Comments by Labor Senators
Assistance, Social Security and Veterans' Affairs Legislation Amendment (2005
Budget and Other Measures) Bill 2006
The changes to Carer Allowance were the focus of the submissions to the
Committee's inquiry, and evidence given to the public hearing on 14 March 2006.
Current Access to Carer
The Committee heard that 95,000 people are currently granted Carer
Allowance each year, comprising 72,000 new Carer Allowance (adult) recipients
and 23,000 new Carer Allowance (child) recipients.
The Department of Families, Community Services and Indigenous Affairs
confirmed that 72 per cent of the 23,000 new recipients of Carer Allowance
(child) receive backdated payments under the current arrangements, which equates
to 16,560 carers being eligible for up to a maximum 52 weeks backdated payment.
The Department also indicated that 36 per cent of the 72,000 new
recipients of Carer Allowance (adult) are backdated under the current
arrangements, which equates to 25,920 carers being eligible for up to a maximum
26 weeks backdated payment.
The Government’s Proposal
Under the proposed changes in the Bill the maximum backdated payment
that the 95,000 new Carer Allowance recipients each year would be eligible for
would be just a maximum 12 week backdated payment.
The Department confirmed that the annual savings generated by this
measure totalled $34.657 million. This
comprised savings of $23.969 million for the child payment and $10.688 million
for the adult payment.
The figures provided by the Department show that the 16,560 people who
currently get Carer Allowance (child) backdated by up to 52 weeks will lose on
average $1,450 each as a result of this measure.
The figures provided by the Department show that the 25,920 people who
currently get Carer Allowance (adult) backdated by up to 26 weeks will lose on
average $410 each as a result of this measure.
By the Department's own evidence a total of 42,480 carers will be
adversely affected by this measure each year.
With backdating restricted to 12 weeks under the Bill, new recipients of
Carer Allowance (child) will lose up to $1,894, while new recipients of Carer
Allowance (adult) will lose up to $663.
Impact on Carers
No evidence was provided by the Department about the impact these cuts
would have carers.
No arguments were advanced as to why carers should be denied the
current rates of backdating in the future.
The Department confirmed that the decision to slash the current
backdated period from 52 weeks and 26 weeks, for child and adult payments
respectively, was simply a political decision taken by the Howard
It was indicated that the measure was to bring the backdating of Carers
Allowance in line with the treatment of other payments.
Witnesses pointed out that while the Government had consulted about
measures in the Budget that were positive for carers, there had been no
consultation about this proposal.
Labor Senators take the view that the proposal to cut Carer Allowance
backdating is simply about savings – savings that the Government wants to
generate at the expense of 95,000 carers each year.
These cuts are particularly severe in the context of the contribution
that carers make to the Australian economy each year.
A recent report by Access Economics, commissioned by Carers Australia,
found that in 2005 about 2.6 million people – 1 in 8 Australians – are
estimated to be providing informal care to a family member or friend.
The report estimated that informal carers provided a total of 1.2
billion hours of care in 2005. If all
hours of informal care were replaced with services purchased from formal care
providers and provided in the home the replacement value would be $30.9
Carers look after their family members and friends day in, day out 365
days a year. We cannot ignore the fact
that providing informal care comes at a cost to carers in terms of their
well-being, quality of life, financial security and opportunity to be in the
The contribution carers make is not only to the people they care for,
but also to the community and to the economy more broadly. The saving of $35 million per year to reduce
the backdating provision to 12 weeks should be considered in light of the fact
that informal carers save the economy $30.9 billion per year.
Labor Senators note that the Chair of the Committee has accepted the
harshness of the Government's plans through his second recommendation, which
would allow greater than 12 weeks worth of backdating in some circumstances.
The Committee also heard evidence from a number of groups that many
people were unaware of their entitlement to the Carer Allowance and therefore
did not apply for it immediately. They
indicated that a further reason for not applying for the allowance was that
parents in particular suffered from denial after the diagnosis of a child with
The submissions by a number of groups also noted that there exists a
widespread belief, particularly amongst General Practitioners, that the carer
must obtain a medical diagnosis of the condition affecting the person they are
caring for before they can apply for Carer Allowance.
Carer representatives also identified that the form that is used to
make application for the Allowance is misleading, leading the medical profession
to indicate a medical diagnosis rather than an assessment of care needs.
The Department indicated that the Government makes no attempt to
proactively identify those people who may be eligible for Carer Allowance to
inform them of their entitlement.
These are important justifications for why Carer Allowance currently
has relatively generous backdating rules.
Implicit in the Government's
costing of this measure is the assumption that large numbers of people will
continue to remain unaware of their entitlement to Carer Allowance and be
denied the backdated payment.
Labor Senators acknowledge that the Chair of the Committee has
attempted to address the lack of awareness of Carer Allowance in his first
recommendation however we also note that the Government has provided no
commitment to implementing such an education campaign.
The harsh cuts in payments to carers as a result of this measure – at
current payment rates up to $1,894 per carer, totalling $35 million a year –
are significant and stand in stark contrast with the Howard Government's policy
of paying up to $3,300 a year to millionaire families in receipt of Family Tax
Benefit Part B.
Labor will be proposing amendments to the Bill to ameliorate the impact
of this measure.
Senator Claire Moore
Senator Helen Polley
Senator Jan McLucas
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