The Economic Value and Impacts of Family Caregiving In New Zealand
She is older than the typical New Zealand adult—and more likely to be a Pakeha or Maori than to come from any other group—and aging at a faster rate than the population at large. She is also suffering to some degree financially because of what she does, even as her unpaid contributions save the country billions of dollars each year.
And she also is looking pretty tired, as you and I would if we had to put in an additional 30 hours of demanding work every week.
Meet the typical New Zealand family carer, as presented in a new independent report prepared by economics agency Infometrics for national peak body Carers NZ and the NZ Carers Alliance of 45 national not for profits.
The 18 page report, developed with funding assistance from Bupa and the IHC Foundation, offers a demographic snapshot of the typical New Zealand carer.
The report was prepared by Infometrics economist Dave Grimmond, a former Treasury official, and assesses Census information to put an economic measure on the costs and contributions of being a carer.
It shows that caring is associated with a major loss of income and hours of gainful work, in turn indicating a significant risk of economic disadvantage—if not outright poverty—for those providing intensive 24/7 care for ill, elderly, and disabled loved ones.
The report attempts to quantify the specific economic impacts typically borne by the 223,155 New Zealanders reported in the last Census to be looking after a member of their own household who is sick or has a disability. Almost twice that number (430,000+) tell Census-takers they are involved in some kind of family caregiving.
These figures seem to tally with the findings of similar studies of family caring in rich-world countries, such as the one conducted by the OECD in 2011, which found that around one in 10 adults were involved in informal, typically unpaid family care.
The Infometrics report reveals that 672.2 million hours of care are currently provided in New Zealand each year. This means the average caregiver turns in 30 hours a week, or one quarter of their waking time, over and above whatever passes for their own life (in addition to any paid employment).
The benefits to the New Zealand economy from this unpaid work appear to be considerable, but just as apparent are the associated costs.
While the value this effort delivers to New Zealand probably accounts for around 5% of gdp, or NZ$10.8 billion a year, households in this situation earn on average considerably less than those without similar responsibilities.
In 2013, according to Infometrics, households in which there were unpaid carers typically earned 10% less than others. This was despite carers not having any materially different abilities or qualifications than the population at large (indeed, carers appear to be slightly more skilled and schooled than the average Kiwi citizen).
Carers were more likely to be eligible for some form of benefit and to be working part-time rather than full-time. Fewer hours of paid employment, and therefore diminished earning potential, could be an important factor behind carers’ lower incomes.
“There appears to be an income penalty associated with providing unpaid care,” the report says. “Based on information from the Statistics New Zealand Censuses, we calculate that the median income in households where someone is providing unpaid care was $70,445 in 2013.”
If we accept that the figure of 10% accounts for a good portion of most people’s disposable income, this finding suggests that the demands of caring, and the unpredictable nature of the role’s commitments, are potentially troubling for the economy in our aging society, and place additional demands on social support services.
The report does not look at extra health, medical and disability costs borne by caring households, but this must be a growing financial strain as New Zealand, like most countries, shifts long-term support into ‘community-based care’ or ‘natural support’ (i.e. families and whanau) wherever possible.
Further research about the costs of caring (medical visits, treatments, unfunded continence supplies, special housing and transport, aids and equipment, and much more) is warranted to reveal the full picture of the economic effects of caring on households. Carers NZ will commission this work from an independent surveying agency in 2015 to more fully calculate the employment, social, economic, and household impacts of family caregiving.
The Infometrics report also confirms the conventional wisdom of females shouldering much of the care burden in New Zealand.
As with many other OECD countries, carers are twice as likely to be women as men. Putting that figure in a local context, says the Infometrics report, the 63% of carers who are women compares unfavourably with the 52:48 female-male ratio in New Zealand for unpaid activities overall.
No doubt, the new report offers much food for thought and some of our country’s first concrete economic data about family caring.
The most obvious conclusion is that carers themselves require care if they are to continue making their valuable family, social, workplace, and macro-economic contributions. And that the cost of not meeting this challenge is one ultimately borne by every New Zealander, as we can all expect to give or receive family care during our lives.
David Grimmond’s report also sheds light on a truth most of us take for granted: caring has a significant fiscal impact on households supporting someone who has a chronic condition, is elderly, has significant disabilities, an ongoing mental illness, or who has a terminal illness.
The role of women has changed considerably over the last century but the Infometrics report shows their continuing role as the country’s primary carers comes at a cost … one that needs an unflinching look from government and its agencies as medical advances ensure we live at home for longer with escalating long-term health and disability support needs than past generations.