How To Fund Aged Care

The Royal Commission into Aged Care & Safety is presently looking at how to fund the future of aged care. With an increasingly ageing population as baby boomers advance in age the demand is set to grow.

Former Treasurer Mr Keating

proposed a scheme similar to the HECS scheme he introduced as Treasurer for university pupils, whereby the government provides a loan to cover university fees, to be repaid at a later date when the pupil graduates and earns the threshold income. In the case of a person needing aged care he proposes the commonwealth government provide a loan which covers costs for home care support or moving to an aged care facility. This loan would only be repaid from the recipient’s estate upon their death. Mr. Keating stated that this scheme would help reduce the long wait times for the elderly waiting on home care support.

Former Treasurer Mr. Costello

told the inquiry that income and assets tests should be part of future funding arrangements, but need to be simplified. He admitted he had trouble filling out aged care forms for his family.

“You all ought to do them you know, I think there are over 120 questions and 27 pages — I had a lot of trouble filling it in,” he said.

As a Placement Consultant,http://www.oasisagedcaresolutions.com.au/about.html assisting my clients to find suitable aged care accommodation, I find many have the same trouble filling in the forms. As part of the service I provide I fill in the forms for my clients when they are applying for a place in an aged care facility. My clients and their families are very grateful for this assistance.

Treasury secretary, Ken Henry

also addressed the inquiry,expressing similar sentiments.

“The system overall is horribly complex and it contains a very high level of uncertainty for people who are elderly, people who are vulnerable, people who are suffering emotional and psychological stress … and they’re bewildered” he said.

He stated he had long felt the system was underfunded, unsustainable and under resourced and that the baby boomers would not stand for it. He suggested a special levy earmarked to cover the expected increase in demand for aged care leading up to the peak in 2030.

The Association of Aged Service Professionals (AASP)

https://www.aasp.org.au/home/

also made a written submission to the Royal Commission. Their submission was specifically in relation to the MPIR, the Maximum Permissible Interest Rate that can be applied as a daily converted amount (Daily Accommodation Payment – DAP) in relation to the advertised/negotiated cost of accommodation. With the fall in interest rates this amount has reduced from 6.69% in 2014 to 4.89% as at 30th June, 2020. With many residents now deciding to pay daily, the effective reduction in cash flow to facilities is becoming significant.

The Association recommended that the Minister, in order to ensure the viability of the sector, use his authority to review a revision to the current method of calculating the MPIR.

Counsel Assisting

Arising from consultations, has recommended the appointment of an independent “Aged Care Pricing Authority”, responsible for care and other costs.

I am President of the AASP and fully support their submission. I sincerely hope to see effective changes to the current funding arrangements arise from the enquiry. All Australians deserve to be assured of quality and timely aged care support in their later years.

Jillian Slade Consultant in Aged Care Placement

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