By Keryn Curtis and Yasmin Noone

The ‘opportunity of a lifetime’ the sector has been waiting for finally arrived at 2.30pm today as the Productivity Commission (PC) tabled its final report from its Caring for Older Australians inquiry, out-of-session.

According to the final report, the future of aged care in Australia is set to be accessible, flexible, equitable and will meet the needs of consumers. It will involve structural reform, which puts the wellbeing and independence older people, as well as quality care and community engagement at its centre.

The new 750-plus page document suggests that the limits on the number of residential places and care packages would be phased out, while distinctions between residential low and high care and between ordinary and extra service status would be removed.

Although seniors will be encouraged to remain in their own homes for longer, when the time does come for the older person to move into residential care, they will be required to contribute up to 25 per cent of funding (capped at $60 000) towards the cost of their care and their wealth will be subject to a comprehensive means test.

Individuals will have a choice as to whether they would like to pay a daily charge or accommodation bond or draw against the value of their home through a government-backed reverse mortgage-type scheme.

Should a senior wish to sell their home to fund their care, they will retain their Age Pension by using an Australian Age Pensioners Savings Account. There will however a safety net for those older people of limited means.

Council on The Ageing (COTA) chief executive and consumer advocate, Ian Yates, said he supported the recommendations of the final report which "leaves no room for doubt about the need for long awaited reform of Australia’s aged care system".

“The introduction of a fair funding structure will ensure the system works and can be sustained to address the growing needs of our ageing population with government still paying the bulk of the costs," Mr Yates said.

“People, young, old and between, all seek to have control over their lives and no more so than when they need assistance to make the most of their life. This report returns control to older people and with it the capacity to maintain their independence,
regardless of their financial circumstances.

“Under the proposed changes, consumers will also have a range of options to control how they pay for care services and if needed, specialised residential aged care accommodation. This would now include the option to use the equity in their homes to meet their costs of care and accommodation.

“For many Australians their homes are their major lifetime investment. That investment is not lost if it is used to pay for aged care, but appropriately reinvested to provide what we need, when we need it."

The detail

Small but helpful changes mark the only major differences between the draft and final PC reports.

One of the key differences is the recommendation for a temporary assistance package for small residential care providers to be established during the first two years of the transition phase.

However, the final report reflects the widely held expectation that the recommendations of the draft report would be maintained with minimal tweaking.

In the final document, the chief economic advisory body recommended that providers will be forced to bring their business up to scratch and compete against each other within a market-based system.

Aged care places will be allocated according to the age old rules of demand and supply and the new system will see limits on quantities of bed licenses and care packages lifted with a five-year transition to an open market.
 
While meeting the approved quality and safety standards, and operating within a price set by the government, providers will compete on a range of dimensions such as the professional and relationship skills of their workforce, the cultural awareness and languages on offer, the quality of food  and other services and their responsiveness to the particular requests of individual clients.

In terms of initial client assessments, the providers will liaise with the gateway but will be able to undertake subsequent assessments in response to a material change in a client’s needs, subject to a risk management audit process.

Safety and quality standards would be retained. An newly established Australian Aged Care Commission would be responsible for quality and accreditation; and would transparently recommend efficient prices to the government.

Providers would also have access to data for planning purposes from the Australian Aged Care Commission in order to predict demand trends and ways to improve quality of services.