Grandparents stepping up as costs of childcare bite

Australian grandparents are contributing the equivalent of $3.94 billion annually in childcare costs.

Dunja Erem leaves her home at the crack of dawn twice a week to drive over an hour to look after her two-year-old granddaughter, Zoë.

It is a busy routine that is played out across Australia. Almost one in four children receives at least some care from their grandparents and the typical grandparent-carer is clocking about 30 hours a month, a survey suggests.

Dunja's son works full-time and her daughter-in-law works three days a week. Zoë goes to day care on Fridays, while Dunja, 60, cares for her on Wednesdays and Thursdays.

Like most grandparent-carers who responded to the survey, Dunja is happy to do it.

"My payment is spending quality time with Zoë," Dunja says. "I love my granddaughter so much and the time I spend with her is precious. When she runs into my arms that's payment enough."

Dunja's son and daughter-in-law live in a rental apartment in Randwick, in Sydney's eastern suburbs, and are saving to buy a home. Dunja drives from her home in Fairfield West and arrives before Zoë is awake.

Dunja has no other grandchildren, though she has two other children, daughters aged 21 and 23.

Economic value

Australian grandparents are contributing the equivalent of $3.94 billion annually in childcare costs, by minding their grandchildren, according to the survey of 1,000 people conducted by comparison site Mozo.

The typical, or median, amount of childcare provided by grandparents is 30 hours a month, saving their families about $267 a month in childcare fees. But some grandparents are doing much more, pushing up the average to 58 hours a month, equivalent to $517 in childcare costs.

Of the grandparents caring for grandchildren, two out of five are still working, including part time.

One grandmother, who does not want to be identified, said that though the vast majority of her friends are more than happy to look after their grandchildren, sometimes there are grumbles.

"Especially when you get older, a day with kids can be very tiring," she says.

Two in three grandparents told the survey they were happy to care for their grandchild but, of those, 28% said they found it "tiring".

"Sometimes parents can think that mum is enjoying this and they stretch out the day in order to have a drink with someone from work," the anonymous grandmother says. "They can just take advantage of their parents – I've known that to happen."

Stress reduction

Zoë's mother Becky Pesic, 36, is originally from England and without her parents nearby, is very appreciative that her mother-in-law is able to help out.

"It makes our life a lot easier," Becky says. "It's not just the money [child care savings] but the effort that Dunja puts into looking after Zoë. She even cooks dinner while she's there as well.

"That makes a big difference to the stress levels – not having to take Zoë to day care in the morning and having to rush back to collect her."

Becky and her husband are saving for a deposit to buy a house. One of the other benefits of having Dunja looking after Zoë is the couple is able to save more quickly.

"It makes a difference in so many ways – we really appreciate what she does," Becky says.

Mozo director Kirsty Lamont says childcare costs are a "major financial strain for many families" with some childcare centres exceeding $180 per day in metropolitan areas.

"As the cost of living continues to rise and wage growth stagnates, it’s little wonder that many parents are turning to their parents as a childcare solution,” Lamont says.

Payments ending

Mark McCrindle, social researcher and founder of McCrindle Research, says financial factors are not the only reason families turn to grandparents to help look after children.

"We prefer our own families, as it provides that social connection," McCrindle says. "And there is the flexibility that grandparents offer over paid childcare. More parents are in roles where they are on-call and fewer people know exactly when they are going to walk in the door and then there's the traffic, which is unpredictable."

Many childcare centres charge punitive late fees on top of already-high rates.

Previously, grandparents could be paid a small amount for caring for children through the registered carer scheme, but this ended on July 2.

For someone caring for weekly maximum of 50 hours, the payment was only $34.80 for each pre-school child and 85% of that rate for school-aged children.

McCrindle says there's a good argument grandparents should be getting something back from the government.

"They are making a social contribution to our society in helping to care for these children," he says.

"Parents get recognised for their parenting role with some benefits and if grandparents can get something that would be good. It is small amount of money but it sends a message that we value the input of grandparents and we don't just take it for granted."

There was a proposal in 2015 by independent senators Glenn Lazarus and Jacqui Lambie that grandparents be paid a decent rate.

However, the suggestion was rebuffed by Treasurer [now Prime Minister] Scott Morrison who said: "For those who are doing the normal thing like my parents do and a lot of peoples' parents do then, no, the government isn't considering that."

Almost all the grandparent-carers surveyed said they receive no money from the parents. And 3.5% said they felt an "obligation" to look after grandchildren.

McCrindle says he'd hope parents pay, or at least offer to pay, the costs incurred by grandparents, such as petrol or transport fares.

Changes to childcare subsidies

Families have to sign on to the new childcare system, which started on July 2.

The Child Care Subsidy replaces the Child Care Benefit and the Child Care Rebate, and is paid directly to childcare providers to pass on in the form of reduced fees, rather than directly to families.

The new system removes the annual cap that applied to the old Child Care Rebate, but caps the hourly rates it will subsidise.

The subsidy is means-tested and the government says the changes target the most support towards families earning the least and working the most.

The government estimates the change to the new Child Care Subsidy will see more than 230,000 families increase their workforce participation.

It is important to register for the new scheme as current information does not automatically go across to the new scheme.

Families should visit education.gov.au/childcare and make the switch-over where they will have to create a my.gov.au account, link it to Centrelink and complete a Child Care Subsidy assessment.

There is also a calculator on the site where you can work how much you may be entitled to.

 

This article was originally published by The Age on 3 June 2018. It represents the views of the author only and does not necessarily reflect the views of AMP.

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