Financial support to grandparent carers

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Financial support to grandparent carers

Posted 24/03/2014 by Luke Buckmaster

The Senate Community Affairs References Committee is currently inquiring into the needs of grandparents who take primary responsibility for raising their grandchildren when parents are unable or unwilling to do so. An important issue raised by many grandparents in this situation is the stark difference between levels of financial support available to those whose caring role is formal and those caring under informal arrangements. There are also substantial differences between jurisdictions.

Grandparents as carers

According to Australian Bureau of Statistics data, in 2009-10, there were 16,000 grandparent families in which the grandparents were guardians or main carers of resident children aged 0 to 17 years, a number which has decreased since 2003 when there were 23,000 grandparent families.

Grandparents assume fulltime parental care of their grandchildren for a range of (often interrelated) reasons, including mental illness and/or drug addiction of the biological parent(s), child abuse or neglect and family violence. This is part of an international trend towards fulltime parental care of children by biological relatives (kin).

Kinship care can be either formal or informal. Formal arrangements include those where the care of the child is being managed by a State or Territory, welfare authority or with a family law parenting order in place. Informal arrangements are those where family members have come to a private agreement about who cares for the child. In 2012, 47% of children in Australia who were living in formal out of home care were in relative/kinship care arrangements.

Financial assistance to grandparent carers

The type and extent of assistance available to grandparent-headed families can depend on a range of factors including type of care arrangement (informal or formal), characteristics of the placement and family income. It includes both financial and non-financial assistance. Financial support may be accessed from the Australian Government and State and Territory Governments.

Australian Government assistance

Australian Government payments are not dependent on the legal status of the carer: eligibility is based on ongoing day to day care and responsibility for the child. The care may be a formal or informal arrangement.

As such, there is no difference between Australian Government financial assistance available to grandparent carers based on whether the arrangement is formal/informal or based on jurisdiction.

Types of Australian Government financial support available to grandparent carers (such as Family Tax Benefit) can be found at the Department of Human Services website.

State and Territory Government financial assistance

In contrast, State and Territory payments to out of home carers vary considerably within and between jurisdictions. As outlined in the Department of Social Services (DSS) commissioned report, Financial and non-financial support to formal and informal out of home carers:

  • all jurisdictions graduate payments according to the age and needs of the child and have a base rate of allowances, which is supplemented for those who have additional needs
  • types of expenses that are covered by the base allowance and those expenses that are eligible for additional financial support vary between jurisdictions and all jurisdictions support formal carers with extraordinary expenses and
  • most States and Territories do not provide financial support to informal carers.

The table below is based on the most recent available information from State and Territory governments. It shows some significant differences between rates of payment to formal carers across the jurisdictions. For example, the rate available to those caring for children with the highest needs in the highest age band in South Australia is nearly three times that for the similar category in Queensland.

In relation to informal care, it shows that New South Wales is the only jurisdiction in which informal carers receive support (Supported Care Allowance) at equivalent rates of payment to formal carers.

State and Territory carer payments (per fortnight)


Lowest age band/needs

(formal care)

Highest age band/needs

(formal care)

Payments to informal carers







(March 2013)



Eligible carers may receive equivalent rates of payment to formal carers


(July 2013)





(January 2014)





(October 2013)





(July 2011)



Some receive Relatives Care Allowance of $1, 696 per child per year (plus contingencies). However, new applications ceased in 2011







(July 2013)



Grandcarers Support Scheme (GSS) entitles eligible grandparent carers to annual payment of $400 for every first child aged less than 16 years, and $250 for each additional child. Ineligible informal carer receive no state allowances

It is also worth noting that in most cases informal carers are also ineligible for State and Territory government services provided to formal carers.

These gaps in support available to formal and informal carers are particularly striking given that, as the DSS report notes, ‘the day-to-day responsibilities for care, the characteristics of children in care, and the need for services, supervision and information are identical for foster and informal carers’.


  • 25/03/2014 12:35 PM
    Martin Butterfield said:

    Is it safe to assume that these benefits are all means tested?

  • 31/03/2014 12:10 PM
    Luke Buckmaster said:

    Hi Martin. My understanding is that they are not. This is most likely because they are regarded as assistance (or reimbursement) for the extra costs associated with looking after children in their care, rather than income. See the explanation of this on page 12 of the report, 'Financial and non-financial support to formal and informal out of home carers' (linked in the post).

  • 29/04/2015 1:53 PM
    Cassie Forrest said:

    I am a working grandparent carer. I pay the full going rate of child care fees; $380 per fortnight for before and after school care. Free child care is only available for pensioner grandparent carers. If I didn't work, I would get free child care. I wouldn't need to send my little girl to Childcare if I wasn't working!!! Would it really break the government's budget to give working grandparent carers the same subsidies as their retired counterparts? Remember, too, that grandparent carers don't get the foster care allowance.

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