Reforming financial assistance and support for caregivers

In 2019, Oranga Tamariki carried out a review into the financial assistance provided to caregivers to make sure it meets the needs of children and caregivers.

This has resulted in some immediate additional support, and we are continuing to do more work in this area through a programme of work to simplify and unify the payment system for all caregiver payments.

The 2019 review of financial assistance

What the review was about

We took a thorough look at the financial assistance caregivers receive to make sure it met the needs of children and their caregivers.

The review considered the Foster Care Allowance (including the Higher Foster Care Allowance), Orphan’s Benefit, Unsupported Child’s Benefit and their associated payments. It considered the level and consistency of these payments and the appropriateness of the eligibility criteria.

Read Minister Martin’s press release announcement

Who we consulted

We wanted to hear what caregivers had to say on issues that affect them and the children in their care, including the financial support they receive. We completed a series of hui and fono with caregivers across the country, and heard from many caregivers through our online questionnaire.

We also consulted with care-experienced young people as well as Oranga Tamariki staff, NGOs and iwi/Māori and Pacific organisations.

What caregivers told us

The engagement with caregivers found that although most caregivers receive a lot of enjoyment from the role, they would like to feel more valued. Most caregivers said the payments they received did not adequately cover the costs of having a child in their care, and for many, becoming a caregiver had a negative financial impact on their lives.

We also heard about the unique challenges faced by Māori and Pacific caregivers, and the need for caregivers to access a wide range of support for their wellbeing, along with appropriate training to help them meet the needs of the children they care for.

The Summary of Engagement Findings provides further detail of what was heard during the consultation period.

The review findings

Following the consultation period, the voices of caregivers, care-experienced young people, and other stakeholders guided the development of policy proposals for the Minister for Children.

These proposals responded to identified issues with the caregiver payment system. Issues included inconsistencies between payments, which led to caregivers receiving different levels of support, and the complex nature of the system, which is difficult for caregivers to navigate. 

In December 2019, the Minister for Children took a Cabinet paper and the Summary of Engagement Findings to Cabinet to be considered.

The Government response to the review

The Government has agreed to address the findings of the review, including:

  • making some initial changes to address some of the immediate issues
  • a multi-year programme of work to simplify and unify the payment system for all caregiver payments, and ensure that it is equitable
  • an overarching framework to set the direction for the development of an improved system, through a set of objectives and principles.

The Cabinet paper and associated minute provides the full scope of the work programmes.

Changes made in 2020 following the review

In 2020, we made some initial changes to address immediate issues faced by caregivers. These included introducing several initiatives for caregivers delivered through the COVID-19 Response and Recovery Fund.

Read the announcement

Two of the four initiatives were implemented in 2020, including:

  • an increase to the base rate of the Orphan’s Benefit, Unsupported Child’s Benefit and Foster Care Allowance by $25 per week per child
  • enabling Foster Care Allowance caregivers to continue to receive financial assistance for 20 days while the child they care for is in respite care.

Changes in 2021

In 2021, amendments to the Social Security Act 2018 were made to implement the remaining two initiatives funded through the COVID-19 Response and Recovery Fund:

  • enabling short-term caregivers to access the Orphan’s Benefit or Unsupported Child’s Benefit (from 1 July 2021)
  • establishing Holiday and Birthday Allowances for those receiving the Orphan’s Benefit and Unsupported Child’s Benefit (the Holiday Allowance is due to begin in December 2021, for Christmas in 2021 and the Birthday Allowance is due to begin for birthdays from January 2022).

Read the announcement

The Government also invested $57 million to ensure caregivers supporting children inside and outside the State care system receive the same level of support, and to better enable caregivers to meet the costs of caring for children.

Caregivers receiving the Foster Care Allowance currently receive two standard payments that caregivers receiving the Orphan’s Benefit and Unsupported Child’s Benefit do not. These include:

  • a nappy payment to help cover the costs of nappies for younger children
  • a standard payment for small items that the child or young person needs (for example, prescription costs).

Budget 2021 extends the nappy and standard payments to caregivers receiving the Orphan’s Benefit and Unsupported Child’s Benefit through an increase in the payments made to caregivers each week. The investment will also provide a small increase to the nappy payment for all caregivers, to better reflect the cost of disposable nappies. 

These changes will be implemented in April 2022.

The multi-year work programme

In March 2021, the Minister for Children has provided an update to Cabinet on our longer-term policy work to reform the system of financial assistance and support for caregivers, which aims to simplify and unify the system for all caregiver payments.

This work is intended to transform the caregiver financial assistance system so that it supports tamariki to thrive under the protection of their family, whānau, hapū or iwi, and provides more support to caregivers outside of the State care system.

We will be engaging with our strategic partners, iwi and Māori organisations, NGOs, and caregivers to guide the development of policy proposals to reform the system of financial assistance and support for caregivers.

The Minister for Children is due to report back to Cabinet by the end of 2021 seeking agreement on a new model for the system.

The Cabinet paper and minute provide the full details of the update.

Published: June 14, 2019