BY JOHN ELLIS, FINANCIAL ADVISOR
Are you thinking of reviewing your life insurance plans and wonder what the proper amount is to insure you and your stay-at-home partner? What monetary value would you use?
Before you state a value look at what the average stay-at-home parent does each day; childcare provider, cleaner, general cook, teaching assistant, gardener, and taxi driver to name a few. What should the figure be? Probably, like nine out of 10 people, you underestimate the figure and put a value of €28,460 a year. And using a rule of thumb of putting cover in place of 10 times a salary, you would assume cover of €280/300k to be adequate.
There are approximately 349,500 people in Ireland who work as stay-at-home parents – and the vast majority of these (94%) are women. According to the findings of a new Irish nationwide survey of 1,000 participants for Royal London Ireland, conducted by iReach earlier this year and seeking to understand people’s perception of the value of stay-at-home parents, found the work they do is invaluable for their families and irreplaceable for the community.
And more than eight in 10 people agree that the role of the stay-at-home parent is either under-supported or undervalued by society in Ireland.
Royal London Ireland compared these perceptions with their own research into the monetary value of the homemaker.
According to the provider’s calculations, which are based on real-world wage data, the cost to employ someone to do the ‘duties’ performed by a stay-at-home parent would be an estimated €53,480 a year.
Yet, according to the survey 31% of people estimated the stay-at-home parent’s ‘salary’ to be €20,000 or less with only 12% estimated it to be between €40,000 – €50,000, and just 8% of people estimated it to be more than €50,000.
Commenting on the findings, Karen Gallagher, Interim Head of Proposition at Royal London Ireland, said: “While the role of the stay-at-home parent could be described as ‘priceless’, it is interesting to gauge the public’s perception of its value through our annual survey. And when it came to putting a monetary value on the work pitched it at €28,460, which is similar to last year’s estimate by survey respondents of approximately €28,000. But it is also well below what we have calculated as the economic cost in 2022, which is €53,480.”
Ms Gallagher went on to say: “While 18% of people believe the role of the stay-at-home parent is held in high esteem by Irish society, it’s interesting to see that a large majority (82%) believe homemakers are not supported enough or valued by society.
“What is somewhat less surprising, given that this role is predominantly filled by females, is that more women than men (88% vs 75%) believe that Irish society doesn’t support or value the contributions of stay-at-home parents. This is despite the number of stay-at-home dads more than doubling in the 10 years from 2009 to 2019, rising from 7,000 to 19,900.”
So, what are the average costs covered by the stay-at-home-parent. The calculations reveal that the annual cost to employ someone to do the household jobs usually completed by a stay-at-home parent would be up to €53,000 a year. The weekly cost for example would be: child care provider, €356 a week; cleaner, €86 a week; cook, €157 a week; teaching assistant, €60 a week; and taxi driver, €288.
The duties and responsibilities of the stay-at-home parents will vary from family to family and, interestingly, the evaluation of the cost above is more than that reported by the Central Statistics Office (CSO) as the average annual earnings of a person in full-time employment.
It is understandable that, without doing the calculations, many people will not accurately estimate what the cost would be to replace the stay-at-home parent. But based on the above figures the amount of cover required would be in the region of €500k.
Maybe its time to call your financial advisor for a review.