What’s the actual cost to Australian families waiting the median 294 days for already approved Aged Care services? For starters: $200,000.
Here’s how that’s calculated: A family member on Australia’s median wage who leaves full time paid work for 294 days at the age of 45 to care for an ageing parent loses the compounded cost of lost wages and superannuation by age 67 for the median wait period (294 days) – and misses out on just short of $200,000.
That’s a huge dent in superannuation and savings at retirement. For many, especially women, the cost of today’s Aged Care wait time may be the difference between a dignified old age and homelessness.
One approach to these costs is via the work of Claudia Goldin, who was awarded the Nobel Prize for Economics in 2023, “for having advanced our understanding of women’s labour market outcomes”. She showed how even small interruptions in paid work can result in lower lifetime earnings, lower retirement savings, reduced asset accumulation, and a greater poverty risk later in life.
Goldin analysed decades of data and demonstrated how women’s lifetime earnings suffer during periods of caregiving, a term used to differentiate care for ageing parents from childcare. Women suffer from what she called the “temporal flexibility penalty.” That’s the penalty women and others bear when, for whatever reason, often care-related, they cannot work predictable, long and continuous hours.
Taking time off work to care for an ageing parent for 294 days until help arrives is a perfect illustration of Goldin’s work. Waiting for care is depleting the lifetime financial resilience of the families of approximately 200,000 older Australians on the Aged Care waiting list.
For a working Australian of median age, about 45, on the median adult wage, who takes only 2 hours per day, or a day a week, away from paid work to care, the compounded lifetime loss in wages and superannuation will be approximately $39,000. But the lifetime loss at age 67 for those aged 45 who leave work entirely for the duration of their parent’s waiting time will be $197,000.
And that assumes the caregiver will have hopped right back into work, at the same salary level, in their old job or an equivalent. Not likely. We know from the literature and annual surveys conducted in Australia by Carers Australia/University of Canberra and others that unpaid caregiving not only reduces hours worked, it also interrupts careers, forecloses promotion opportunities, and causes immeasurable damage to mental health and physical resilience.
The real total cost of replacing government-supplied support for an ageing parent on the Aged Care waitlist goes beyond salary and superannuation. That’s because there’s more to supporting ageing parents to remain at home safely and in dignity. It’s on average $7-10,000 or more per year on out-of-pocket expenses.
Going further, Princeton Professor Viviana Zelizer showed how caring, framed as love, duty, or family obligation, results in caregivers’ labour being routinely under quantified. She maintains that despite its intimate and moral nature, the cost of caring is an essential component of the broader economy. Without external support (and on a 294-day waitlist) families as units absorb those costs, typically invisible to traditional economists. The substitution of unpaid care for paid care is also easily quantified – and it’s staggering, unaffordable for nearly all of use, and is already having a significant impact on the live and futures of thousands of Australian unpaid family carers.
Never quantified, yet one of the leading and unquantified ‘costs’ that plagues Australian caregivers is the endless administration to obtain, maintain and coordinate care: hours waiting on the phone to speak with numerous agencies; making and remaking appointments; transporting and accompanying parents to those same appointments; and completing endless questionnaires and forms, usually repeating the same information ad infinitum.
The family, led by its “Chief Care Officer” becomes administrator, manager, transport provider, advocate, and insurer of last resort. None of these tasks is quantified or costed.
When systems like Australia’s troubled Aged Care system create delays – 294 days in our system – and services are unavailable, or support rationed, it’s families who fill the gap and pay the immediate costs. But in the long term, it’s also the states and the Government of Australia who pay in other costs: increased health and hospital costs for lack of care, lost productivity, lost tax revenue, and lower Gross Domestic Product.
The actual cost of not caring is a cost we all bear. Addressing the actual cost of not caring goes well beyond the waiting lists. And it’s up to politicians, not a Nobel Prize winner, to address.