The Royal Commission wrapped up its funding and financing hearings – and its final public hearings before it delivers its Final Report in February 2021 – this week.
While former Prime Minister Paul Keating’s HECS-style loan scheme made the biggest headlines, there was one clear message from the hearings: Australians must pay more for their aged care services in the future if they can afford to do so.
Professor Michael Woods – who steered the Productivity Commission’s influential ‘Caring for older Australians’ inquiry back in 2011 – labelled it “absolute madness” to have taxpayer funded aged care for those who can afford to pay for their own care through their assets.
“For other people who have accumulated wealth and earn income above those certain levels, there is little argument as to why they should be spared drawing on their income and assets and having that funding transferred to taxpayers,” he stated.
Family home should be included in means test, Treasury says
The current Treasury Secretary Dr Stephen Kennedy also supported the move, saying that the family home should be included in any means test for aged care services.
Currently, the value of the family home is capped at $170,000 in the means test for residential care, while it is exempt from the testing for home care services.
Deputy Secretary of the Treasury’s Fiscal Group Jenny Wilkinson said this disadvantages people who have some wealth because they have a greater proportion of their money captured in the means test.
“There’s an arguable case that that’s not an equitable outcome,” she said.
The Royal Commission’s Counsel Assisting team concluded the same.
Senior Counsel Assisting Peter Gray QC noted during his closing address that the Government spent $98 billion in total on services for older people in 2017/18 and the States and Territories $30 billion – compared for just $5 billion by individuals.
More work required to help reform the system
He added that more needs to be done to investigate the means testing arrangements and address issues such as if there is a protected person living in the family home.
“Further consideration of them will involve exploration of fair and appropriate measures to bring the value of the primary residence into the means-testing arrangements to a greater extent than at present, while not prejudicing the rights of others who share the home,” he said.
Of course, there will always be older people who will not be able to afford services and they should certainly be supported by the taxpayer.
But for the rest of us, the fact is we all pay for our own accommodation until we enter aged care – so why should this change?
The reward will be a better-quality system that will provide both ‘care’ and quality of life (or in Commissioner Lynelle Briggs’ words, joy).
Isn’t that what we all want in our final years?
Discussion1 Comment
How about some accountability as to how the funds from the Government are being spent in Age Care homes? Guess there will be a spike in suicides if people have to go to a Nursing home.
The fee for Nursing homes are really expensive now so how will people be able to support themselves till they die? What happens if the money runs out? There goes the Children’s inheritance.