Sunday 16 December 2001

Media Statement

$13.7m Package Rectifies Long Term Caregiver Underpayments

A $13.7m funding package for caregivers and foster parents has been announced today to rectify long term underpayments to families and organisations looking after children on behalf of the state.

Social Services and Employment Minister Steve Maharey said that during the development of Child, Youth and Family's new care strategy the department identified that some caregivers have been underpaid. Around 4000 individual caregivers working directly with Child, Youth and Family may be affected by the issue along with some caregivers working with other non-governmental organisations around the country.

Steve Maharey said the government acted quickly once the underpayments were identified, providing $11.5 million for the reimbursement of caregivers for historic underpayments made since 1995 this financial year, and $2.2 million annually on an ongoing basis to make sure they are paid the right rate.

"Caregivers provide an incredibly important service to the community and it is essential that we reimburse them as quickly as possible.

"I am deeply concerned about this situation that has been going on for some years, but the government's speedy funding injection shows that we are absolutely determined to put things right.

"At this stage it is not clear how much each individual caregiver will be reimbursed. Child, Youth and Family is currently undertaking a major exercise to liase directly with all the caregivers and caregiver organisations on its database to sort out the level of money owed for past services.

"The funding package agreed to by the Cabinet also means that all caregivers will receive the proper rates for current services in the future," Steve Maharey said.

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What's it all about?
For a number of years some caregivers and caregiver organisations have not received their full 'board payments' from Child, Youth and Family.

Caregivers - who are often called foster parents - are people who look after at-risk children on behalf of Child, Youth and Family. In return for providing this important service, they are paid a board rate payment for each child placed with them. The Chief Executive, as required under legislation, sets the board payment rate. Some caregivers are paid directly by Child, Youth and Family, while others are paid by caregiver organisations contracted by the Department.

The shortfall meant that over the six years around a third of the individual caregivers and caregiver organisations working with Child, Youth and Family were paid less than they were entitled to receive. The Department is now working to identify all caregivers who are eligible for a reimbursement and to establish exactly how much they are owed. Once that is done Child, Youth and Family will start reimbursing those who have been identified.

How was the shortfall discovered and what did Child, Youth and Family do about it?
The issue came to light during the Department's work towards achieving more effective care arrangements and Child, Youth and Family immediately sought to resolve the issue. To ensure that reimbursement could occur, the Government has made available $11.5 million this financial year. A further $2.2 million a year will also be provided on an o-going basis to ensure caregivers are paid the appropriate board rate in future.

Child, Youth and Family has also established systems for rigorously checking board payments to make sure caregivers are paid the correct amount in future.

How many people are affected?
Up to 4000 individual caregivers who work directly with Child, Youth and Family may be eligible for reimbursement. As for the number of caregivers working with other organisations, this figure will become clear over the next few months as we work with those organisations.

How much are they owed?
Every case will be unique and the amount owed to any individual caregiver will be based on the length of placement, the numbers and ages of children, and how much less than the minimum they received. This will become clearer over the next few months.

What is Child, Youth and Family doing about it?
The Department is committed to working with caregivers and caregiver organisations to ensure everyone who is eligible receives the money they are entitled to. This includes:

· talking directly to caregiver organisations and individuals · writing to all caregiver organisations and individuals currently listed on their database · setting up an 0800 number (0800 652 222) so people can talk with Child, Youth and Family staff about the issue · publishing information on the Child, Youth and Family web site at www.cyf.govt.nz

When will the reimbursements start?
Reimbursements will start as soon as Child, Youth and Family has established which caregivers are eligible for reimbursement, and how much they should be paid. This may involve asking caregivers and organisations to provide additional information, such as evidence of payments they have already received.

If people they they are eligible Child, Youth and Family will be contacting everyone they believe to be eligible in the New Year. If caregivers would like to discuss this further before then, they can call a helpline the Department has established on 0800 652 222 any time between 8.00 am and 8.00 pm Monday to Friday. This line will be closed on 25 and 26 December and 1 and 2 January.

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