Australia: High cost of caring

Of Australia’s 2.8 million carers, 24 per cent are looking after elderly or disabled parents, with many forced to decrease paid working hours due to their caring commitments.¹

Shaun Williams, Aviva’s General Manager Group Business Development, says the need for family care of elderly relatives is on a steep incline and cautions families against expecting the Government to provide this care.

While Public funding for aged and community care for 2002-03 is estimated at $5.5 billion², Australia’s rapidly ageing population is quickly pressuring resources.

Even with the high profile of the aged care crisis, the demands placed on carers of the elderly have largely been ignored. Lack of aged care facilities means almost one in four carers say they have needed to take time off from work because of their caring role.³

"Caring for elderly relatives is a financial drain in more ways than one. It might mean decreasing work hours, and therefore salary for the carer, or moving parents to expensive aged care facilities," says Shaun.

While family care of an elderly parent may be the most financially alternative at the time, it may have long term consequences. A carer who gives up work or reduces hours is also forfeiting their superannuation entitlements and may find themselves under-funded when it comes round to their time for retirement.

The role of caring for a parent is often taken on due to family responsibility. However, the expense of alternative aged care facilities frequently put them well out of reach of many families.

Right now one in twelve people over the age of 70 live in aged care homes. The daily fees for such homes currently range from $26 to $33 – with additional income tested fees.⁴

"For families who haven’t financially prepared for the possibility of a parent needing aged care these costs are extremely prohibitive and may leave little choice except for a family member to take on the caring role," said Shaun.

"Having a dependent parent is a very emotional time but by preparing the family financially for the care of aged parents it ensures their welfare is based on their care needs rather than directed by what the family can afford."

"It’s also important to be informed about the financial position of your ageing parents. Of course sometimes this is a tricky discussion but in the event of elderly parents suffering dementia, or other diseases associated with old age, it is essential someone is fully aware when making financial decisions about their care," says Shaun.

A financial planner can structure a strategy which takes the needs of all family members into account.

-ends-

^{1Australian Bureau of Statistics, Australian Social Trends 2001, Family Services: Caring in the community, Canberra, November 2002.}

²Australian Government, Department of Health and Ageing, Aged Care What does it cost?, Canberra, September 2003.

³Australian Bureau of Statistics, Australian Social Trends 2001, Family Services: Caring in the community, Canberra, November 2002.

⁴Australian Government, Department of Health and Ageing, Aged Care What does it cost?, Canberra, September 2003.

For further information please contact:
Simon Morgan
(03) 9829 8892
0407 966 632

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator Australia Limited and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.

• Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.

• Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$66.08 billion, and more than A$472 billion of assets under management (as at 1 January 2004). The group has more than 59,000 employees and 25 million customers worldwide.

• The information in this document reflects Norwich Union Life Australia Limited's (NULAL) and NULIS Nominees (Australia) Limited's ('NULIS') understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. The securities advice or information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of the advice above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the advice is appropriate in the light of their particular investment needs, objectives and financial circumstances.

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