Wealthy Australians should pay more for aged care, says CHA

Catholic Health Australia has renewed calls for wealthier Australians to contribute more toward their aged care.

The peak body representing Catholic providers of health, community and aged care services Catholic Health Australia has renewed calls for wealthier Australians to contribute more toward their aged care.

CHA chief executive officer Pat Garcia said financial reforms were urgently needed to prevent the sector from collapse.

Pat Garcia

“Aged care homes are straining under the weight of inflation and Covid-19 costs while facing long-term financial headwinds as our nation ages,” said Mr Garcia.

The sector is in dire need of investment and there are two sources where financial help could come from, said Mr Garcia: “Government coffers or increased user contributions from those that can afford to pay.”

Under the current system, when an older Australian is means tested for aged care services, the government considers their housing wealth only up to the value of $186,331.20.  

“Given the median value of an Australian home today is about $1 million, the outdated means test cap of under $200,000 means the government is turning a blind eye to a staggering amount of money,” said Mr Garcia.

According to modelling commissioned by CHA, the aged care sector needs a capital investment of $48 billion by 2030 to provide enough places for Australia’s ageing population.  

The investment should not be the responsibility of taxpayers only, says CHA “when wealthy Australians who receive care can afford to contribute more.”

In order to sustain the sector, CHA says the housing wealth cap needs to be increased while the cap on the Basic Daily Fee that aged care homes are allowed to charge should be removed.

The BDF is currently set at 85 per cent of the single person rate of the aged pension – a figure “not reflective of actual expenses,” says CHA (which represents 12 per cent of Australia’s aged care facilities).

“Asking users to contribute more not only makes logical sense, it has the support of the aged care sector,” said Mr Garcia. “If we are to continue to care for older Australians, then it is fair that we have to dig deep into our accumulated wealth now and not sheet the bill home to future generations.”

The home care sector also needs a restructure says CHA, to “create incentives for people to make meaningful choices about which level of care is right for them rather than simply selecting the option which provides the highest level of government subsidy.”

CHA’s call for greater user contributions to aged care comes off the back of another grim financial performance report for the sector.

Source: StewartBrown

The Aged Care Financial Performance Survey – based on data obtained from 1,182 facilities across Australia – shows 70 per cent of aged care homes operated at a loss from July-September 2022.

Dr Nicole Sutton

Speaking to Australian Ageing Agenda, Dr Nicole Sutton – of University of Technology Sydney’s Ageing Research Collaborative – said: “The long-term sustainability of aged care is a significant issue which is only becoming more pressing over time.”

While acknowledging that safety net provisions – such as means-testing and contribution caps – are important mechanisms that ensure those with low financial means can still access high quality, publicly funded aged care services, Dr Sutton told AAA: “Nonetheless, many older Australians have a high level of wealth, including in the value of their residence and other financial assets. One important change would be for consumers who have the capacity to pay to be required to make fair and equitable contributions to the cost of the services they need.”

It’s a position also held by provider peak the Aged & Community Care Providers Association. Writing in the upcoming edition of AAA magazine, ACCPA CEO Tom Symondson said: “The current low caps on consumer contributions and the exclusion of the family home from the asset test mean taxpayers are bearing the burden of funding those who could afford to pay more.”

He added: “At a time where our sector is barely keeping its head above water, we have to start a serious national conversation about the true cost of providing excellent care for our elders, and how to meet that cost.”

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Tags: ACCPA, Ageing Research Collaborative, catholic health australia, Dr Nicole Sutton, featured, Pat Garcia, Tom Symondson, UTS,

1 thought on “Wealthy Australians should pay more for aged care, says CHA

  1. How does Mr Garcia divine wealthy Australians? If his premise is that the house a person owns is now valued close to a million dollars ( the median value of an Australian home today may be about $1 million), does he think everyone in this situation tax payer or retired ex tax payer are wealthy Australians?

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