Improving Long-Term Care in Croatia

4. Strengthening long-term care in Croatia

Abstract

This chapter suggest policy avenues to strengthen public support to long-term care in Croatia. It offers a comprehensive strategy for improving home and community long-term care. The chapter pays particular attention to the most pressing priority for the Croatian government, namely, possible reforms to support further family carers, including with a cash benefit.

Croatia aims to improve home and community care for older people. The chapter provides expert recommendations seeking to inform the process for a reform of the Social Welfare Law, which was carried out in 2022. The first section outlines recommendations for improving home and community care. The second section develops in detail the possible first step of such strategy, advising to first focus on providing more support for family carers and specifying the considerations for a cash benefit for family carers.

A comprehensive range of options to improve home and community care

Developing formal care (and financial schemes) is key to support family carers to ensure that recipients and family carers make decisions without disregarding their personal preferences because of a lack of alternatives. To strengthen home care for older people, Croatia needs a broad package of reforms aiming to develop formal care in a financially sustainable manner while supporting family carers. The following subsections provide an overview of pathways to improve support for family carers and reform at-home care and foster and family homes.

While the following subsections do not cover institutional care provided in nursing homes, it is important to note that any comprehensive long-term care (LTC) system should include a well-developed component on care in nursing homes. Overall, at least 3% of older people live in institutions in Croatia, compared with an OECD average of around 4%. This rate may indicate that Croatia has not developed care in LTC facilities as much as other EU countries. The overall density of LTC beds (in nursing homes and hospitals) remains lower than in most other EU countries. In addition, state and county nursing homes operate at full capacity, leaving no extra beds for interested users – not even those eligible for public support.

Croatia could consider reviewing the price setting of nursing home stays and clarify the eligibility criteria for public support in state nursing homes and county nursing homes, especially given that the state covers part of the expenditure of county nursing homes in most counties. In theory, the Ministry establishes prices for nursing homes, but, in practice, prices are negotiated between the Ministry and the owners (“founder rights”) of the decentralised nursing homes (Bađun, 2017[6]). In addition, an important share of the charges of nursing homes are born by users, rather than the state, including in public nursing homes. It could be valuable to monitor to what extent the most disadvantaged older people can access public nursing homes while funding them adequately.

To be effective in meeting LTC needs among older people, any LTC support should be adequately financed. Even though this project does not focus on funding schemes, the hurdles to estimate LTC expenditure presented in Chapter 2 suggest that LTC spending are not tracked and monitored adequately. In addition, the lack of comprehensive LTC spending estimates and the low supply of formal LTC provision suggest that the LTC system is underfunded.

A cash benefit for family carers and non-financial support are essential

Supporting family carers effectively is a key part of a successful strategy to address care needs among older people. It is beneficial for carers as caregiving takes a mental, physical, and financial toll. It is also beneficial for care recipients, because they often prefer to be cared by family and friends. And it is beneficial for public finances because it involves far less public expenditure for a given amount of care.

Most OECD countries have diverse ways to support carers, including a cash benefit and an array of non-financial support options. A cash benefit for family carers is a means to recognise and compensate carers. Since there is no cash benefit for family carers specifically designed for carers of older people with LTC needs in Croatia, the introduction of a new cash benefit targeted at family carers of older people could be considered. The existing carer’s status is mostly used to help family carers of children with disability, even though family carers of older people are eligible under specific and strict conditions. It remains important that such cash benefit does not trap family carers into low-paid roles, nor incentivise family carers to provide care against their personal preferences due to a lack of adequate alternatives. The section “A new cash benefit to family carers: Eligibility criteria, generosity, and regulation” provides the details on a possible new cash benefit.

Croatia should also consider introducing support services such as respite care, training, and counselling. They ensure quality of care and improve carers’ wellbeing. Such services can be arranged for a low cost, including by leveraging on the voluntary sector or the visiting nurses, as in some other EU countries.

Leave from work to care for older dependent relatives also plays an important role in reconciling the work and family-life balance. In January 2019, the European Council published a Directive on work-life balance for parents and carers with the aim to increase the labour market participation of women and improve the take-up of family-related leave and flexible working arrangements. The Directive also provides opportunities for workers to be granted leave from a job to care for relatives. One concept introduced is the carer’s leave for workers caring for relatives in need of care or support due to serious medical reasons. It is stated that carers should be able to take at least five working days per year. As for the other EU member states, Croatia should adopt laws, regulations, and administrative provisions necessary to comply with the directive. It would be timely to provide a new cash benefit to family carers while implementing the Directive to broaden the package of support.

Formal home LTC could be improved while introducing a cash benefit for family carers

This section presents key elements of possible reform avenues in Croatia, with a view to providing better alternatives to nursing homes, by enhancing the coverage and generosity of care provided at home and in foster care or family home.

Improving formal care is one efficient way to ensure that family carers decide to provide care because they want to. Family carers should not have to be forced to disregard their personal preferences because of a lack of adequate alternatives for their loved ones. Freedom of choice is particularly important for gender equality. Reducing the gender gap in caregiving requires good access to formal care and to financial support. As Croatia is a country with strong traditional family values, it is possible that female relatives will decide to provide care themselves unless their care recipients can access high-quality formal LTC. Providing alternatives to family care can contribute to reducing the gender gap.

Current cash benefits for care recipients could be combined in one cash benefit

The Croatian LTC system relies heavily on two cash benefits, the personal disability allowance and the assistance and care allowance. One avenue of change is to combine the two cash benefits into one unique cash benefit with several grades. For each grade, the eligibility and the level of the benefit could depend on a specified level of LTC need. The level of the benefit could be both income-tested and asset-tested. It could have stricter asset-testing and less stringent criteria on income than the current ones for the cash benefits, with a view to expanding the coverage of the provision. The need assessment should remain standardised across the country and could be adjusted to give more weight to limitations of daily activities (ADL and IADL). As in other EU countries, the levels of benefit should not differ by county.

The use of this cash benefit could be controlled to a certain extent. For instance, it could be provided by the Ministry in the form of vouchers as in France (Chèque emploi service universel). A contract could be agreed between the paid carer and the care recipient, and this contract could be registered by Social Welfare Centres. As in France, social contributions (health, pension) could be paid by the state to incentivise the formalisation of the labour market. The voucher system would contribute to tackling poverty among vulnerable groups as well as their lack of social protection. Carers paid through vouchers could meet a set of eligibility criteria, in terms of health status and training. Low education requirements could be set to ensure the inclusion of current paid informal carers.

Asset-tests can help target limited public social protection budgets to older people who need it most. However, they can also act as a form of taxation on wealth and savings, thus having the potential to introduce distortions in saving behaviours (Oliveira Hashiguchi and Llena-Nozal, 2020[10]). Given a prevalent myopic behaviour in saving for LTC, the distortion effect may be small but is difficult to quantify it. Eleven other EU countries and subnational areas have assets-tested institutional care benefits and schemes. Across these different benefits and schemes, there are a set of common features that assets-tests tend to have (Oliveira Hashiguchi and Llena-Nozal, 2020[10]). First, assets below a certain value are often excluded from assets-tests. However, these thresholds tend to be low compared to the national mean net wealth (e.g. equivalent to 2% of the national mean net wealth in England and Germany), and if public support is not effective below these asset thresholds, then care recipients may still end up using their assets to pay for care. Second, often only a share of all assets above the threshold are considered in assets-tests (although some countries and subnational areas do consider all assets). Third, assets-tests may include or exclude diverse types of assets. For instance, the care recipient’s primary residence is often excluded from assets-tests when the older person or their dependents are living there (e.g. as in home care). Fourth, deferred payment agreements may be used to allow care recipients to postpone user contributions to their care. In such schemes, care recipients agree to use their assets (including their primary residence) to repay the public social protection system for any postponed user contributions. This happens if they sell their house (e.g. when moving to institutional care) or when they die.

Table 4.1. Treatment of assets in LTC benefits and schemes that apply assets-tests

Countries and subnational areas	Benefits and schemes	Setting	Simplified description of rule	Types of assets	Deferred payment?
Flanders (Belgium)	Allowance for the assistance of older people	Both	6% of assets	Primary residence excluded	No
England	Social care	Institution Home	No user contribution for assets below GBP 14 250, full contribution for assets above GBP 23 250	All Primary residence excluded	Yes Yes
Tallinn (Estonia)	Institutional care	Institution	Full user contribution if care recipient has assets	All	No
France	Allocation Personnalisée d’Autonomie Aide sociale à l’hébergement	Both Institution	100% of assets can be used for contributions None	Primary residence excluded All	No Yes
Germany	Assistance for care (Hilfe zur Pflege)	Both	EUR 5 000 excluded	All	No
Hungary	Homes for older people	Institution	Full user contribution if care recipient has assets; higher income allowance for care recipients that have assets	All	No
Lithuania	Institutional care	Institution	1% of assets over EUR 4 2601	All	No
Luxembourg	Complément accueil gérontologique	Institution	None	All	Yes
Netherlands	Wet langdurige zorg (Wlz) Wet Maatschappelijke Ondersteuning (Wmo)	Both	8% of assets over EUR 21 330	All	No
Slovenia	Municipality-subsidized care	Institution Home	100% of assets over EUR 2 500	All Primary residence excluded	No No
Spain	Ayuda al domicilio Prestación económica vinculada al servicio Antención Residencial	Home Home Institution	5% of assets	Primary residence excluded All All	No No No

1. Based on a value of EUR 355 per square meter for a property with twelve square meters. Countries and subnational areas are sorted top to bottom alphabetically by the name of the country.

Source: Adapted from (Oliveira Hashiguchi and Llena-Nozal, 2020[10]).

As in other countries, Croatia could consider more stringent asset-tests on the primary residence. For instance, the primary residence could be considered if no dependent lives in and if it is above a specific monetary value. Croatia could define a specific percentage of all assets (as in Flanders, Belgium, and Spain), or a specific percentage of assets from a certain threshold (such as in the Netherlands). An assessment of the distribution of assets and its median values could be used to determine such thresholds or percentage, using either tax data or the Household Finance and Consumption Survey (Kurnovac, 2020[16]).

At the same time, results from Chapter 1 showed that while about 65% of older people report owning their primary residence, only 5% of older people living alone own their dwelling. This limits the potential of stricter asset test on residence, even though it could still be considered.

One alternative is to cash the value of primary residence by developing deferred payment options. A French study estimated LTC affordability based on assets and concluded that a greater number of persons could finance LTC by using reverse mortgages. Of those without partner, 22% of dependent individuals could pay for LTC if they used all their savings except their home, while 49% of dependent individuals could pay for LTC if they took out reverse mortgages on their main residence. In contrast, only 6% of dependent individuals could pay for LTC out of their income alone. That being said, one-quarter would be able to finance less than 10% of their LTC expenses even when using assets (Bonnet, Juin and Laferrère, 2019[17]).

However, home equity programmes are typically not very developed in terms of housing market share and number of providers. Home equity programmes are still more products of last resort than well-thought purchases as part of a retirement planning or a health care plan. This is explained by several challenges on both the supply and the demand sides leading to an important regulation and the need for government-insurance programmes (Knaack, Miller and Stewart, 2020[18]). One policy option to stimulate the use of reverse mortgages would be for the public administration to act as lenders (Roberto Martinez-Lacoba, 2020[19]). A study of the potential for such products in Croatia suggests that a robust regulatory framework for reverse mortgages will be necessary as well as a strong role for the Croatian government (Marijana Badun, 2020[20]).

Two broad types of deferred payment exist through home equity programmes: the reverse mortgage loan and the home reversion. The main difference with regular mortgage is that the borrower does not need to make any repayments if she lives in the home. With respect to reverse mortgage, someone can borrow against the value of their home and receive funds as a lump sum, a fixed monthly payment, or a line of credit. The entire loan balance becomes due and payable when the borrower dies, moves away permanently, or sells the home. Then, the loan must be repaid by the heirs. They can reimburse the credit to the lender and keep the house or sell it. (Bonnet, Juin and Laferrère, 2019[17]). Contrary to private LTC insurance, reverse mortgages can be purchased at old age, regardless of borrower’s health status. In the case of home reversion, the home is partially sold, and the person signs a lease-for-life agreement. Contrary to reverse mortgage loan, home reversion implies a transfer of ownership.

The first form of house equity programme has been available in France for two centuries (“le viager,” a home reversion programme). Reverse mortgages were first available in the United Kingdom and have been existing in the United States since the 1960s. They were introduced in New Zealand and Canada in the 1980s. Other countries, like Spain, also have a home equity programme. In Canada and the United States, borrowers aged 62 years or older are eligible for reverse mortgages. In Spain, homeowners aged 65 and older are eligible for a reverse mortgage (Bridge et al., 2009[21]).

The type and degree of regulation varies across countries. The most stringent regulation is in the United States for the government-insured scheme (HECMs). The insurance guarantees that the borrower’s debt will never exceed the property value and that borrowers will receive regular payments from the loan even if the property loses value or the lender becomes insolvent. They are only accessible via a provider approved by the Federal Housing Administration. More broadly, the Department of Housing and Urban Development regulates reverse mortgages (Paying for senior care, 2020[22]; Bridge et al., 2009[21]). In the US, LTC facilities may be expensive, and most families rely on Medicaid to cover that cost. Eligibility criteria include asset test on the primary residence: one cannot own a home, but not live in. Therefore, a single person is required to sell their home to receive Medicaid support (this does not apply if a spouse remains at home). However, the decision has been carefully weighted because older people would not profit from the reverse mortgage is it were to move to an LTC facility within a brief period. In other words, this solution is attractive to borrowers only if the reverse mortgage can be used to pay for in-home care over a relatively long period (Paying for senior care, 2020[22]).

In the United Kingdom, reverse mortgages are regulated by the Financial Services Act, or the Consumer Credit Act and providers can self-regulate under the Mortgage Code or Safe Home Income Plan. The UK’s Financial Services Authority also regulates most entities that are involved in reverse mortgages and promotes transparency to protect borrowers (Bridge et al., 2009[21]). In the United Kingdom the reverse mortgage market is still small, despite high homeownership rates among older people and high demand. This small market is concentrated in London, Southeast and Southwest, where house prices are high. However, there is a strong demand in other parts of the country where both real estate and non-real estate wealth are lower. Yet, the market is not developed as much in the other parts of the country. This is partly because of the risks faced by suppliers – providers need high house price growth to make profit on reverse mortgages. A study evaluated how much it would cost the government per scheme in each region to equate provider’s expected profit return in every region to levels in the Southeast, one of the regions with the most developed market in reverse mortgage. The estimates indicate that the cost for the government would be large (Sharma, French and McKillop, 2020[23]).

In France, the financial public institution “Caisse des Dépôts et Consignations” launched in 2014 the “Certivia” fund to organise the purchase and management of home reversions by the older people aged over seventy. The borrowers sign the loan with the public fund, which is financed by the state (first envelop was EUR 120 million). The fund covers the cost of structural renovations and property taxes. The borrower is responsible for the other charges and housing taxes. In addition, an heir may acquire the property at the market price, after the death of the borrower. Estimates indicate that there are about 4 000 reverse mortgage loans sealed every year in France – a low number (Notre temps, 2015[24]).

The eligibility criteria of in-kind home care benefit could be standardised and improved

The eligibility for in-kind home care benefit does not currently rely on a nation-wide standardised needs assessment tool. As described in Chapter 2, local authorities are responsible for assessing the LTC needs and the level of home care benefit, so the need assessment varies by county. A standardised need assessment could be implemented to ensure equal eligibility to the benefit across Croatia. In addition, the eligibility and the level of in-kind benefit could continue to depend on LTC needs, income and assets, but there could be stricter asset-testing and less stringent income-testing, with a view to expanding the coverage and the generosity of the provision.

Foster care and family homes could be enhanced

Foster families and family homes are a well-regarded alternative to nursing homes for care recipients with moderate-to-severe LTC needs. In Chapter 3, focus groups discussions shed light on positive opinions on foster care; interviewees assume that foster families have more time for each older person than LTC workers in nursing homes and that quality standards are higher (e.g. one older person per bedroom), even though some believe that quality controls should still be more frequent.

As explained in Chapter 3, participants in focus groups believed that foster families did not accept older people when they were immobile or suffered from dementia because the fee did not cover enough the additional care (according to them, the fee is between HRK 1 800 (about EUR 240) and HRK 2 400 (EUR 315) depending on the health condition of older people). Incentives in the form of additional fees and training could contribute to developing these alternatives. The current fee could be increased to compensate more generously those caring for older people with severe needs (e.g. mild-to-severe cognitive impairments, almost-bedridden or bedridden care recipients).

Foster families could be offered additional training when caring for older people with more severe LTC needs to ensure high-quality care. Training options could include medical care, such cleaning wounds and pressure ulcer, dementia training, end-of-life training, and a training on the management of their own well-being to avoid physical injuries and mental health issues, like anxiety.

It would also be advisable to develop foster care and family homes where LTC facilities are lacking most and where the pool of family carers tends to be reduced. In coastal counties, where tourism if an important source of revenues, foster care and family homes remain under-developed compared with other less-privileged counties.

While the OECD has not undertaken a thorough analysis on foster care and family homes in Croatia and in other OECD countries, it recommends exploring successful practices of child foster care in Croatian coastal counties and to consider developing active recruitment strategies, potentially through a public structure gathering all stakeholders, including not-for-profit organisations. A top up could also be considered for foster families in coastal counties to provide sufficient financial incentive.

In France, the state has tried to develop foster care for older people, with a limited success. A brief report suggested avenues of changes in 2008, among other initiatives. It highlighted major challenges, especially those related to recruitment, the under-valued image, and substitute recruitment (so that the carer can take leave). Among other recommendations, it suggested creating a supporting structure (such as a public umbrella structure to include not-for-profit organisations and the private sector), using vouchers (“Chèque emploi service universel”) and speeding up the validation process. It also promoted the creation of a quality label for foster care (Rosso-Debord, 2008[25]).

Recommendations for children foster care in other countries can also provide some insights for foster care for older people in Croatia. In the United States, recruitment efforts are most likely to be successful if they focus on individuals with similar characteristics. Good recruitment practices also include hiring programme co‑ordinators to lead community-based recruitment teams and assigning staff specifically to seek out family members. Agencies often partner with not-for-profit organisations to find foster caregivers (United States Joint Economic Committee, 2020[26]). Targeted recruitment has also gained momentum as a more effective strategy for recruiting foster families. Recruitment can be targeted towards specific professions, faith groups, ethnic groups, or geographic areas (Casey family programs, 2014[27]). In the United Kingdom, some local authorities join together to fund advertising campaigns, but with limited success (Baginsky, Gorin and Sands, 2017[28]). Research on foster care in children has shown that ‘word of mouth’ is one effective recruitment strategies, and many local authorities in charge of foster care regularly involve their existing foster carers in recruiting other carers (Baginsky, Gorin and Sands, 2017[28]). A set of evidence in other countries shows that ‘word of mouth’ is an important recruitment strategy (Randle et al., 2014[29]; Casey family programs, 2014[27]).

It is also important to develop strategies to keep foster families (Baginsky, Gorin and Sands, 2017[28]). Organised peer support and respite care are two efficient strategies to maintain the engagement of foster families (Casey family programs, 2014[27]).

A new cash benefit to family carers: Eligibility criteria, generosity, and regulation

The Ministry of Labour, Pension System, Family and Social Policy of Croatia indicated that a priority among LTC reforms is introducing a cash benefit targeted at family carers. Ideally, the cash transfer should come with a package of support for family carers providing intense care. – for instance, training and respite care should be included.

The OECD recommends that such benefit targets poor family carers who provide full-time care to older people with severe needs. The amount of the cash benefit should be aligned with those of the carer’s status and the poverty line to ensure decent living conditions and some equality with other carers. The new cash benefit could aim to compensate for the opportunity cost for family carers providing intense care.

The design of such cash benefit could build on England’s cash benefit, in the sense that eligibility criteria could be blind to family ties or a common residence. This would be different to Spanish and Portuguese cash benefits, where the cash benefit focusses on family members living with older people. While this new cash benefit would be primarily intended to support families, friends, and neighbours, it would also recognise the role played by paid informal carers privately hired by families. These carers in the grey area deserve decent living conditions and could also receive qualifying training at the end of the caring period.

This subsection details possible details of a cash benefit for carers, based on practices found in OECD countries (Rocard and Llena-Nozal, 2022[15]). At the same time, the OECD recommends piloting the introduction of a new cash benefit to carers in a minimum number of key counties (e.g. Zagreb, one on the coast and one in the North) and evaluating the introduction through a comparison with three other counties sharing similar characteristics. In a first phase, it would be important to consult stakeholders to collect their views on the potential challenges as well as their degree of preparedness. In parallel, Croatia should decide the evaluation criteria (the outcomes of interest) and the evaluation method. The OECD recommends planning a counterfactual impact evaluation. This would enable the Ministry to assess the changes that could be attributed to the implementation of the new cash benefit. In contrast to outcome monitoring, which only examines whether targets have been achieved, impact evaluation compares between what actually happened and what would have happened in the absence of the intervention. Even though randomised evaluation is the gold standard to evaluate policy impacts, it might be more feasible using a simpler method complemented with econometric tools to estimate the impact of the pilot test. The design of the cash benefit to family carers should be modified based on the results of the evaluation. After feedback of stakeholders and evaluation, the cash benefit could be implemented across counties in Croatia.

Target population and eligibility criteria

LTC needs of the care recipient

The objective is to select care recipients with severe LTC needs by using a standardised need assessment. Croatia has already developed a standardised need assessment that could be used, and some care recipients would have already been assessed because of their high LTC needs. Since 2017, a panel of experts has determined the type of disability and the degree of disability of older people claiming the assistance and care allowance and the personal disability benefit in Croatia. The panel of experts is chaired by a physician and is composed of at least one physician and one expert on disabilities who have a minimum of two years’ experience each.

At the same time, Croatia could consider modifying the current need assessment to include more questions related to daily life limitations and focus less on specific diseases or disability. Needs assessment based on limitations are more inclusive than those based on reasons behind limitations (e.g. disease, impairments). It would be appropriate that a panel composed of medical and social experts, with knowledge of older people dependency and limitations, review and define further the indicators and thresholds used to evaluate the degree of disability. The level of disability should require over 40 hours of LTC and daily care, as detailed in the next section.

While there is no single internationally accepted and standardised definition of what constitutes LTC needs. standardised need assessments are in place in Austria, Belgium, Czech Republic, France, Germany, Latvia, Lithuania, Netherlands, Portugal, and Spain. For example, in Germany, the Health Insurance Medical Service or other appointed independent assessors use an instrument measuring ability in six domains (mobility, cognition and communication, behaviour patterns and psychological problems, self-reliance in personal care, self-reliance in taking medication, ability to structure life – e.g. arrange a daily routine). Furthermore, the instrument considers the ability to perform activities outside the house and manage the household (e.g. shopping, finance). For each criterion, a point value of self-reliance ranging between 0 (full self-reliance) and 3 (full dependence to assistance) is attributed. The domains have different weights, the highest weight being for the personal care domain and the lowest for the mobility domain. The total score is used to attribute a level of severity of impairment (from “one. minor impairments” to “five. most severe impairments”). It is worth noting that Germany recognises dementia as a condition that requires more support even if the person has no physical impairments.

Other characteristics of the care recipient

If a new cash benefit were introduced, a minimum age should also apply to the care recipient, as this is commonly the case in most OECD countries. A proposal is to use retirement age as the threshold. However, it would be valuable to have the recommendations of an expert in disability benefits in Croatia to ensure a certain consistency between this proposition of a new cash benefit and disability benefits for adults (aside from the personal disability benefit). The main advantage of such minimum age is to ensure that only family carers taking care of older people with LTC needs are eligible. However, LTC needs can start at an earlier age, especially in the Northern counties, where the health status tends to be poorer (see chapter 1).

As in many other EU countries, the cash benefit for family carers would be unrelated to the LTC benefits for the care recipients living at home. Care recipients could receive LTC cash benefits and in-kind home care (although in-kind LTC benefits are “care sighted”: those with relatives able to help are not eligible for in-kind benefits).

Number of hours of care provided

The OECD recommends setting a minimum threshold on the number of hours of care to target those providing most care, hence those needing the most public support, building on England’s example. The caregiver should provide care for at least 40 hours per week in total. In Croatia, family carers who work report a median of 35 hours of care, compared with 44 hours for non-working and non-retired family carers (about 35% of surveyed informal carers)1 (see chapter on the profile of family caregivers). In England, the threshold is 35 hours per week.

The main advantage of this threshold is that it ensures a stricter coverage of the benefit to help those than need most help. At the same time, the principal disadvantage is that it excludes a share of carers who report struggling to combine care and other activities. As seen in the chapter on the profile of family carers, combining care and work can be challenging and leading to financial problems. The field survey carried out indicated that about 27% of carers who were employed reported that they had problems to a great extent to jungle between care and their own daily activities.

Characteristics of the family carers

Building on England’s practice, it would not be necessary for the family carer to be a relative and would not have to live in the same household. Friends and neighbours could also be family carers (especially in rural areas) and this approach can contribute to formalising paid family carers working in the grey labour market. At the same time, this (absence of) eligibility criterion holds a contradiction, because the first target population is meant to be family members. The actual target population would have to be closely monitored in a pilot test to evaluate whether family members prevail and assess to what extent the cash benefit can contribute to formalising the grey market. The field survey on informal carers found that an estimated 10% of carers were informally hired and paid by families (this is likely a conservative estimate).

Family carers should be at least aged sixteen or over and should be a resident of Croatia. The main advantage is that it ensures that citizens and some foreign-born are included, but it may trap some young Croatians or migrants in a form of low-paid work. Family carers should not be eligible for disability benefit (assistance and care allowance and the personal disability benefit) to make sure that they are fit to care. One challenge is the maximum age. The OECD suggests that while the family carer could be over retirement age, the person should not be receiving a pension benefit. An option whereby carers can combine pensions and a cash benefit may require a reduced cash benefit, depending on the amount of the pension.

Family carers should not be in full-time education or work so that they are available to provide care hours. While some countries allow for a combination of work and cash benefit, this solution has several drawbacks. It can make the benefit more intricate to be able to obviate a trap (not increasing working hours to keep the benefit2). In addition, work constraints the amount of time available for providing care and combining both can also lead to mental and physical health problems.

Amount of the cash benefit

The amount of the cash benefit should be aligned with the cash benefit of the carer’s status and the net amount of minimum wage. The amount should be sufficiently generous to compensate the time spent caring. At the same time, it should remain lower than the net minimum wage and should not provide a financial disincentive to drop out of the labour market. This net amount of the benefit should not be lowered by taxes or social contributions opening rights to access public pension or health care. Instead, a covenant with the Social Welfare Centres could be implemented to cover at least pension rights and health insurance. This would be in alignment with the current carer’s status for people with disability.

The introduction of such cash benefit might open the door to a professionalisation. It would allow relatives, friends, and neighbours to receive the cash benefit and social protection rights and might encourage others currently not doing so to start caring. It can also lead to the formalisation of the grey market of informal carers. As previously stated, the actual target population will have to be closely monitored in the pilot test to evaluate whether family members prevail and to which extent the cash benefit can contribute to formalising the grey market.

Type of regulation

The care recipient and the carer could sign a contract that could be registered by the Social Welfare Centres. The contract should state the tasks undertaken and provide information about the location of care and the caring hours. Defining a contract between the care recipient and the carer would enable Social Welfare Centres to monitor the care provision, but it would create additional administrative tasks for everyone (SWC, family carers and care recipients). It would be better for monitoring purposes to allow only one carer per person in need against compensation with the cash benefit. The cash benefit would be directly provided to the carer instead of relying on care recipients to transfer the money to ensure that the carers receive the money.

Finland is an interesting country example in the sense that municipalities directly hire family carers, and such an employment model could be considered by Croatia in the future. In Finland, the amount of the support depends on the intensity of the care needed. If the caregiver is unable to work due to LTC provision, the minimum amount is EUR 827 per month, and in the case of less intensive care provision, EUR 413 per month. This allowance is taxable, and it counts for pension rights (although at low level). Additional municipal services include, for example, help with washing, medical care, and meal deliveries. In addition, registered family carers are insured for accidents and are entitled for days off (three days off per month for intensive LTC provision). Municipalities may also offer temporary institutionalised care as a form of respite care for family carers. Since 2018, municipalities have provided coaching related to caring duties. There are about 50 000 registered family carers, out of which approximately 60% are pensioners (Eurocarers, 2021[30]).

The care recipient and the carer would have to renew the contract regularly (e.g., every 2 years) to ensure regular means testing, such as in Spain and France. Because this contract is not a work contract, it does not need to entail a regulation of sick leave, nor the number of labour days and nor the maximum total amount of hours of care per week (the minimum being 40 hours per week). At the same time, in terms of annual leave it could be consistent with the carer’s status (status njegovatelja) to include an entitlement of 30 days of leave.

With respect to monitoring, visiting nurses, workers hired by the Zazeli programme and other social workers should be able to monitor the impact of care provided by the family carers. In case of insufficient or inadequate care provision, they could fill a form to raise their concern to the Social Welfare Centres. Relatives should also be able to fill a form to report on maltreatment, neglect, or abuse. Social Welfare Centres would be in charge to follow-up and potentially terminate the contract. To control against fraud, circumstances could be checked at any time and fraud officers could also get information about the family carer from other government agencies and from a former employer or bank. Benefit fraud should be prosecuted, or the family carer asked to pay a penalty. If the family carer committed fraud, the cash benefit should be stopped and become unavailable in the future.

Training options for caregivers

As in Germany, a visiting nurse could visit the family carer at the older people’s home to provide a short training on medical care acts (like cleaning wounds and managing pressure ulcer) and technical movements (e.g. shower someone, turn older people in bed). The visiting nurse could also teach about dementia if needed. While this training would enable carers to be more qualified, it would also mean that visiting nurses would see an increase of their workload, even though the results of the field survey indicated that many already trained family carers. Family carers should also be entitled to mental health care or counselling support to discuss how family care impacts their mental well-being.

A qualifying training option could be available at the end of the caring period to give the opportunity to carers to develop their education and increase the odds to find a position afterwards. This is particularly key as most carers are women who might have low career perspective before caring. Taking on care responsibilities full-time should not translate into the exclusion of the labour market for the rest of a working life. In addition, the former paid informal carers privately hired by families (whose labour status would be formalised) could also receive a qualifying training. This could help them improve their career perspective. However, such training would create additional expenditure.

Leave and respite care

Countries usually do not provide leave associated with the cash benefit, because the cash benefit is not meant to be the equivalent of a wage. However, a few countries set a fixed number of days of respite care. The OECD recommends setting respite care days for Croatia. An example could be the respite care in Slovak Republic, although the take-up is very low. In the Slovak Republic, municipalities provide respite care for a maximum of 30 days. Setting respite care at 30 days would also be consistent with carer’s status (status njegovatelja), which allows to take up to four weeks per year of holidays. As in Germany, respite care could become available after having provided care for at least 6 months.

Alternatively, Croatia could provide in-kind respite care. At the same time, take-ups for in-kind respite care are typically low because of access and “logistic” difficulties: in-kind respite care may not be available and organising respite can be an organisational challenge.

Notes

← 1.  Data are based on the distribution of weekly hours of care for family carers who provide personal care and help with household chores and other activities (e.g. taking medication). These data are to be interpreted with caution as it may be possible that some carers did not correctly allocate time spent on each type of care or help, overestimating the total number of hours.

← 2.  If benefit entitlements are fully withdrawn when earnings are above a certain moderate threshold, individuals will not be incentivised to work more than a limited number of hours.