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Caring is physically and emotionally draining, time-consuming and often quite tough on your bank balance.
Almost 2.65 million Australians are currently caring for someone with a disability, a medical condition, mental illness or someone who is frail and elderly.
Many carers are eligible for some form of income support from the Australian Government. For retirees, these payments can be a valuable source of financial help if one of you requires care.
What is a Carer Allowance?
The Carer Allowance is an income supplement for people who provide additional daily care and attention for an adult or child with a disability or medical condition, or an adult who is frail and elderly. This article only deals with the rules for the Carer Allowance where you are caring for a person aged 16 or over.
Who is eligible?
As usual with government benefits, there are strict rules about who is eligible to receive a Carer Allowance. If you are caring for someone aged 16 or over, you must be:
- Caring for someone with a disability or medical condition who needs additional care and attention
- Providing care for the person in either your private home, their private home, or in hospital
- An Australian resident.
In addition, the person you are caring for must be an Australian resident and must have:
- A permanent disability or medical condition or be frail and elderly, or
- A temporary condition for an extended period of at least 12 months, or
- Been diagnosed as being in the final phase of a terminal condition.
To be considered an Australian resident, you must be an Australian citizen, a permanent visa holder, or a protected Special Category visa holder.
Services Australia considers you are living in Australia if this is your usual place of residence and where you make your home. For most newly arrived residents, there is a 52-week waiting period to receive the Carer Allowance, but the waiting period does not apply to the person for whom you are providing care. There is more information about waiting periods on the Services Australia website here.
How much will I get for the Carer Allowance?
The payment rates for the Carer Allowance are reviewed on 1 January each year.
Throughout 2021, the Carer Allowance was $131.90 each fortnight if you were providing care to someone aged 16 or older.
The Carer Allowance is paid in addition to any wages or another income support payments you receive. If you qualify to receive the allowance, your annual income has no impact on how much Carer Allowance you receive each fortnight and the payment will not be added to your taxable income.
You are permitted to claim a Carer Allowance for up to two people aged 16 and over and you will receive a regular payment for each one.
What is the income test for the Carer Allowance?
There is no assets test for the Carer Allowance, but there is an income test. To be eligible, you and your partner’s combined adjusted taxable income (see section below) must be under $250,000 a year.
When you are assessed by Centrelink for the allowance, both members of a couple must provide their adjusted taxable income details for the same financial year. The adjusted taxable income details you provide can be for either of the two financial years preceding the current one. For example, if you are lodging your claim for a Carer Allowance during 2021–22, your details can be for 2019–20 or 2020–21. Your adjusted taxable income includes any deemed income from account-based pensions.
If your adjusted taxable income for the previous year was above the income threshold, you may seek to have an income estimate for the current financial year used instead. An estimate is only acceptable if you can demonstrate a change in your personal circumstances and this is an acceptable reason for using an estimate.
According to Services Australia, acceptable reasons for using an income estimate include:
- Retirement or partial retirement from the workforce, closure of a business or receipt of an inheritance
- Ongoing reduction in your working hours because the person you are caring for requires more care and you are personally providing that care
- Substantial loss of income caused by a catastrophic event or natural disaster (such as fire, flood or cyclone)
- Substantial one-off cost due to disability or medical condition of the person receiving care.
Your obligations if you receive a Carer Allowance
Once you start receiving a payment, you are required to inform Services Australia of any changes that could increase, reduce or stop your payments. You must notify Services Australia within 14 days if you:
- Change or correct your name
- Stop giving care to the person for whom you are caring
- Move house
- Leave Australia
- Start or stop sharing care with someone else
- Become partnered or separated.
You must also provide information if the person receiving care:
- Needs less care
- Goes into respite care or hospital
- Leaves Australia
- Dies
If you fail to inform Services Australia, you will have to pay back any overpayment.
Can I take a break from caring?
The rules permit you to continue receiving the Carer Allowance if someone else provides care while you have a break, or if the person you care for goes into hospital. You are, however, required to inform Services Australia.
You are permitted to have 63 days of respite each calendar year (1 January – 31 December) without your payments being stopped. These days can be for a holiday, or simply a break from caring.
During your break, the person receiving care can be in informal respite care at home or elsewhere, or be informally cared for by a friend, neighbour or family member.
If the person you care for is in hospital, you will still be paid if all of the following apply:
- You keep caring for them while they are there
- They are likely to return to your care when they leave
- You plan to still provide care for them when they leave hospital.
You will continue receiving the Carer Allowance if you leave Australia for a short time, but you must meet the payment rules at all times. If you leave Australia temporarily, you may be paid the Carer Allowance for up to six weeks, depending on whether or not the person receiving care is accompanying you on the trip.
Claiming your Carer Allowance
To claim a Carer Allowance, you need to ensure you are eligible. You can then apply online at the Services Australia website here.
Applying online requires you to have a myGov account and have it linked to Centrelink. For more information, read SuperGuide article What is myGov and how do I use it?
You will also need to prove your identity and provide any necessary supporting documents (such as details of your financial assets, annual statement for your SMSF, and medical reports and certificates for the person receiving care).
Case study – Chris and Susie
Chris and Susie had been married for 50 years and were enjoying a happy retirement when Chris was diagnosed with dementia. Over the next few years, Chris’ physical and mental health were increasingly impacted by his dementia and Susie became his full-time carer.
As Chris’ health declined, he was placed on a waiting list for residential aged care, but additional in-home care services became necessary as he waited for a place to become available. Susie increasingly found these additional in-home care services difficult to pay for from their retirement savings.
Susie applied to Centrelink for a Carers Allowance for the care she was providing to Chris in their home.
Centrelink assessment of Chris and Susie for the Carer Allowance
Chris (age 78) and Susie (age 74) are both Australian residents. When Susie applied for the Carer Allowance:
- Chris’ score on the Adult Disability Assessment Determination 2018 (ADAT) was high enough to qualify for care.
- Chris was assessed as likely to have the illness or disability for at least 12 months.
The following outlines the Centrelink assessment of their financial assets for the Carer Allowance:
Chris and Susie’s financial assets and income
| Financial assets | Annual income from the asset |
|---|---|
| $550,000 – jointly owned home | Nil |
| $6,500 – savings account earning 0% per year | Nil |
| $85,000 – term deposit earning 2% per year | $1,700 |
| $1,458.60* per fortnight maximum Age Pension combined couples rate (with supplements) | $37,923.60 |
| $15,000 – jointly owned car $5,000 – home contents | Nil |
There is no assets test in place for the Carer Allowance, so Chris and Susie’s home, car and home contents were excluded from their assessment by Centrelink.
Chris and Susie’s annual income of $39,623.60 is under the annual threshold of $250,000 for a combined adjusted taxable income.
This means Susie is eligible to receive a regular fortnightly payment of $131.90 as a Carer Allowance for her role as the carer for Chris.
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