Proposed Childcare Payments For Grandparents

The Turnbull Government is reportedly considering a plan to give grandparents financial incentives for looking after the children of working parents.

With childcare costing so much, many Australian families rely on grandparents, who in some cases cut their working hours or retire early to make themselves available to help.

Government Negotiations

Queensland Senator Glenn Lazarus told the Sunday Mail that he had put the proposal forward to Treasurer Scott Morrison, who had pledged to consider it. According to the newspaper, Tasmanian independent Jacqui Lambie has also raised the proposal of childcare payments to grandchildren with Mr Morrison.

The government needs crossbench support to pass its $3.5 billion Jobs for Families childcare package, announced in the 2015 budget. The package includes childcare deductions for families with incomes between $65,000 and $170,000 per year. Mr Morrison is continuing to negotiate with the crossbench on the package and though he has refused to reveal his discussions during the negotiations, is desperate to secure passage of the family package which is due to start in 2017.

Senator Lazarus said families in rural areas found it especially difficult to access childcare services and increasingly relied on grandparents for support. He also wants the paid parental leave to be more flexible.

“Many families are now leaning on grandparents to assist in the care of children while the parents go off to work because the cost of childcare in Queensland has increased so dramatically over the past few years,” he said.

Some countries pay grandparents to look after children the same way nannies are paid or allow the transfer of paid parental leave entitlements to grandparents so new parents can return to work earlier. National Seniors chief executive Michael O’Neill, who recently spoke with the Prime Minister about pension and superannuation issues, also supports the plan.

“Internationally, governments are already recognising and rewarding grandparents for the vital role they play in the modern economy,” he said.

Sacrifices Made By Grandparents

Grandparents are sacrificing work, income, travel and recreation and retirement to care for their grandchildren so the parents can go to work.

Three-quarters of grandparents believe regular childcare is a normal part of their role, according to a University of NSW study of how childcare affects grandparents’ work and retirement plans. Most enjoy it, saying it improves their family relationships. However, there is a tipping point. Grandparents who provide 13 hours or more of care a week feel pressure to do so, are less likely to enjoy it, and are more likely to find it difficult to juggle work and care. One in five grandparents would like to provide less care than they do.

UNSW social policy researcher Myra Hamilton said grandparents were making enormous personal sacrifices to provide childcare. “Our expectations of grandparents are extremely high,” said Dr Hamilton, who presented her findings at the Australian Social Policy Conference. “We’re asking them to juggle their childcare responsibilities and their labour market responsibilities.”

Grandparents are the most popular form of childcare in Australia, with 837,000 children looked after by their grandparents each week in 2014, according to the Bureau of Statistics. Most grandparents provide childcare so their daughters or daughters-in-law can return to work after having a family, but only 3 percent are paid.

“Grandparent childcare is absolutely essential for the functioning of the family unit,” Dr Hamilton said. In addition to providing regular care, grandparents also act as families’ backup plan, stepping in during school holidays, when someone is sick or in times of crisis.

Dr Hamilton’s research found 70 percent of grandparents had changed the days they worked, and 55 percent had cut back the hours they worked so they could provide childcare. Childcare responsibilities take precedence over work for half of all grandparents.

Mortgage pressures and the high cost of day care are prompting parents to call on grandparents for childcare. Yet a third of grandparents take a financial hit when they look after their grandchildren. Grandparents also incur extra expenses, such as paying for food, equipment, outings and transport. Some had dropped plans to move house, or given up certain activities, so they could look after their relatives.

“Many had long-term visions for their retirement, and when they got there they had to really adjust their expectations and plans so they could provide the care their children needed them to,” Dr Hamilton said.

Many grandparents said they felt tired or exhausted at the end of a day of childcare.

National Seniors chief executive Michael O’Neill said today’s grandparents had a lot of demands placed on them. “It’s important their children are aware they can be overloaded, and respect the rights of grandparents to fulfill their own life,” he said. “They have to find the right balance.”

Mr O’Neill said that although grandparents were not motivated by money to provide childcare, their offspring needed to be aware they were often on a fixed income (either a pension or superannuation stream).  “The cost of providing care is significant and does impact on people,” he said.

Dr Hamilton called on policy makers to start recognising the childcare contribution of grandparents. One-quarter of grandparents said their childcare responsibilities had affected the timing of their retirement. More than half of grandparents believe the government should compensate them for the care they provide.

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