A group of aged care providers and advocacy services are proposing a radical new funding model for aged care that would see wealthier older Australians forced to pay more.
It’s no secret Australia’s aged care sector is woefully underfunded. Successive governments of both political stripes have failed to tackle the financial shortfall and it has been older citizens who have paid the price – financially and emotionally.
Now, a team of aged care providers and seniors’ advocacy groups are calling on the government to raise the means-test threshold to include the family home, in a bid to stabilise costs in the industry, The Australian reports.
Catholic Health Australia (CHA), the Council on the Ageing and the Aged and Community Care Providers Association, in conjunction with financial analysts Stewart Brown, say the proposal is needed to plug what the group says is a $48 billion funding shortfall.
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Under the current system, when an older Australian is means-tested for a place in an aged care facility, the government only considers the first $186,000 of their property’s value – irrespective of what the total value of the home is.
This means the owner of a modest property would be assessed as having the same means as someone with a multimillion-dollar home.
Taxpayers are subsidising around 75 per cent of the cost of a person’s aged care needs, and the group believes it would be fairer to ask wealthier patrons to pay more, rather than increasing the burden on the taxpayer.
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In a pre-budget submission, CHA notes that the aged care sector is under severe financial pressure, with as many as 70 per cent of facilities operating at a loss.
CHA is also asking that the government remove caps on how much providers can charge for services, which is now around $30,000 per year – or 85 per cent of a single person’s basic Age Pension payment.
CHA CEO Pat Garcia says funding reforms are urgently needed if we want to prevent the total collapse of the aged care sector.
“The sector needs huge investment and there are two places it could come from: government coffers or increased user contributions from those who can afford to pay,” he says.
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“Taxpayers already provide approximately 75 per cent of funding for residential aged care, and this contribution has grown at roughly double the pace of consumer contributions over the last decade.
“Given the median value of an Australian home today is about $1 million, the outdated means test cap of under $200,000 means the government is turning a blind eye to a staggering amount of money.
“If we are to continue to care for our older Australians, then it is fair that we have to dig deep into our accumulated wealth now and not sheet the bill home to future generations.”
Is it fair to make wealthier people pay more for aged care? Or is that just punishing them for their success? Let us know what you think in the comments section below.