Aged care is a budget risk
The finance department has advised the government to consider alternative funding sources with the costs of aged care are set to soar.
The sector is urging the government to explore new funding arrangements after the Department of Finance highlighted aged care as a long-term budget risk.
In a document prepared for new finance minister Senator Penny Wong, the department suggested that the government should consider ways that older Australians could make reasonable contributions to the cost of care.
According to the department, the costs of aged care are set to double over the next four decades.
The CEO of Aged and Community Services Australia (ACSA), Greg Mundy, said the advice came as no surprise to the sector.
“We have known that, irrespective of the short term budget position, there’s a long term pressure on the budget as a result of the increasing numbers of older people needing care,” he said.
“The idea of looking towards a different mix of taxpayer funded and user payments has been on the table for some time.
“We have been saying that in our response to the health and hospital reform commission and in our submission to the Productivity Commission inquiry.”
Mr Mundy said it was crucial that user pay options for aged care are discussed and debated.
“There will be continued budget pressure from aged care regardless of whether consumers are able to contribute more to the cost of care but this could alleviate that budgetary pressure.,” he said.
Aged Care Association Australia (ACAA) has recommended a number of alternative funding options in its submission to the Productivity Commission’s aged care inquiry, including long term care insurance or long term saving accounts.
“It’s all very good for us to be maximising client choice,” said the association’s CEO, Rod Young.
“But that is only exercisable if the range of options have choice attached to them and the individual has the resources to procure them.
The finance department also advised Senator Wong that the government should consider the funding for care and accommodation in residential aged care.
Mr Young said clients and providers would benefit if these costs were ‘unbundled’.
“There are some obvious benefits from being far more explicit about what the client is purchasing, what they are entitled to and what we are obliged to provide, particularly in those areas where more choice can be accessed such as hotel and accommodation services,” he said.
