Michelle Grattan, University of Canberra
Self-funded retirees and many part pensioners will pay more for their aged care under the government’s reform package, endorsed by the opposition and announced on Thursday.
The changes involve a $930 million extra spend over four years, and $12.6 billion savings over 11 years.
The package, which the government says is the biggest reform in 30 years, will shift the system further towards home care, so people can stay at home as long as possible.
A ‘no worse off’ principle will protect those already receiving aged care from the higher imposts. The treatment of the family home won’t change.
There will be a $4.3 billion investment for Support at Home, starting on 1 July next year.
Under the new arrangements, the government will pay 100 per cent of clinical care services, with recipients contributing to services such as help with showering and taking medications, as well as everyday living costs such as shopping and meal preparation.
How much a person contributes will be based on the Age Pension means test and their personal circumstances, including their level of need and their income and assets.
A lifetime contribution cap will apply across the aged care system. This will mean no-one will contribute more than $130,000 to their non-clinical care costs, regardless of their means or the length of their care. This exceeds the current cap of about $78,000.
For every dollar full pensioners contribute, the government will contribute on average $12.90. For part pensioners the government will contribute on average $6.10 for every dollar.
For self-funded retirees the government will contribute $1.60 on average for those with a Commonwealth Seniors Health Card and $1.20 on average for those without the card.
New entrants to residential care will also pay larger means-tested contributions
There will be a higher maximum room price that will be indexed.
Providers will be able to retain a portion of the refundable accommodation deposit (2 per cent a year for each of five years), rather than paying it all back when the resident dies or leaves.
Under the new consumer contributions, half of new residents won’t contribute more, including all ‘fully funded’ residents. These are defined as full pensioners with limited assets.
Seven in 10 full pensioners and one in 10 part pensioners will not contribute more.
The government introduced legislation for the new scheme on Thursday.
Michelle Grattan, Professorial Fellow, University of Canberra
This article is republished from The Conversation under a Creative Commons licence. Read the original article.
Do you think this proposal is fair? Why not share your thoughts in the comments section below?
Also read: Have you looked into aged care planning? It may be time you started
As a full pensioner who wants to see his days out at home if possible these changes are excellent for me and probably for most of my friends too.
This is shockingly predatory.
One nasty impost has never been mentioned: Providers charge frail, often cognitively impaired inmates a massive 8.32% interest on the cost of a house, when all the inmate has the use of is a single room.
Eg with a RAD of $1 million nearly all retirees would obviously be able to pay it upfront, so a retiree with low income and modest savings is forced to pay $83,200 a yearin interest plus the $30,000 basket of fees.
$113,200 a year will hoover up most people’s savings in jig time, leaving the frail inmate destitute.
Re previous post,f course it should read “would obviously be UNable to pay it upfront…”
8 levels of in-home care instead of 4. Highest level is Palliative Care. They want you to stay at home until you die. Hope your loved ones have nursing skills!
This is so complicated it will take ages to reveal true costs.
I too don’t enjoy the RAD.
The 2% is just a tax a approved by Govt and collected by the private sector.
The charter of rights is much improved
Cheers
So this means my 90 year old mother who does not qualify for a pension (by not much) and lives a frugal life must pay a lot more when she goes into care. She is too old to ever have had Super, she pays full tax on her Share portfolio and gets no concessions of any sort. It will cost her almost all she has left to go into care. This is so unfair to her and her husband.
Ever since big business moved into aged care when they spotted the opportunity to make a lot of money, they have been pushing for these price increases. The old saying goes for the inmates of homes, “bleed em dry until they die:!!
Euthanasia is looking more and more attractive