A family caregiver is any partner, relative, or friend who provides care to someone else in the household. This could be an adult child helping her aging mother, a parent taking care of a teen with developmental disabilities, or even just a neighbour helping with household chores after surgery. Did you know these family caregivers play a huge role in household debt and financial wellness?
In Australia, there are a reported 3 million family caregivers. This is approximately 11% of all Aussies, and this number continues to rise as the population of aging parents grows. While family caregivers typically don’t have formal medical or management training, they perform an essential service in today’s households. That’s why it’s essential that family caregivers play an active role in preventing and managing debt.
With families across the globe struggling to keep up with rising inflation and costs, what can caregivers do to stay proactive? As all caregivers know, this is a demanding role that takes a toll on your physical, mental, and emotional health. Keep reading to learn how to lessen the impact of caregiving on your finances long term.
What Is the Financial Impact of Caregiving?
First, what are the costs associated with caregiving? While taking care of a loved one is a selfless act of kindness, it comes at a toll. In the USA, AARP reports that 8 in 10 caregiving adults face high out-of-pocket costs and greater economic strain.
How does caregiving impact the entire family’s finances?
- Medical expenses: The cost of ongoing medical expenses and treatment can’t be understated. Whether this includes outpatient care, nursing facilities, or additional medical aids, these costs can be unexpected.
- Reduced income: Another way caregiving impacts finances is through reduced income. With individuals dedicating more time to caring for their loved ones, they no longer have that same time or energy to devote to a career.
- Additional expenses: New expenses might be added to your monthly budget, like a private nurse, complex transportation needs, and so on.
As you can see, it’s never been more important to manage the financial impact of caregiving.
Financial Assistance for Family Caregivers
Luckily, you’re not alone. In Australia, there are payments available to help if you provide care for a loved one. While the type of assistance available depends on your unique situation, explore these options:
- Carer Payment: If you’re providing what’s known as ‘constant care’ to someone with a medical condition or disability, you can receive regular payments.
- Carer Allowance: Alternatively, if you care for someone who needs regular support, you can apply for the Carer Allowance for a monthly paycheque.
- Child Disability Assistance Payment: This is an annual payment for those who get the Carer Allowance and care for a child with a disability or severe medical condition.
- My Aged Care: If you’re caring for an elderly loved one, they might qualify for assistance for free or at a reduced cost through My Aged Care.
- National Disability Insurance Scheme: If your loved one has a disability, they might qualify for support through NDIS.
It’s important to take full advantage of tax benefits, caregiver payments, and programs designed for families in this situation. Remember, you don’t have to face these challenges alone.
How to Soften the Financial Blow of Caregiving
While these steps will depend on your situation, there are many things you can do to soften the overall blow of financial caregiving. Aside from financial benefits through the government, charities, and nonprofit groups, try these ideas below.
Reduce your housing costs
One of the most expensive aspects of caregiving is housing costs. Trying to afford multiple residential payments at one can be overwhelming — or downright disastrous. Instead, move your loved one into your own space if possible.
Ask for help
Have you ever heard the phrase ‘it takes a village’? While usually applied to raising a child, the same is true for family caregiving. Ask for friends and family to chip in when they can, spreading the caregiving responsibilities more evenly amongst your group.
Have difficult conversions
Perhaps the most important way to prevent and manage debt as a family caregiver is to be proactive with difficult conversations. Talk to your parents and aging loved ones about their long-term care plans. What have they saved? What’s important to them as they age? How have they taken steps to secure their finances, and what role can you play to help them in their goals?
Manage Your Financial Wellness as a Family Caregiver
To recap, family caregivers selflessly help others before themselves. While this is admirable work, they need to also take steps to protect their own financial futures. This might mean taking advantage of government programs, asking for help, or planning in advance.
If you’re concerned about your financial role as a family caregiver, you don’t have to walk this path alone. Contact a member of the Debt Busters team for personalized support you can trust.