May 03, 2023

Government commissions advice for aged care financial overhaul

fed gov commissioned consultancy
The Federal Government is seeking policy ­research on consumer contributions to aged care. [Source: Shutterstock]

The Federal Government has commissioned consultancy advice on what could be an overhaul of the nation’s aged care financial model which would see wealthy Australians pay more for some services.

The Government has allegedly commissioned consultancy firm, Kantar Public Australia, to undertake policy ­research on consumer contributions to aged care and gauge ­sentiment towards an increase in user co-payments.

This solution to the aged care crisis has been a hot topic for a number of months, with accountants and aged care stakeholders backing the idea of wealthier aged care clients paying a higher daily rate.

This follows the Federal Government’s announcement last week that it was seeking to form a new model of regulating the aged care industry as the sector screams it isn’t equipped to implement new regulations that were due to come into effect in the next few months.

After multiple providers announced they would be closing their doors because they lacked resources to enforce the new reforms, the Government released a second consultation paper seeking feedback from those in the sector in order to guide the new Aged Care Act.

At Tuesday’s National Press Club, Health Minister Mark Butler confirmed the Government was looking to ensure a “sustainable mix” about who was funding aged care.

“We have to make sure we spend the money right, that we get … a sustainable mix about who is funding this,” he said. “That is something we are giving consideration to now.”

Next week’s Federal Budget is projected to reveal aged-care costs running to $29.6 billion this financial year to help reform the sector which has consistently been running at a loss.

Patricia Sparrow, Chief Executive for the Council on the Ageing (COTA), agreed that the current assessment criteria needed some refining to become fairer and more nuanced to assess aged care clients’ wealth.

“The asset test treats the primary residence the same whether you have a mansion in a high-income area or a modest family home in a lower-income area,” Ms Sparrow said.

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