Expert Dubs Aged Care’s New Support at Home Program ‘The Worst Features of the NDIS’

The government’s mid-year economic fiscal outlook (MYEFO) projects a saving of $18.88 billion through increased consumer charges in aged care, with providers expected to absorb the risk of bad debts.

Professor Kathy Eagar, who designed the AN-ACC funding model and has spent her career in the financing of aged care and sub-acute health, is uniquely positioned to critique these projections. As a former advisor to the Aged Care Royal Commission, her insights carry significant weight.

“The government proposes a massive increase in consumer charges, expecting providers to collect these payments,” she explains. “If consumers cannot pay, providers face the dilemma of delivering unfunded services or ceasing care altogether. This creates a significant financial strain and jeopardises service quality.”

Eagar stresses that the financial burden being placed on providers is unsustainable

 “Providers have always collected fees and managed some financial risks, but with the massive increase in consumer charges the new arrangements shift the entire burden onto them,” she says. This shift threatens the financial viability of many aged care services, particularly smaller, regional providers and community aged care providers who lack the reserves to absorb bad debts.

She further critiques the government’s assumption that older Australians can shoulder these increased costs. “There’s a perception that baby boomers are cashed up, but by the time they need aged care, most have depleted their resources,” she says.

Data supports her claim: only 13% of Australians aged 85 or older have over $100,000 in superannuation.

“The reality is that these savings projections are overly optimistic and likely unachievable,” Eagar warns. “If the revenue gaps become too large, some providers may reduce services or close entirely, further exacerbating the aged care crisis.”

Support at Home

The government’s proposed Support at Home program includes eight funding levels, but these packages are inclusive of significant consumer contributions, explains Professor Kathy Eagar.

“When they say the top package is worth $78,000, that amount includes the consumer’s sizeable contribution – it’s not additional,” she clarifies.

For independence services like personal care, self-funded retirees could be expected to contribute up to 50% of the cost. For everyday living services such as domestic assistance, self-funded retirees can expect to contribute a massive 80% of the cost.

“You’re talking about people potentially paying $30,000 or more a year in some cases,” she says, adding, “many won’t be able to afford it.”

This financial burden shifts risks to providers, who must collect these payments. “If consumers can’t pay, providers face the choice of delivering services with no funding, reduced funding, or stopping them altogether,” Eagar warns. She predicts this will lead to a rise in the cash economy, with individuals hiring unregulated workers for tasks like housekeeping, further compromising care quality.

Additionally, the limited hours of support under these packages—a maximum of about 17 hours per week—are insufficient for older Australians with complex needs.

Eagar emphasises that caring for a loved one is often unsustainable without external help, as the person caring for them at home, typically their husband or wife or a child, just burns out until they can’t do it anymore.

She notes that providing robust support for carers could significantly extend the time individuals remain at home, but “there is nothing in the whole new reform package that substantially increases support for carers.”

Eagar also critiques the program’s assessment process, which she sees as inefficient and potentially harmful. “When a person gets referred for assessment, they need someone to see them straight away, not be put on a waiting list for months.”

Citing the Veterans’ Home Care model, where assessments are completed within three working days, she contrasts it with delays in the new program, stating, “Things break down at home while people are waiting for months.”

Despite the government’s assumption that these packages will reduce residential care demand, Eagar feels that they will actually have the opposite effect. “People don’t see residential care as a lifestyle choice. I actually expect demand to increase,” she concludes.

Increased Burden on Public Hospitals

Professor Kathy Eagar warns that the current aged care reforms could lead to a significant strain on public hospitals, with frail older people unable to secure residential care beds.

She notes, “In my region, for the whole of the winter we’ve just gone through, 20% of all public hospital beds were occupied by people awaiting nursing home places.”

This situation, she argues, underscores the need for changes in the Commonwealth-state health reform agreement, due for renewal in 2025. “The states and territories need to be negotiating a special clause in that agreement about funding… to actually cover the full costs of care for people approved for residential care who are sitting in public hospital beds.”

Eagar highlights a major flaw in the government’s approach: “If the Commonwealth is not providing enough residential aged care beds, then they have to fund the additional costs that the states and territories will be incurring.”

She also critiques the financial barriers imposed by the reforms, reporting that “consumer charges are so high that a lot of people are refusing placement and staying in public hospital beds.”

While there is a lifetime cap on consumer contributions, the lifetime cap applies only to what the government refers to as Non-Clinical Care. There is no lifetime cap on accommodation. Self-funded retirees will typically pay $127,000 a year in residential care, with half of that in Daily Accommodation Payments.

Eagar calls for realistic measures, stating that the issue is not just about formulas or projections but about addressing the real-world impact on vulnerable Australians and the healthcare system.

Flaws in Government’s Financial Projections

Serious concerns have been raised about the government’s financial projections for aged care reform, with questions surrounding their plausibility.

Professor Kathy Eagar argues that the projected savings of $18.8 billion are unlikely to be realised.

“I don’t believe the government will achieve the savings that they’re quoting, but they will try and transfer the financial risk for shortfalls onto providers” she predicts, adding that this will likely lead to providers requesting increased government funding in the future.

Eagar points out a critical flaw in the calculations, suggesting that they may be based on data for people aged 65 and over, rather than those aged 80 and older who are most likely to require care.

“People in the early years of retirement, from 65 to 75, are more likely now to have pretty good superannuation nest eggs… but that’s not the case for many older Australians.”

She also highlights the impact of the family home exemption from the assets test, noting that many people over 85 have limited financial resources aside from their homes, which further undermines the government’s projections.

Additionally, Eagar asserts that aged care will never be a competitive market when “80% of the costs will still be met by government.

“She believes the reforms aim to transfer financial risk from the government to providers and consumers, stating, “If a consumer is at home and not getting their needs met… the response will be, ‘It’s your fault; you chose the wrong sort of care.’”

Another Missed Opportunity

When posed the question ‘what transformative change you would have made to aged care funding if given the chance,’ Eagar was swift and adamant in her reply.

“I would position aged care with Medicare,” she says, proposing that aged care should be treated as a public entitlement, much like the healthcare system.

She suggests that everyone contribute to aged care in proportion to their means, much like the Medicare levy, with an aged care levy which would start at age 40 or 45. “We all contribute to Medicare from the day we start working, and I think it’s politically palatable to introduce an aged care levy halfway through your working life.”

This approach would position aged care as a publicly funded and regulated system, similar to how Medicare is viewed today. “Medicare isn’t just public hospitals… it’s private doctors, private specialists, non-government organizations,” she explains.

This model doesn’t focus on the type of provider but on where the money comes from. “We should be positioning aged care exactly like Medicare,” she adds, with co-payments included, just as with Medicare’s pharmacy and doctor’s contributions.

By shifting the narrative from a private, for-profit industry to a public entitlement, she believes aged care could be embraced as an essential public service.

Future Forecast

Professor Kathy Eagar offers a stark critique of the government’s approach to aged care reform, describing it as “lazy” and just “more of the same.”

As the baby boomer generation enters old age, the need for innovative solutions is becoming ever more urgent. Yet, as Eagar points out, these reforms do little to address the looming challenges, merely shifting more financial responsibility onto consumers while maintaining the same outdated care models.

“Put simply, the new Support at Home program is based on all the worst features of the NDIS applied to aged care. It’s an NDIS for old people, except they have to pay a lot of money for it.”