Research Update: Show Me the Money? Cash-for-Care Benefits to Support Aging at Home in Canada

October 4, 2021

A review by Shawna Ladouceur

The ongoing pandemic has brought to the fore the abysmal state of institutional long-term care (LTC) in Canada. As evidenced by the devastation, the existing system will not suffice and will certainly not hold against the advancing wave of aging Canadians. While a complete overhaul of institutional care is necessary, increasing support for both formal homecare and informal caregiving could facilitate the preference for aging-in-place at home. At present, however, with limited access to a fragmented and often confusing home care system, insufficient alternatives can lead to inappropriate institutionalization. The report Assessing Cash-for-Care Benefits to Support Aging at Home in Canada, based on a study conducted by the Institute for Public Policy as a part of their Faces of Aging research program, examines popular cash-for-care benefit programs in Germany and the Netherlands as a possible solution for expanding care options to better support aging at home in Canada.

While several Canadian provinces have self-managed home care programs, most restrict choice by precluding informal caregiving arrangements. This negates important advantages of cash-for-care benefit programs like those currently operating in both Germany and the Netherlands. Cash benefits can increase autonomy by allowing financial compensation to informal caregivers, decreasing cost by substituting for institutional care, and redistributing the burden on informal caregivers by affording the means to engage supplemental care. Though an appealing option with demonstrable successes, a deeper examination also reveals shortcomings to consider.

Lessons from both Germany and the Netherlands must be contemplated if a Canadian cash-for-care program is meant to alleviate cost of the more expensive formal and institutional systems. Flexibility of programs in both Germany and the Netherlands have resulted in higher uptake and hence greater public spending as a result of payment to informal caregivers, such as family members, for the same previously uncompensated work. Since this mounting financial cost has not significantly increased quality or provision of care, both countries have instituted more restrictive measures, including significantly lower payment amounts offered for informal care than formal care.

At the same time, establishing a Canadian cash-benefits policy would require acknowledgement of persistent societal norms regarding gender and caregiving, which continue to disadvantage women. Unpaid informal caregiving responsibilities exhibit a detrimental effect on work hours and earning capacity. Cash-benefit considerations must include financial support such as vacation time and pension contributions to properly alleviate the long-term, and often life-long consequences that still disproportionately affect female caregivers.

The German program has given rise to a large, unregulated, and untrained “grey market”—with families using cash benefits to hire migrant workers to provide 24-hour care that would not otherwise be possible or affordable. Ungoverned by social or labour regulations, studies have revealed exploitative practices and intolerable working conditions (p. 17). In the Netherlands, on the other hand, program constraints and well-funded formal home care services paid for with universal, mandatory LTC insurance plans have instead led to a highly regulated care market. Canada’s own Live-In Caregiver Program (LCP) would likely become more popular if cash benefits were introduced. Already having required changes to combat similar issues, the LCP program would necessitate further restructuring to protect vulnerable workers.

With a rising reliance on informal care, quality is at issue. Monitoring is difficult and enforcing standards, disciplining, or terminating informal caregivers—especially relatives—is nearly impossible. Instead, to prevent the potential for senior abuse and ensure quality and safety, cash benefits must be tied to a minimum level of training, with clear delineation of tasks appropriate to informal caregivers or to care professionals.

With an estimated 120% increase of older adults requiring LTC supports by 2050 (p. 7), in addition to an immediate overhaul of the current system, capacity building strategies to enable older adults to remain in the home must be urgently pursued. While some success has been recognized with cash-for-care benefit programs in Germany and the Netherlands, Canada can learn from both. The failure of either program to reduce costs, alongside difficulties ensuring quality of care and struggles to overcome long-term consequences for women and exploitation of grey market caregivers, demonstrate the need for a strong, formal caregiving system and proper supports for informal caregivers. Especially when considering a Canadian version of a cash-for-benefits program.

Publication Source:

Flood, C. M., DeJean, D., Frisina Doetter, L., Quesnel-Vallée, A., & Schut, E. (2021). Assessing

cash-for-care benefits to support aging at home in Canada, (No. 83). Institute for Research on Public Policy.

About the volunteer:

Shawna Ladouceur is a Registered Nurse who sees the impacts of the social determinants of health in ways that demand action. She has extensive experience working directly with vulnerable populations in the inner city. Her personal interests include skiing, hiking, biking, running, reading, and travelling

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