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

Meg on SMSFs: Clearing up confusion on the $3 million super tax

There seems to be more confusion than clarity about the mechanics of how the new $3 million super tax is supposed to work. Here is an attempt to answer some of the questions from my previous work on the issue. 

Welcome to Firstlinks Edition 566 with weekend update

Here are 10 rules for staying happy and sharp as we age, including socialise a lot, never retire, learn a demanding skill, practice gratitude, play video games (specific ones), and be sure to reminisce.

  • 27 June 2024

Australian housing is twice as expensive as the US

A new report suggests Australian housing is twice as expensive as that of the US and UK on a price-to-income basis. It also reveals that it’s cheaper to live in New York than most of our capital cities.

The catalyst for a LICs rebound

The discounts on listed investment vehicles are at historically wide levels. There are lots of reasons given, including size and liquidity, yet there's a better explanation for the discounts, and why a rebound may be near.

The iron law of building wealth

The best way to lose money in markets is to chase the latest stock fad. Conversely, the best way to build wealth is by pursuing a timeless investment strategy that won’t be swayed by short-term market gyrations.

How not to run out of money in retirement

The life expectancy tables used throughout the financial advice and retirement industry have issues and you need to prepare for the possibility of living a lot longer than you might have thought. Plan accordingly.

Latest Updates

Investment strategies

Investors are threading the eye of the needle

As investors cram into ever narrower areas of the market with increasingly high valuations, Martin Conlon from Schroders says that sensible investing has rarely been such an uncrowded trade.

Economy

New research shows diverging economic impacts of climate change

There is universal consensus that the Earth is experiencing climate change. Yet there is far more debate about how this will impact different economies across the globe. New research sheds more light on the winners and losers.

SMSF strategies

How super members can avoid missing out on tax deductions

Claiming a tax deduction for personal super contributions can end in disappointment if it isn't done correctly. Julie Steed looks at common pitfalls and what is required for a successful claim.

Investment strategies

AI is not an over-hyped fad – but a killer app might be years away

The AI investment trend looks set to continue for years but there is only room for a handful of long-term winners. Dr Kevin Hebner also warns regulators against strangling innovation in the sector before society reaps the benefits.

Retirement

Why certainty is so important in retirement

Retirement is a time of great excitement but it is also one of uncertainty. This is hardly surprising given the daunting move from receiving a steady outcome to relying on savings and investments.

Investment strategies

Have value investors been hindered by this quirk of accounting?

Investments in intangible assets are as crucial to many companies as investments in capital equipment. The different accounting treatment of these investments, however, weighs on reported earnings and could render ratios like P/E less useful for investors.

Economy

This vital yet "forgotten" indicator of inflation holds good news

Financial commentators seem to have forgotten the leading cause of inflation: growth in the supply of money. Warren Bird explains the link and explores where it suggests inflation is headed.

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.