New data from the Australian Seniors 2021 Mindset Shift survey has revealed just how Australians over 50 years old feel about aged care following the revelations and challenges of the last 12 months.
According to the data, 43% of surveyed people over 50 said the pandemic changed their perspective on aged care, and a whopping 80% said they were worried they hadn’t saved enough for their retirement. On top of that, one quarter of respondents said they struggled to pay their bills, and 10% said they’d delay retirement following COVID-19.
For many, the cost of aged care and life after retirement snuck up on them. Suddenly they were faced with extra costs and financial responsibilities that they spent much of our lives thinking of as “in the future”.
The cost of aged care varies from person to person, and is mostly based on the level of care required and means testing of the person entering care. Costs also change based on the individual’s choice of care provider and what services they need.
The average daily cost of care is around $50 per day, which works out at roughly $20,000 per year. This daily fee pays for everyday care, like meals, laundry and cleaning. Additional to this, there is a means tested care fee, which can be anywhere up to around $250 per day.
Furthermore, the resident is also expected to pay for their room, if they can afford it. This is paid either in a lump sum, which is refunded once the room is vacated, or through daily payments – or a combination of both.
“And that potentially is one of the reasons why people are reluctant to draw down on more capital in retirement, because they fear that they might get sick, or they might need to go to aged care. And they don’t understand, because the systems are complex, just the extent to which they can rely on the government to help them with that.”
“We all know there’s going to have to be substantial increase in funding in aged care – very substantial increase in funding,” Mr Callaghan said.
“But it’s not just funding, of course. People want to see better quality in how those funds are being used.”
Increased funding, and increased accessibility of aged care in Australia, is not a new topic. In September of last year, former Prime Minister Paul Keating proposed a HECS-style funding system for aged care to the Royal Commission. Within this post-paid system, the government would advance loans to older people looking to enter aged care, and would help alleviate pressure on waitlists.
Under Mr Keating’s proposal, if the person receiving the loan was unable to pay for it, or their estate didn’t have the finances, the Commonwealth would pay for their care.
“In other words, it’s a contingent loan just like HECS. Like in a HECS loan, if a young person gets a degree and then never works, the loan is not repayable. The same would happen with aged care,” Mr Keating explained at the time.
What do you think about the growing number of older Australians possibly not being in a financial position to afford aged care? Share your thoughts with us.