Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 409

$17.7 billion aged care plan welcome but many will miss out

On Tuesday, 11 May while all eyes were on the Federal Budget, the Government released its response to the Final Report of the Royal Commission into Aged Care Quality and Safety.

The report details the response to the 148 recommendations of the commissioners in the form of a three-phase, five-year, five-pillar plan. The government has accepted (or accepted in principle) 126 of the recommendations, with the remaining recommendations subject to further consideration and six not accepted at all.

Importantly the plan also details how the investment of the $17.7 billion announced in the budget will be spent.

Among the six recommendations rejected is an aged care levy to fund the system and changes to the means testing arrangements that would have seen pensioners have their accommodation and cost of living met by the government. The recommendation to phase out lump sum Refundable Accommodation Deposits (RADs) is subject to further consideration and will form part of the reformed Residential Aged Care Accommodation framework which will also look at changes to accommodation design standards.

The big tickets in aged care

The big ticket items in the five-year plan include $6.5 billion for an additional 80,000 home care packages over the coming two years, almost $800 million to support 1.6 million informal carers through respite and payments, $3.9 billion to increase the care residents of aged care homes receive to 200 minutes per day including 40 minutes with a registered nurse.

In a move that will likely shake up the industry, $102 million will be spent on placing residential aged care places in the hands of senior Australians instead of residential aged care homes. There is also $200 million for a star rating system to better inform senior Australians and their families.

The need to attract and train aged care workers has seen the Government commit $652 million into the aged care workforce and tougher governance of the industry has seen the government provide $698 million.

Sadly, Recommendation 25 from the Final Report, which was set to revolutionise aged care through a single assessment and funding programme incorporating all home care and residential aged care services, providing funding based on the individual’s needs with flexibility and choice across providers was accepted in principle only.

In their response, the Government said that a new home care programme “will be designed to better target services to eligible senior Australians” and that “Senior Australians will also have more control and flexibility to select a residential aged care provider of their choice”.

Not available to all

This indicates there will be improvements to how the system operates, the level of choice and transparency and the amount of services that will be available for senior Australians. But unlike Medicare or the NDIS, aged care will still be a rationed system.

It’s hard not to be excited about a $17.7 billion plan for aged care but my excitement is tempered by the knowledge that the system that will provide greater choice, transparency and care for many will still see some senior Australians miss out. In his opening remarks Treasurer Josh Frydenberg referred to “Team Australia”, it would be great if “Team Australia” adopted the motto to “leave no senior Australian behind”.

 

Rachel Lane is the Principal of Aged Care Gurus where she oversees a national network of adviser dedicated to providing quality advice on retirement living and aged care. She is also the co-author of a number of books with Noel Whittaker including the best-seller “Aged Care, Who Cares?” and their most recent book “Downsizing Made Simple”. To find an adviser or buy a book visit www.agedcaregurus.com.au.

 

4 Comments
Name withheld
May 26, 2021

I am 68 years old. I am in remission from pancreatic cancer and Hodgkin lymphoma. I have an investment property. I get $550 per week from that property. I am not eligible for disability pension or pension card. My medical bills are high. My wife is force to keep on working because there is not enough money to pay the household bills and maintain a reasonable lifestyle. She gets $75k gross per annum. She applied for carer's allowance. It was rejected. She is 62 years of age. I have to care for myself. It is tough at times. Please advise.

Graham Hand
May 27, 2021

Hi, if you would like Rachel to refer you to an aged care specialist adviser, please drop us a line and we will forward your request to her. Firstlinks is not licensed for personal advice.

Peter Bayley
May 26, 2021

A close reading of the government's announcements and response to the Royal Commission will reveal some 'smoke & mirrors'. A substantial slice of the $17B will go into bureaucracy (three new bureaucratic structures) and compliance. With 60% of residential aged care operators presently losing money the additional money will help but the extent of additional micromanagement complaince is mind boggling. Talented managers are leaving the industry as they are fed up with bureaucratic rules and rigid and aggressive accreditation assessments. Aged care is now regulated more than hospitals.

asdf
May 28, 2021

Agree, I work in the industry. The micromanagement and compliance is costing at least 30% of any funding put in to Home care packages. eg. Fund holding 15% ; care planning 15% ; mark up on service provision 50%

 

Leave a Comment:


RELATED ARTICLES

What the Federal Budget means for you

We need hard conversations about frailty planning

Budget cash splash will do more harm than good

banner

Most viewed in recent weeks

Vale Graham Hand

It’s with heavy hearts that we announce Firstlinks’ co-founder and former Managing Editor, Graham Hand, has died aged 66. Graham was a legendary figure in the finance industry and here are three tributes to him.

The nuts and bolts of family trusts

There are well over 800,000 family trusts in Australia, controlling more than $3 trillion of assets. Here's a guide on whether a family trust may have a place in your individual investment strategy.

Welcome to Firstlinks Edition 583 with weekend update

Investing guru Howard Marks says he had two epiphanies while visiting Australia recently: the two major asset classes aren’t what you think they are, and one key decision matters above all else when building portfolios.

  • 24 October 2024

Warren Buffett is preparing for a bear market. Should you?

Berkshire Hathaway’s third quarter earnings update reveals Buffett is selling stocks and building record cash reserves. Here’s a look at his track record in calling market tops and whether you should follow his lead and dial down risk.

Preserving wealth through generations is hard

How have so many wealthy families through history managed to squander their fortunes? This looks at the lessons from these families and offers several solutions to making and keeping money over the long-term.

A big win for bank customers against scammers

A recent ruling from The Australian Financial Complaints Authority may herald a new era for financial scams. For the first time, a bank is being forced to reimburse a customer for the amount they were scammed.

Latest Updates

Shares

Looking beyond banks for dividend income

The Big Four banks have had an extraordinary run and it’s left income investors with a conundrum: to stick with them even though they now offer relatively low dividend yields and limited growth prospects or to look elsewhere.

Exchange traded products

AFIC on its record discount, passive investing and pricey stocks

A triple headwind has seen Australia's biggest LIC swing to a 10% discount and scuppered its relative performance. Management was bullish in an interview with Firstlinks, but is the discount ever likely to close?

Superannuation

Hidden fees are a super problem

Most Australians don’t realise they are being charged up to six different types of fees on their superannuation. These fees can be opaque and hard to compare across different funds and investment options.

Shares

ASX large cap outlook for 2025

Economic growth in Australia looks to have bottomed, which means it makes sense to selectively add to cyclical exposures on the ASX in addition to key thematics like decarbonisation and technological change.

Property

Taking advantage of the property cycle

Understanding the property cycle can be a useful tool to make informed decisions and stay focused on long-term goals. This looks at where we are in the commercial property cycle and the potential opportunities for investors.

Investment strategies

Is this bedrock of financial theory a mirage?

The concept of an 'equity risk premium' has driven asset allocation decisions for decades. A revamped study suggests it was a relatively short-lived phenomenon rather than the mainstay many thought.

Vale Graham Hand

It’s with heavy hearts that we announce Firstlinks’ co-founder and former Managing Editor, Graham Hand, has died aged 66. Graham was a legendary figure in the finance industry and here are three tributes to him.

Sponsors

Alliances

© 2024 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.