|Image source: Department of Health and Ageing|
The Government has adopted, in part, many of the PC’s recommendations. Its response, however, falls short of the significant overhaul for the financing of aged care recommended by the PC. Instead, the Government has opted to maintain current restrictions on the supply and allocation of aged care places. However, some of the anomalies within the system have been addressed; for example, the distinction between high and low care has been removed; bonds will be levied on all aged care residents; and all aged care homes will be able to charge for extra services (previously aged care facilities needed to apply for extra service status). The Government will also increase the number of residential and community care places and the subsidy for the accommodation costs for aged care (for residents who cannot meet their costs). Despite the PC recommendation, the family home remains exempt from any means test and asset calculations.
The increase in government spending has been countered by the introduction of fees for both residential and community care which are determined by means testing arrangements. This is consistent with principles articulated by the PC Report and the age well campaign (representing the majority of aged care providers in Australia), that individuals with the capacity to pay should do so.
Living Longer. Living Better – key measures
|•Staying at home|
$385.4 million (over 4 years)
$955.4 million (over 5 years)
|•Better health care connections|
$61.6 million (over 4 years)
$80.2 million (over 5 years)
$42.8 million (over 4 years)
$54.8 million (over 5 years)
$194.6 million (over 4 years)
$268.4 million (over 5 years)
$369.9 million (over 4 years)
$660.3 million (over 5 years)
•Older Australians from Diverse Backgrounds
$136.8 million (over 4 years)
$192.0 million (over 5 years)
$717.1 million (over 4 years)
$1188.9 million (over 5 years)
|•Building a system for the future|
$219.6 million (over 4 years)
$256.5 million (over 5 years)
|•Consumer support and research|
$29.1 million (over 4 years)
$39.8 million (over 5 years)
- To improve access to aged care services, a ‘Gateway’ will be created. The scope of the Gateway is unclear although it appears that the initial focus will be on the My Aged Care website and call centre. It is not known whether this will replace the new front end of the aged care system announced as part of last year’s Budget and the recently consolidated aged care information line.
- Three agencies will be established as part of the reforms: the Aged Care Financing Authority, the Aged Care Quality Agency and the Aged Care Reform Implementation Council.
- The Aged Care Financing Authority will be responsible for setting charges, including accommodation payments and bonds. It is important to note that the Authority will set the price of the provision of care and that the price will not necessarily reflect the cost of care. Claims that the aged care subsidy paid by the Government is inadequate are therefore likely to persist. To date, a benchmarking study of the costs of providing aged care in Australia has not been conducted.
- While there was in-principle support for the PC’s recommendation to improve access to rural and remote and Indigenous aged care services (recommendation 11.4), there is little in the package that specifically targets this. Around $20 million per annum has been allocated to improving the sustainability of these services, but it not clear what this funding is expected to deliver. Improving access to community care in regional and rural areas will likely remain a challenge.
- Older Australians who can afford to do so will contribute to the costs of their care. These costs will be capped on an annual ($25 000) and lifetime ($60 000) basis. Full pensioners will be exempt from these costs. Thresholds will be indexed annually in line with the aged care pension.
- No changes have been made to the Aged Care Approval Round (ACAR) process or to the Aged Care Planning Ratio, meaning that growth in the aged care sector will continue to be limited to the additional places prescribed by the Government and not necessarily according to the number of older Australians wanting to access an aged care package.
- A workforce compact between providers and unions will be developed by an independently chaired Advisory Group. Providers who are signatories to the compact will be paid additional funding through the Conditional Adjustment Payment (CAP) for having enterprise agreements in place which deliver higher wages. This is likely to result in inequity among aged care workers and exacerbate the difference in wages between aged care and hospital nurses.
Previous reform efforts in aged care have taken at least ten years to implement and the government has indicated that implementation of this package will take around the same time. While this package has injected some additional funding into the aged care sector, the structural issues (and subsequent challenges) of the aged care system, such as the rationing of supply, as highlighted by the PC and previously the Hogan Review (Review of Pricing Arrangements for Residential Aged Care, 2004), will continue. It remains to be seen whether the long-term plan articulated by the PC for an entitlement based approach—and supported by many in the aged care industry—will be realised.