The aged care royal commission is seeking feedback on a range of options for funding aged care drawn from Australian and international experience including a social insurance scheme and private insurance approaches including annuities and gap cover.

The consultation aims to inform a more detailed consideration of a smaller set of options and recommendations on the design of future funding arrangements in the commission’s final report.

The consultation paper Financing Aged Care was prepared by the Royal Commission into Aged Care Quality and Safety and released on Wednesday

It examines how aged care is funded in Australia and overseas and considers a range of options that have the potential to transform the way aged care is funded and delivered in Australia.

It also responds to the October 2019 Interim Report of the Royal Commission, which found the aged care system required fundamental reform and a significant injection of funding to achieve the quality and safety desired (read more here).

Royal Commissioners Tony Pagone and Lynelle Briggs

Royal Commissioners Tony Pagone and Lynelle Briggs are inviting submissions on the funding options to inform further investigations.

“Subject to the responses we receive, it is our intention to consider a smaller set of options in more detail and undertake further modelling to inform the recommendations we make in our Final Report,” the commissioners said.

“There will be a range of views on the questions we pose in this paper, and there will not always be simple solutions.

“This is, however, an important debate, and we encourage the Australian community to engage in this conversation in the interests of improving the quality and safety of care for older Australians,” Commissioners Pagone and Briggs said.

The options include some with minimal change to current arrangements.

In addition to seeking feedback on these, the paper asks to what extent aged care should be funded by the care recipient and by the state.

Currently, about 75 per cent of aged care funding comes from the Australian Government with the remainder as co-contributions from the user.

This funding has grown substantially over the past 60 years to around 1 per cent of Gross Domestic Product.

However, as highlighted in the commission’s research paper released in January, the proportion of GDP Australia spends on aged care is less than many other comparable countries (read more here).

Submissions should be emailed to  by close of business Tuesday 4 August 2020.

Access the paper here.

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1 Comment

  1. A lot of reporting saying to repair aged care a cash injection of up to 40 billion to repair aged care. Typically this is a confused and incorrect. To adequately fund residential care, the subject of the Royal Commission, is estimated to require around 2 billion per year. This money is urgently required as 75% of facilities are running at a loss. For the non believers please read the ACFA 8th report released in May 2020. Aged Care Funding Authority is a government body and clearly describes where and when funding was cut from care facilities.
    Facilities and their associations should be considering legal action to seek compensation for losses incurred by a very deliberate federal government attack because at this time there is absolutely no plan or deadline for the funding repair. Of course the balance of the reported 40 billion is to create thousands of new home care places. Whether they do or not increase home care a sustainable residential system will always be necessary for when home base care is unsuitable.

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