13 March 2024

Taskforce recommends wealthy pay more for aged care services

| James Day
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Close up hands of caregiver doctor helping old woman at private clinic. Close up of hands of nurse holding a senior patient with walking stick. Elder woman using walking cane at nursing home with nurse holding hand for support.

According to the taskforce, the aged care sector is not in a financial position to meet expected demand, deliver on the required quality improvements, or invest in meeting Australia’s future needs. Photo: Ridofranz.

Individuals with personal wealth should be asked to pay more for aged care to allow those less well-off to receive greater support, the Aged Care Taskforce has found in its final report.

Led by Aged Care Minister Anika Wells, the taskforce has published 23 recommendations in its final report on the sector that’s expected to reach $42 billion in Commonwealth funding in 2026-27.

“There is a universal acceptance that something must change to ensure all Australians can age with the dignity, safety, and high-quality care they deserve,” Ms Wells said.

The Federal Government currently funds 75 per cent of residential aged care and 95 per cent of home care, which the taskforce found to be sub-optimal.

While the Royal Commission into Aged Care suggested the introduction of a 1 per cent tax levy to help pay for the sector, the taskforce has made a case for wealthier individuals to instead pay more for their own care so those less fortunate can receive greater support.

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Essentially, the government would continue to be the dominant funder of aged care, but those with the means would be asked to contribute more to things they have typically paid for their whole lives, such as accommodation and living expenses.

However, the report said personal care workers and nursing services should be free or heavily subsidised, as they already are for people of all ages in Australia’s healthcare or disability systems.

The recommendation clearly states that these co-contributions should be grandfathered so they don’t impact those already receiving aged care in a system that is “under stress”, according to Ms Wells.

The Aged and Community Care Providers Association (ACCPA) has welcomed the final report, stating that providers are barely able to keep their heads above water and the situation is even worse in regional and rural areas.

ACCPA CEO Tom Symondson said the unavoidable truth was that aged care needed more predictable investment to deliver high-quality services in line with community expectations.

“With our sector losing billions of dollars over the past five years, there has been almost no investment in growing our services to cater for the increasing numbers of people who need them,” Mr Symondson said.

“Lenders won’t lend money to providers to fix these problems because they can’t afford to pay back those loans, creating a vicious cycle.

“The hardest question is how to balance the fairness of asking older Australians with financial means to make a greater financial contribution to their own care against the fairness of asking a shrinking percentage of working-age Australians, who already fund the vast majority of the aged care system through their taxes, to shoulder an even greater burden.”

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Representing 12 per cent of all the nation’s aged care facilities, Catholic Health Australia urged the government to swiftly implement the taskforce’s recommendations.

“As our population ages and more people seek aged care, services will need additional funding to upgrade existing facilities and invest in new places,” CEO Jason Kara said.

“The fairest way to deliver extra funding is to ask people who can afford it to contribute more for their accommodation and living expenses, costs they have covered over their adult lives.

“Right now, user contributions do not meet the cost of provision, and research has shown that people are willing to pay more for their aged care services.

“With most aged care providers running at a loss, these sensible and responsible reforms are urgently needed so they can continue to invest and provide quality care for all Australians – whether they be in a city, regional town or remote community.”

Another taskforce recommendation was to phase out all lump sum payments for aged care costs by 2035 and replace them with a rental-only model.

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Capital Retro5:49 pm 14 Mar 24

That would be starting the journey down the Argentinean Road.

HiddenDragon7:35 pm 13 Mar 24

“Individuals with personal wealth should be asked to pay more for aged care to allow those less well-off to receive greater support….”

A system which pretends that anyone who qualifies for the age pension – even if they only just scrape in below the means test, and even if the “family home” is worth millions – does not have “personal wealth” and thus needs to be further cross-subsidised by others is not going to be sustainable in the medium to long term.

Such a system is just an invitation for financial engineering (already, and for a long time, a major industry in Australia) and particularly for over-investing in the principal place of residence. It is also, of course, completely at odds with the heavily promoted policy objective of encouraging older people to downsize their accommodation.

To put it very bluntly, while we still await the government’s detailed response to the Taskforce report, what we’ve hard so far sounds much more look a political exercise than good policy, with the real motivation being the appeasement of some voters who might have seen this review as a threat to their inheritances.

Another example of not having much is better than being successful.

If you believe such fatuities, why haven’t you given it all away?

Real socialists would have been taxing more over the decades, thus making the government coffers better able to fund adequate services, including as aged care. All of a sudden, they’re realising that the cupboard is bare. This should have been foreseen a long time ago. I can tell you that, if people pay more for aged care services, they’ll want real value for money. Not the dreadful state of affairs existing in many residential aged care facilities.

The recommendation of a rent-only model is a good step. It is so confusing at the moment. It is also off putting for many people nearing the age where they might need a facility. Having to pay hundreds of thousands of dollars up front to secure a place which, if you leave, is not returned in real terms is just wrong. It you have to tie up all your assets in securing a place, it means you can not afford to leave, because the funds “returned” to you will not be sufficient for you to secure a place anywhere else. Basically, the door to those places is effectively one-way. It makes residents vulnerable to exploitation, abuse & neglect when they cannot afford to move elsewhere.

Capital Retro1:54 pm 13 Mar 24

“Individuals with personal wealth should be asked to pay more for aged care to allow those less well-off to receive greater support, the Aged Care Taskforce has found in its final report.”

Well hello, we all ready are. And what is defined as “personal wealth”?

I am sick and tired of these taxpayer-funded socialist think tanks and task forces bashing those of us who elected to become self-funded in retirement. Some of us had no choice as jobs are not always available and self-employment has been the only option and all contributions were subject to tax in and during accumulation.

We are supposedly getting $40 billion a year in tax-concessions. These “concessions” are the same ones that anyone who is a member of a super fund in pension mode gets.

What no-one is acknowledging is that most self-funded people save the government (taxpayers) about $50K a year by not drawing an aged pension and the concessions that go with it.

All these “taskforce findings” will do is force more people away from self-funding into the other system.

Meanwhile, how are the politicians doing? Copping it sweet like the rest of us?

“What no-one is acknowledging is that most self-funded people save the government (taxpayers) about $50K a year by not drawing an aged pension and the concessions that go with it.”

Since when is not receiving a welfare payment considered “saving the government money”?

The entitlement mentality is exactly what we should stop to encourage people to be more self sufficient as you claim to be.

Whilst I don’t necessarily agree with the tasforce’s findings, expecting well off people to fund themselves instead of relying on the taxpayer is exactly in line with that. Those taxpayer subsidies don’t miraculous appear out of thin air, other current taxpayers are funding them.

@Capital Retro
“… all contributions were subject to tax in and during accumulation …”
How did you ever manage to self fund your retirement, after having your super contributions taxed at 15%, CR?

Australia is under-taxed; especially, rates for wealthy should be far higher, with expenditure on enforcement substantially raised.Then public services canbe equally available for all, which prevents ghettoisation as is happening to public schools

Capital Retro2:00 pm 13 Mar 24

The only “wealthy” people I know in Canberra are senior or retired public servants who are/were on the old PSS defined benefit unfunded pension schemes.

Most of them built a tidy real estate portfolio on the way to their taxpayer funded retirement as well.

Some of them whinge that their defined benefit pension is taxable income but then again they have their franked dividends to cover that, don’t they?

They are the only ones that are undertaxed. Are you one of them?

While you seem to have a narrow circle (and you may have meant CSS), if you are not wealthy then you will hardly be affected, will you?

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