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Government dismisses increasing aged care user-pay options

The Coalition Government has ruled out including the full value of an older person’s home in the means test for residential care and abolishing annual and lifetime caps on user contributions from among the recommendations of the five-year review into aged care reforms.

The move to dismiss these measures before consultation has been condemned by provider and consumers groups.

The aged care legislated review, which was led by David Tune, examined the effectiveness of the 2012 Living Longer Living Better aged care reforms and produced 38 recommendations for future reform and aged care provision (read our story here).

Among those, the report recommends the full value of the owner’s home be included in the means test for residential care and that government abolish the annual and lifetime caps on income-tested care fees in home care and means-tested care fees in residential care.

When releasing the report on 14 September , the Federal Government said a taskforce in the Department of the Prime Minister and Cabinet would consider the review’s findings and recommendations.

However, the Coalition Government will not support the recommendations relating to the family home and caps on income and means-tested user contributions, Minister for Aged Care Ken Wyatt and Minister for Health Greg Hunt said in a joint statement.

Ian Yates

Ian Yates, chief executive of consumer peak COTA Australia, said the review’s recommendations aim to improve the financial sustainability of the aged care system and meet to the needs of the ageing population particularly those without the means to contribute to their care costs.

“If politicians on all sides are going to rule out greater user contributions such as some of those recommended by Tune, they must tell Australians how they will fund aged care into the future; either government pays more or services will decline in quality and numbers,” Mr Yates said.

Pat Sparrow

Aged & Community Services Australia CEO Pat Sparrow said the report afforded an opportunity for discussion about the sort of care expected and how it would be financed and it was disappointing the government ruled these measures out.

“By ruling out these two financing options, the government is limiting its own ability, as well as that of providers, to respond to the changing needs of Australia’s rapidly ageing population,” Ms Sparrow said.

Australia needs a sustainable, flexible and quality aged care system to cope with the projected future need and parliament, the community at large and the aged care industry needs to be part of the discussion and the solutions, she said.

Sean Rooney

Similarly, Leading Age Services Australia CEO Sean Rooney said LASA was disappointed the government was discounting some recommendations without due consideration.

“While LASA understands the sensitivities of any potential changes to consumer contributions for age services, the government’s approach to ruling out any consideration of changes to lifetime caps and means tests involving the family home, shuts down much needed discussion on how to fund the system now and into the future,” Mr Rooney said.

Private operator Bupa has called on the government to reconsider at least increasing the capped value of the owner’s home in the means test, which is currently $162,087, and increasing the annual and lifetime caps.

This would be consistent with the original Productivity Commission recommendation and research that found consumers didn’t mind being asked to pay more if they could afford it, said Jan Adams, Bupa’s global chief nurse and Bupa Aged Care Australia acting managing director.

“Bupa recognises any changes to means testing and individual contributions are sensitive, but these options should be seriously considered as part of much needed national conversation on ageing and aged care, and how best to fund it,” Ms Adams said.

Related coverage

Tune recommends wide-ranging changes to further reform

Home care data reveals 90,000 package shortfall

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4 Responses to Government dismisses increasing aged care user-pay options

  1. Alice September 17, 2017 at 1:36 pm #

    So on one hand the Government is happy to consider concepts like allocating residential places directly to consumers (!! – sure the financing, building and managing multimillion dollar facilities will have no problem getting off the ground with conditions like this) but yet refuse to actually look at areas where if people have the funds and happy to pay for services which add value – it’s a no go? What does the Government want? At the rate they’re going, and we can see major providers pulling out of providing services under NDIS due to cost pressures and we’ll end up going back to where it all began. Trends go in circles. It’s been very frustrating to watch a system (home care) which worked rather well due to its simplicity, however definitely needed improvement to increase efficiency, workforce and capacity – just throw the baby out with the bathwater completely. I’ll say it again, you cannot apply a capitalist, private concept to a government run system (with all of its glorious red tape) and expect it to increase innovation. How much do people actually understand the true costs of aged care? And why are we putting this information in front of people with no concept of how it works but yet will complain there is no safety net to support them?

  2. Drew Dwyer September 19, 2017 at 10:31 am #

    Live longer live better is going to be more like live longer die sick and poor. Consumers need information, time and space to plan for their aged care needs. The system is broken and needs clear directions for financial decisions to remain active and positive in the new age of longevity.

    Either the government is paying or the consumer is paying. Those that can deal will make much better decisions and those that can not will have their safety net.

  3. Jim October 9, 2017 at 9:28 am #

    Government decision is a step in the right direction for consumers. Privatization and user pay has failed to deliever in many sectors, eg utilities, VET, Public transport etc. Aged care is no different. Just look at the recent exposure of some for profit providers in residential care and retirement villages.
    Not surprisingly, the UK experience with privatization of aged care has resulted in a system in crisis.
    While the ideologically blinkered of the Productivity Commission is to be expected, one wonders whose interests groups like COTA are really representing when they support user pay.

  4. Susie October 14, 2017 at 1:56 pm #

    The means test is a Robin Hood type tax – the rich pay for the poor. But only some of the rich pay – the ones with savings, not expensive houses. The Tune Report says it is inequitable. So does ACFA. But the government doesn’t care. The rich ones with expensive houses are safe in the forest.

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