Carers are likely to be financially less well off than those who do not have to care for a dependent family member. There is usually a loss of earning capacity. Dependent persons are unlikely to be in paid employment, and the carer may have to reduce working hours or give up a job altogether. If the carer and the dependent person live in the same household this may mean that there is a double loss of income. Dependency can entail other costs as well, such as house adaptations, higher costs for heating, dietary costs, costs of assistive devices, equipment, or special clothing or shoes.
In the countries studied, different forms of financial compensation were found. These will be described under four headings:
Income replacement or substitution payments. Compensation for extra costs incurred by care. Other financial arrangements.Income replacement or substitution payments Under this heading are three different approaches:
income support; compensation for loss of income; and payment for work performed.Income support
This means that carers who have no income – or only limited income because of their care activities – receive an allowance. Examples include the Invalid Care Allowance and the Carer Premium in the United Kingdom and the Carer’s Allowance in Ireland. In the case of income support, allowances are income-dependent. If a certain income level is exceeded, the allowance is forfeited.
In the Irish case, not only is the carer’s own income taken into account, but the partner’s as well. A married woman, caring for her mother, may lose her entitlement to the allowance if her husband’s income is raised and exceeds the stated limit. Irish carers were quite angry about this. Both in Ireland and in the UK, pension rights may be accumulated while receiving the allowance. Compensation for loss of income
This kind of allowance was found only in Denmark, where a parent who cares for a seriously ill or disabled child receives an allowance equivalent to the lost income, plus any additional expenses. The minimum duration is one year. There are two additional allowances in Denmark, the amount of which is based on the forfeited income. They are an allowance for parents of a sick child under 14 years, and an allowance for persons caring for a terminally ill relative. These benefits are linked to the sickness benefit and have a time limit. Payment for work performed
Examples of this approach were found in Denmark, Finland, Germany, and the Netherlands. Since the study, this possibility has also been introduced in the United Kingdom. In Denmark and Finland, the municipality can enter into an agreement with the carer that he or she will perform a certain amount of work and will be paid by the municipality.
In Germany, the long-term care insurance may either provide services or a cash payment. The cash payment equals roughly half the amount that would be paid if one opted for services.
There are three levels of dependency and corresponding amounts of money. The monthly payments in 1998 were:
Services Cash
Level 1 € 383.40 € 204.51 Level 2 € 920.32 € 409.00 Level 3 € 1431.62 € 664.68
In extreme cases the maximum for services can be raised to € 1917.34 per month. The cash payments are intended to serve as payment for the carer. Additional benefits accrue to carers who spend at least 14 hours a week caring and work less than 30 hours a week in paid employment. These include:
contributions towards the old age pension; accident insurance; and an allowance when caring has come to an end.Carers who have worked twelve months can obtain substitute care for a period of four weeks in order to take a vacation. There are also some provisions for temporary substitute care in cases of crisis. Obviously, the payments to carers of heavily dependent persons are far from enough to cover all costs or to be considered as a real wage for the work they do.
In the Netherlands, persons in need of care can apply for cash instead of services. If they choose the cash option they can hire and fire their own helpers. They must make formal contracts with them, for which there are strict rules. Contracts must meet the requirements of the labour market (e.g. wages cannot be lower than the minimum wage, paid holidays must be provided, etc.).
Gradually the scheme is being improved in the sense that fringe benefits, such as those provided to workers in the formal services, can also be given to carers. Recipients of the care allowance can make a contract with spouses or other members of the family.
This scheme is appreciated by those who opt for it because it allows for more flexible care arrangements. Moreover, the relatives (if they are hired) are happy with the payment.
The payment of carers is a touchy issue. This emerged most clearly in Ireland. The fact that the carer’s allowance is a social assistance payment – solely intended to assure that the carer has a minimum income and not at all related to the efforts made by the carer – is considered most unfair.
While conducting the interviews in Ireland, this researcher discussed with quite a few persons, among them carers and former carers, the question of whether they would prefer wages, comparable to those in the care sector. This idea was totally rejected. The moral obligation of caring was felt very strongly and it seemed inconceivable that caring for relatives could be considered as a paid job.
At the same time, carers asked very urgently for more recognition and for a review of the carer’s allowance. In a way, it seems illogical on the one hand to claim a better payment – related to the efforts of the carer – and on the other hand to oppose the idea of a waged job for persons who care for a family member.
Other sources also report that carers like to receive recognition and appreciate something (not necessarily money) in return for their services (e.g. Luijkx, 2001). Care allowance schemes, in which the care recipient has the possibility to choose either services or cash with which the carer can be paid, seems a reasonable solution.
Compensation for extra costs incurred by care
In Belgium and Denmark, the study found this kind of compensation for carers.
Other financial arrangements
Quite a few other ways in which the financial situation of the carer can be improved were found by the study. Belgium, Ireland, and the Netherlands have certain tax relief measures. These are not described in great detail, because they presuppose some knowledge of the tax system.
Other provisions encountered include:
increased children’s allowance for a disabled child; supplementary payment on social security benefit; accommodation adaptation or contribution towards this; reduction on television and radio licences; co-payment ceilings; VAT exemption on car purchase; and reduced or free public transportation fares.As a rule, these provisions are aimed at very specific target groups.
Career break option
Employed carers may want to temporarily reduce working hours or take leave. In Belgium, employees have the option of taking leave of absence on five occasions, up to a maximum of a year, during their entire career. During this time, they receive a monthly sum of € 270. This scheme was introduced in 1985 as a job-creation instrument.
The career break was introduced in the Netherlands in 1998. Employees have the option of a full-time or part-time leave for a maximum duration of 18 months. In the case of full-time leave, a maximum allowance of € 434 may be paid. An unemployed person must be taken on by the employer in the place of a carer who leaves his or her job. This scheme has not proved very successful as it is too complicated for employers.
Recently, the possibility of a ten-day paid leave was introduced as care leave. This can be used when someone must care for a sick member of the household or for sick parents. Discussion concerning long-term care leave is under way. So far, it seems as though politicians are not ready to embrace this idea. Eurolink Age (1999) conducted a project on carers in paid employment and demonstrated that there are corporations which have carer-friendly policies. Career breaks are among the options.