The federal government is close to unveiling its plans for older Australians to pay more for aged care, after months of closed-door negotiations with the Coalition.
Both sides have indicated “detailed” and “constructive” conversations have brought them closer to a deal on the significant reforms, which would also reinforce quality standards in the sector.
But a government spokesperson told the ABC there would not be criminal penalties for “dodgy” care providers, a concession to sector concerns that the threat of jail time would scare off volunteers and paid staff from the under-resourced sector.
Aged care minister Anika Wells is expected to unveil her proposal for a new Aged Care Act as early as this week, after striking a deal and holding meetings with the sector.
A draft of that act — which was a recommendation of the 2021 royal commission — was published for consultation last year with the crucial section on missing funding.
But in March, Ms Wells hinted at the government’s thinking when a funding taskforce she had convened poured cold water on the royal commission’s calls for a taxpayer-funded aged care levy.
Instead, the taskforce said care recipients — who pay just 25 per cent of residential care costs and 5 per cent of in-home care costs — should pay more themselves when able to do so.
That broad direction has Coalition support.
Opposition Leader Peter Dutton used his first Budget reply speech in 2022 to offer the government a path to contain the public cost of aged care, the sixth-fastest-growing category of federal government spending.
But exactly how users will pay more, and how much, remain unclear. Ms Wells told colleagues on Tuesday the bill would address the financial sustainability of both residential and in-home care but did not elaborate, according to a party spokesperson.
Bracing for the baby boom
Ms Wells’ taskforce argued it was not “fair” or “sustainable” that taxpayers pay for so much of the cost of care.
Core to that argument is the demographic challenge presented by the unusually large baby boomer cohort, which is beginning to reach aged care age, and the unusually small generations beneath it.
The result is growing cost for aged care on the one hand and a shrinking pool of taxpayers to fund it on the other.
The taskforce sketched out an alternative system where users contribute more.
In residential care, it advocated an approach where the government continues to pay for care, but users contribute to accommodation, food and other costs where they are able.
It recommended the existing basic daily fee paid by residents be complemented by another fee paid by high-means residents.
It also said the option for residents to pay for accommodation via a deposit – typically paid from the value of their home – be phased out, with only a daily accommodation fee to remain.
In home care, where fees are not compulsory and most do not pay at all, the taskforce said there should be a new “fee-for-service” approach, where again the government would cover care costs and users would cover food and other services.
Rip it up and start again
The new fee structure is just one component of a mammoth new Aged Care Act, which would replace the existing set of convoluted and overlapping laws with one “simplified, rights-based” law governing everything from eligibility and funding to quality and safety regulation.
But the simplification process is not simple. A draft of the law, published for consultation, drew criticism from the sector for having too many “vague motherhood statements” that could be hard to enforce.
That contributed to the sector’s fears about the prospect of criminal penalties for failure to comply with vague standards.
Those penalties have been removed but concerns in the sector will remain about whether the aspirations of “equitable access” and “free choice” could create unmeetable expectations, especially in regional areas where options are often limited.
The government has limited time to address those concerns if it is to fulfil its commitment of having the new act in place by July next year.
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