ACAA proposes aged care annuity

The peak association has presented government with a flexible payment option for aged care residents.

Aged Care Association Australia (ACAA) has proposed a new aged care annuity system to increase consumer choice.

The association wants consumers to be able to purchase a refundable, lump-sum annuity in conjunction with an increased accommodation charge.

The annuity would not have to cover the entire accommodation costs and interest from the payment could be used to offset daily care fees.

According to modelling conducted by ACAA, a $100,000 annuity would reduce a $60 daily care charge for a single room to $36.

However if clients chose to pay a larger amount, they could still pay for all their accommodation needs upfront.

The payment would be government guaranteed and provide the same pension benefits that accommodation bonds currently attract.

“It endeavours to maximise the choices available to clients to meet their needs,” said the CEO of ACAA, Rod Young.

“[We have] recommended to Government that they allow consumers to elect to pay a daily fee or to purchase an Aged Care Annuity or a combination of both.”

Mr Young said the annuity system could also be useful for people who require a temporary stay in residential aged care.

“It gives those people the option of paying the interest component or paying the daily fee without the anxiety of selling their home,” he said.

Click here to see a more detailed description of the aged care annuity.

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