Catholic Health Australia (CHA) is calling on the Federal Government to include housing wealth in means testing and allow providers to set their own daily fees, meaning wealthier older Australians would pay more for some of their aged care services.
The conversation about aged care cost and questions about sustainability of the sector are ongoing, while most providers continue to operate under severe financial pressure, with 70% of residential aged care homes running at a loss in the third quarter of 2022.
The sector continues to have a steadily declining financial performance despite a wide range of aged care reforms and funding being put in place last year and it has been made clear that extra funding and long-term reform are the only options to fix it.
A huge injection of money is needed to ensure there are enough aged care services for all older Australians – but CHA has joined other economic experts in saying that not all of this should come from taxpayers when wealthy Australians who receive care can afford to contribute more.
CHA Chief Executive, Pat Garcia, said it was fair to charge wealthier older people more for their care.
With the median value of an Australian home averaging about $1 million and the outdated means test cap of under $200,000, Mr Garcia said the Government is turning a blind eye to a huge amount of money.
“Aged care homes are straining under the weight of inflation and COVID-19 costs while facing long-term financial headwinds as our nation ages,” he said.
“The sector needs huge investment and there are two places it could come from: Government coffers or increased user contributions from those who can afford to pay.
“Taxpayers already provide approximately 75% of funding for residential aged care, and this contribution has grown at roughly double the pace of consumer contributions over the last decade.
“If we are to continue to care for our 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 latest StewartBrown Aged Care Financial Performance Survey Sector Report backed the idea of wealthier older Australians paying more for their aged care accommodation and extra services.
About 65% of older people in aged care have significant assets and in the new system, those clients would be reassessed and be made to fully pay for accommodation and extra hotel-like services such as cleaning.
But advocates have said implementing this system would need to happen alongside the improvement of the quality of our aged care services.
Patricia Sparrow, Chief Executive for the Council on the Ageing (COTA), has long advocated for changing the current means test assessment criteria to fall in line with this system, but that it would also need to ensure every older person receives the same level of care and access to services, regardless of how much they contribute.
“Older Australians with the financial means to pay more for aged care should do so, but the quality of the care provided and the ability of older people to use the services they are paying for must be improved,” Ms Sparrow told Hello Leaders.
“Any changes to the current payment system must avoid creating a two-tier experience in the aged care system – as this will disproportionately impact lower-income Australians and their ability to access quality care.
“The Federal Government will need to continue to subsidise care for those who can’t afford to pay ensuring there is a strong safety net.”
It is not confirmed if this system will be implemented in the aged care sector, but those involved in lobbying for the change hope to hear from the Federal Government soon with their solution.