At the end of February, the Royal Commission into Aged Care Quality and Safety handed down a final report containing 148 recommendations for a new Aged Care system.
One of the key recommendations of the report is for the universal government funding of clinical care needs in nursing homes. At present, aged care residents are asked to make a means-tested contribution towards the cost of this care whilst the “cost of ordinary living” in the nursing home (food, cleaning, utilities etc.) is covered by a fixed fee proportionate to the Age pension.
Under the proposed changes aged care residents would not pay for their clinical care but be asked to make a means-tested co-contribution, in addition to a basic fee proportionate to the Age pension, to their cost of ordinary living in the nursing home. Importantly this means-tested co-contribution would not be payable by recipients of income support payments from Centrelink or DVA.
Another notable feature of the report is the recommendation to phase out refundable accommodation deposits (RADs) by 1 July 2025 which some residents currently pay and which provide a major source of capital funding to aged care providers. In lieu of the RAD, residents would pay a daily accommodation payment to cover their accommodation costs, and an aged care accommodation capital facility would be created for aged care providers to fund expansion.
Perhaps the most controversial proposal made by the Royal Commissioners relates to how this new system is to be funded through the introduction of an “aged care improvement levy” equivalent to 1% of personal taxable income which if adopted is sure to test the public’s appetite for a better system.
After 24 months of Royal Commission hearings there is a public consensus that the aged care system is in need of improvement but what is uncertain is the willingness and ability of the public to pay the price required either through higher taxation or greater co-payments as the economy emerges from Covid-19.
Whenever governments make legislative changes there are always strategic opportunities and at Partners Wealth Group we will be watching closely for the Federal Government’s response, due by 31 May, as to which recommendations are legislated and importantly how the new system will be funded.
Partners Aged Care Advice is here help you find the best outcome.
Our team of experts are independent of the government and aged care facilities. They understand your concerns and have significant experience in working with people entering care and their families to provide smarter aged care solutions.
Contact Luke Andrews, Senior Financial Advisor today on 1800 333 143.
This newsletter contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider you financial situation and needs before making any decisions based on this information