Carer Payment (child) to other income support payments and government financial assistance, including the possible need for short-term financial assistance in some circumstances.
Understanding the payment system
Carer Payment (child) and other social security payments
Carer Payment (child) is one element in Australia’s social security structure for providing for the needs of people who, as a result of their circumstances, require assistance in the form of income support.
In particular, Carer Payment (child) recognises that caring for a child or children with severe disability or medical conditions can be a full-time job that effectively prevents the carer from participating in the workforce but that is of great social and economic value to the community generally
The relationship of Carer Payment (child) to other income support payments—and in particular to those payments that impose obligations about workforce participation—must be recognised in any review of eligibility for Carer Payment (child).
More generally, the Taskforce was conscious of the fact that any social security system is a response to the needs and expectations of the society in which it operates. As such, and within the capacity of that society to meet those needs and expectations, it changes as they change. The Taskforce also recognised, however, that the system is part of the agenda of government for economic and social management. For those reasons, the elements of the structure need to be seen in the context of the likely developments in social welfare policy.
While the Taskforce recognised that those considerations were relevant to any long-term view about the place of Carer Payment (child) within the social security structure, it concluded that it had neither the time nor the remit to pursue them. However, to the best of its understanding, the findings and recommendations of the review are not inconsistent with current thinking about these issues.
Carer Allowance
It was evident from the submission process that carers in receipt of carer payments are not clear about which payment they are receiving. Many of those who provided submissions stated that they were receiving Carer Payment (child) when it was clear from the context that they were receiving Carer Allowance (child), or vice versa.
This confusion may have been compounded by the change in the payment titles and structures over time (see Appendix E for a history of carer payments). It may also be affected by the different forms and verification processes required for each payment.
The Taskforce had some difficulty in understanding why eligibility for Carer Payment does not automatically entitle the carer to Carer Allowance. It accepts that there are significantly more people receiving Carer Allowance than Carer Payment, possibly because Carer Allowance is not means tested and because there are different assessment methods for the two payments.For some reason, which the Taskforce was not able to establish to its satisfaction, not all Carer Payment recipients currently receive Carer Allowance. For example, it is estimated that around 90 per cent of those on Carer Payment (child) also receive Carer Allowance (child). Possible explanations of the discrepancy include the number of multiple carers—that is, where two carers are providing care for a child with very severe disability and are eligible for only one payment—or the fact that not all those on Carer Payment may be aware that they are also eligible for Carer Allowance.
The Taskforce questions how the considerable additional costs involved—for Centrelink in administering the applications, for medical and other health professionals in filling out yet another form verifying the condition, and for carers in attending and paying for these appointments when a form for Carer Payment has already been provided—can be justified. Carer Allowance is currently paid at the rate of $98.50 per fortnight, and the Taskforce was surprised that the Carer Allowance assessment process appeared to be more complex and time-consuming than the Carer Payment process. The Taskforce questions whether these inconsistent arrangements may be due to an accident of history rather than intended design features of the system.
Recommendation 25
The Taskforce recommends that Carer Payment (child) recipients be automatically eligible for Carer Allowance (child).
Carer Adjustment Payment
As mentioned in Chapter 4, the Carer Adjustment Payment (CAP) is a new interim ex gratia payment available to assist families to adjust following a catastrophic event where a child up to six years of age is diagnosed with a severe illness or medical condition, or a major disability due to injury from an accident. At the time of writing, the CAP was due to cease on 30 June 2008.
The CAP is a one-off payment of up to $10,000, is not means tested and is available only to those who are not in receipt of an income support payment, such as Carer Payment (child). While the payment aims to assist families to adjust to their exceptional circumstances, there are no conditions on how the payment is to be used by successful applicants.
The Taskforce notes that many of the issues raised by those who have applied for CAP assistance—such as workforce participation and the financial impact of caring for children with severe disability or medical conditions—will be addressed in part by the recommendations of this review. In terms of ability to participate in the workforce, the Taskforce was of the view that there is little distinction in practice between those who are providing ongoing long-term care and those who are providing care due to a catastrophic event. CAP applicants often cited the additional medical and other costs associated with caring for their children, and the Taskforce has recommended that the government review the adequacy of financial supports for carers (see Recommendations 3, 7, 8, 9 and 10).
Parenting Payment and Newstart Allowance
The fact that Carer Payment (child) is paid because it is accepted that the carer is unable to engage in employment invites comparison with Parenting Payment. If parent carers are seeking income support assistance and are not eligible for Carer Payment (child), they are most likely to apply for Newstart Allowance or Parenting Payment. Both of these payments, however, may involve varying degrees of a mutual obligation to actively look for work, accept suitable work offers and undertake extra activities, such as training, to help with finding work.
The recent Welfare to Work initiatives introduced new arrangements for those in receipt of Parenting Payment (Single) and Parenting Payment (Partnered). At the time of the introduction of the Welfare to Work reforms, more than 600,000 people were in receipt of Parenting Payment or approximately 5.7 per cent of working-age Australians. Prior to Welfare to Work, arrangements for Parenting Payment meant that principal carer parents of school-aged children had virtually no requirement to look for work or participate in the labour force. Some participation requirements were in place only for parents whose youngest child was aged between 13 and 15 years.
Principal carers who were on Parenting Payment on 30 June 2006 are able to remain on this payment until their youngest child turns 16, subject to their continuing to meet the payment’s eligibility requirements. These parents are required to look for part-time work of at least 15 hours per week as part of their participation requirements from 1 July 2007 or when their youngest child turns seven, whichever is later.
Parents who claimed Parenting Payment (Partnered) after 1 July 2006 will move on to Newstart Allowance and be required to look for part-time work of at least 15 hours per week once their youngest child turns six.
Single parents applying for income support since 1 July 2006 are able to claim Parenting Payment (Single) only if their youngest child is under eight years of age. Once the child turns eight, they will need to apply for another payment, usually Newstart Allowance. These new claimants will need to look for part-time work of at least 15 hours per week as part of meeting their participation requirements, once their youngest child turns six.
This means single parents with young children have participation requirements when the youngest child turns six, but do not have to move off Parenting Payment (Single) and onto another payment (usually Newstart Allowance) until the youngest child is eight. Newstart Allowance may be available to those who are aged 21 or over, are under Age Pension age, are unemployed and prepared to enter into an activity agreement, and satisfy the participation requirements (in addition to meeting residency and means test requirements).
Participation requirements
Participation requirements for principal carer parents include the requirement to look for part-time work, attend all job interviews, take up suitable offers of paid employment, participate in training courses or programs and never leave a job, training course or program without a good reason. The activity agreement spells out the specific activities the person will undertake to meet these requirements.
Principal carer parents may be able to gain an exemption from their requirements if they are caring for at least one dependent child with a physical, intellectual or psychiatric disability or illness and the care needs of the child or children are such that the principal carer parent does not have the capacity to undertake 15 hours of paid part-time work per week.
Exemptions can be granted for up to 12 months, and parents can apply for one or more further periods of exemption, each of which cannot exceed 12 months. Parents need to provide Centrelink with a letter from their medical practitioner and from the school stating that the parent cannot participate in paid work because the parent needs to be constantly on hand or on call while the child is at school.
Data provided to the Taskforce indicate that around 7.2 per cent of principal carer parents receive Carer Allowance. Further, exemptions to care for a child with severe disability or medical conditions represent around 8.7 per cent of all exemptions received by principal carers, and most parents with this type of exemption are also receiving Carer Allowance (78 per cent). This indicates that for principal carer parents with a participation requirement there is a strong correlation between receipt of Carer Allowance and exemptions to care for a child with a disability and/or medical condition.
If the carer parent is in receipt of Carer Allowance (child), this is accepted as verification that the child has a disability; however, carers are still required to obtain verification from a treating health professional that the care load is such that it prevents the carer from undertaking the activities in their activity agreement.
If the child is of school age, a statement is also required from the child’s school that the principal carer needs to be always available to care for the child with disability. The Taskforce notes that this type of statement is not required for determining eligibility for Carer Payment (child).
Issues
Given that Carer Payment (child) and Parenting Payment both provide for the full-time care needs of a child, an issue for the Taskforce is whether there is a need for Carer Payment (child) before the child reaches the age of seven. Conversely it may be questioned why a carer who would qualify for Carer Payment (child) should not receive that payment rather than Parenting Payment which for some reason is paid at a lower rate, although in other respects, other than the age limitation, it is similar.
A related issue raised with the Taskforce is whether there is, or should be, a minimum age for a care receiver below which Carer Payment (child) should not be paid. This was suggested because of a perception that the care needs of an infant with a disability or medical condition may be more difficult to distinguish from the care needs of an infant of a comparable age.
This issue goes to the very heart of the rationale for Carer Payment (child), which is not paid because of the disability or medical condition but rather because of the care needs resulting from the disability or condition that prevent the carer from engaging in substantial workforce participation. It would seem, in the case of a very young child, that it may be difficult to establish that the requisite care needs resulted from a disability or medical condition, but the Taskforce sees no reason to arbitrarily preclude the possibility.
Carer Payment (child) is paid at a higher rate than Parenting Payment (Partnered) and Newstart Allowance and also has more generous means test limits. While the Taskforce was not asked to review the amounts paid, the evidence available from the consultation process regarding the adequacy of Carer Payment (child) would certainly not support any reduction.
There are less tangible but nonetheless important reasons why many carers feel strongly that they should receive Carer Payment (child). Those reasons include recognition of the worth of their caring role and its importance to the community and the desire to establish the special care needs of the child at an early age to insure against the perceived risks in transitioning to adult entitlements. This is contrasted with the difficulties in establishing an entitlement to Carer Payment (child), which result in applicants giving up on the application process even though they might, had they persevered, have qualified. In the view of the Taskforce, such a result for such a reason is simply unacceptable and demands changes along the lines recommended in this report.
The Taskforce also notes the additional difficulties created for parents of children with severe disability on Parenting Payment or Newstart Allowance through the participation requirements. Although the rules may be applied consistently, exemptions are applied on a case-by-base basis to ensure that there is appropriate flexibility to deal with individual circumstances. It is not clear whether this system is supporting carers in their caring role, and in the Taskforce’s view this issue could be examined further to establish the effects of participation requirements on parents of children with severe disability or medical conditions who are not eligible for Carer Payment (child) but who are receiving Carer Allowance (child).
Recommendation 26
The Taskforce recommends that participation requirements for parent carers in receipt of Carer Allowance and a relevant income support payment be reviewed to ensure that verification requirements have greater regard to the individual circumstances of carers.
Transitions
A major issue identified in the submissions was the transition to Carer Payment (adult) and Carer Allowance (adult) once the care receiver turns 16 years of age, which involves a fresh application and in turn requires all the information already submitted to be provided yet again. While the Taskforce acknowledges that there may be a need for some re-assessment of eligibility, it questions whether a fresh application is the appropriate process.
For many care receivers neither their conditions nor their care needs are likely to change. Where it is medically assessed that improvement may take place to an extent that would impact on eligibility, this presumably can be identified and is unlikely to be a consequence of having a 16th birthday. Obviously there will be a need from time to time to ensure that the medical condition of the care receiver has not changed significantly, the carer is still providing the appropriate level of care, and the income and assets tests are still met, but those aspects too would not seem to be contingent on the child reaching the age of 16.
‘The [transition] from under 16 to over 16 is terrible. Centrelink must think that the illness mysteriously disappears because they don’t give the right information or paper[work] to be filled out. … I went a month without any income for my youngest. How am I supposed to support my son during this transition period?’
The significant change is presumably the entitlement of the 16-year-old care receiver to Disability Support Pension. Given the stringent tests of the disability or severe medical condition of the care receiver to qualify the carer for Carer Payment (child), it must be questioned whether the payment of Carer Payment (adult) on transition could not be automatic with a review, or at least simplified, unless there are reasonable grounds for believing that there may be a relevant change of circumstances.
The Taskforce is aware that the current assessment process for Carer Payment (child) is very different from the assessment used for Carer Payment (adult) and Carer Allowance (adult), which involves the use of the Adult Disability Assessment Tool (see Chapter 6 for additional information). The use of a different assessment tool is presumably the basis for the requirement for applicants to be reassessed. The Taskforce also acknowledges that if a care receiver applies for Disability Support Pension at age 16, he or she will be receiving a payment in his or her own right, possibly for the first time, and may therefore have to complete the relevant application forms.
In terms of transitions from Carer Payment (child) to Carer Payment (adult), it was noted above that in May 2007 around 250 people were in receipt of Carer Payment (child) for a child aged 15 and around 880 people were receiving Carer Payment (adult) for an adult child aged 16, which rose to over 1,000 for care receivers aged 17 years. While these numbers appear to indicate that the Carer Payment (child) eligibility criteria are far more stringent than those that apply to Carer Payment (adult), on closer inspection they may also indicate that some Carer Payment (child) recipients are having difficulty with the transition.
An analysis was done of the payments that were granted to a group of care receivers immediately after their 16th birthday. Of the 652 care receivers analysed, 477 (73 per cent) were granted Disability Support Pension, 92 (14 per cent) went onto Youth Allowance Student and 15 (2 per cent) onto Youth Allowance Jobseeker, no payment was applied for or granted in 46 cases (7 per cent) and the remaining 4 per cent went onto Abstudy, Mobility Allowance or Special Benefit.
Immediately prior to these care receivers’ 16th birthdays, their carers had been in receipt of payments as shown in Table 3.
| Payment type | Number | Percentage |
|---|---|---|
| Parenting Payment (Single) | 271 | 41.5 |
| Carer Payment (for child—who turned 16) | 140 | 21.5 |
| No payment | 104 | 16 |
| Parenting Payment (Partnered) | 86 | 13 |
| Disability Support Pension | 11 | 1.7 |
| Newstart Allowance | 28 | 4.3 |
| Wife Pension | 5 | 0.8 |
| Partner Allowance | 1 | 0.2 |
| Widows Allowance | 2 | 0.4 |
| Carer Payment (for additional child, not 16-year-old) | 4 | 0.6 |
| Total | 652 | 100 |
Nearly 60 per cent of carers were in receipt of Parenting Payment or Newstart Allowance, with only 21.5 per cent of carers in receipt of Carer Payment (child) before their children turned 16 years of age. This indicates that, even though the children’s disabilities were severe enough to qualify them for Disability Support Pension when they turned 16, the stringent nature of Carer Payment (child) had prevented their carers from accessing the payment.
Recommendation 27
The Taskforce recommends that the transition from Carer Payment (child) to Carer Payment
(adult) be streamlined.