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Financial upheaval: when grandparents become carers

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No grandparent wants to see their precious grandchildren taken into foster care.

But when adult children can no longer care for their own children because they are incapacitated by substance abuse, mental illness or domestic violence grandparents typically step in to mind them until their parents sort themselves out.

Grandparents often have a close relationship with their grandkids and can provide much needed stability, safety, a regular routine of meals and school attendance and often improve their social skills.

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In some cases grandparents take over the full-time care of their grandchildren. It is a momentous task but it can keep them out of home care and adoption.

There are amazing stories of tragic lives that were turned around because of grandparents.

Grandparents are up for the costs of being a parent all over again: childcare, school fees, after-school care, technology, not to mention housing, food and clothing.

It comes at a time in their lives when they are trying to preserve their savings to fund a long retirement.

Just how grandparents manage the situation depends on their finances and the children's age. Whether they are a self-funded retiree, on the pension or working can make all the difference.

If grandparents are still working it often means that they have to rearrange their lives.

Often they alter the days or shifts they work, reduce their hours or even change jobs. They need flexible arrangements that accommodate school hours and at least 10 weeks a year of holidays.

Not surprisingly, grandparents often bring forward their retirement plans.

It is a tricky time for them, juggling their needs and the needs of often traumatised children who sometimes don't want to leave their parents.

Working out a voluntary solution with adult kids about the care of the grandkids is ideal. It may be preferable to keep the care and protection authorities out of it because once they are involved they have a bureaucratic process that has to be followed.

Grandparents who want to seek custody of their grandchildren aren't necessarily perceived to be the most appropriate carers and they need to work hard to convince the authorities that they are not part of the problem, according to a Legal Aid lawyer.

Keeping an open mind and agreeing to co-operative solutions with parents and grandkids is best.

"Don't be discouraged by government agencies," she says.

"If you lose your children to out-of-home care, it is really hard to get them back, and then you lose your child because what parent comes back from losing their children?"

However, it is not always easy to come to a co-operative solution between the grandparents and their adult children.

Grandparents can seek a consent order for custody of their grandkids but this can be a gruelling and expensive process if your adult children contest it. But without one it can be hard to register kids for daycare or school, because you can't access birth certificates or medical records.

As the main carers, grandparents are entitled to carer's payments from the Department of Human Services.

There are several federal government payments available. As long as they have the legal responsibility and day-to-day care of the grandchildren, they may be eligible for financial assistance.

Typically they must have at least 35% actual care of the child to be eligible. They generally will not be eligible if the parent of the child also lives in the same household.

Legal assistance may be available

Legal Aid is a government-funded agency in each state providing a range of services.

Grandparents can apply for help if they meet the merit test of the case having a reasonable prospect of success. They must also pass the means test based on their assets and income.

But often grandparents own their own home and this disqualifies them from obtaining aid, which is intended for disadvantaged people.

This means that they must engage a private lawyer to act for them.

It is important to use a lawyer who has experience with care and protection processes. Often there is a list of suitable lawyers on Legal Aid websites.

They may charge lower fees than private lawyers with big firms but it is always best to check and compare costs.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
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