Aged care sector wants to tap into homeowners’ wealth

Major aged care provider lobbies government for review of means-tested fees.

wealthy homeowner

Older Australians who own their home are more than 20 times better off than those who rent, according to data from the Australian Bureau of Statistics (ABS), and a major aged care provider wants to tap into that ‘wealth’.

As Treasury considers submissions to its retirement income review, Catholic Health Australia (CHA) chief executive Pat Garcia says the federal government should force these ‘wealthy’ older Australians to pay more for aged care services – especially those living in multimillion-dollar homes in Sydney and Melbourne.

“Many Australians are sitting on a huge financial resource,” Mr Garcia told The Age. “It’s only logical and fair that people who have access to millions of dollars tied up in their home should be paying more for their aged care.”

Government subsidies for aged care and home care are means tested, but only the first $169,079 of the value of a person’s home is taken into account. Research conducted by the Australian National University (ANU) shows that about 242,000 pensioners are outright owners of properties worth more than $1 million.

Mr Garcia says a “fairer” model would be one where wealthier Australians have the full value of their home taken into account, as recommended by former public servant David Tune in his 2017 review and as proposed in some quarters in relation to assets tests for the Age Pension.

The government has, however, ruled out that possibility in its current review.

Mr Garcia believes the CHA submission would “bring a huge amount of money into the aged care system” and free up federal funds for those who were less financially secure. It wants caps on fees to be abolished, with daily fees of more than $100 to be approved by the aged care pricing commissioner.

 

“The funding model for aged care is so broken that nearly half of [aged care] homes are operating at a loss and staff are chronically underpaid,” he says.

“[But] if we expect people to pay more, we have to deliver much better care,” he says, acknowledging the aged care royal commission interim report that detailed widespread abuse and neglect in the sector.

“We need to find better ways of unlocking private wealth.”

In 2017-18, the ABS found that property-owning households – where at least one of the occupants was at least 65 – had a median net worth of $960,000. Similar households paying off a mortgage had a median net worth of $934,900.

But similar households that rented had a median net worth of just $40,800.

Nicki Hutley, partner at Deloitte Access Economics, told the ABC’s 7.30 that Australia is in danger of creating a separate class that will not reap the many benefits that come with home ownership.

“Are we allowing one class of Australians to build for their retirement more easily than another class of Australians? The answer to that is unequivocally yes,” she says.

What is your view of the Catholic Health Australia submission on aged care fees? Should older homeowners’ ‘wealth’ be unlocked to benefit that sector?

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COMMENTS

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Rae
10th Feb 2020
6:27pm
Catholic Church after the wealth again. Nothing changes through the centuries.

It's easy to see why the young are spending, renting in nicer suburbs and living well. They can see how pointless working decades for privateers to rob them when they are old.
Mariner
11th Feb 2020
3:56pm
Sure Rae, it's a no brainer as the advert says. Have done a 5 week cruise in the south of Australia over Christmas and I am now in Melbourne City for 10 days. We spend the money while we can and so should everybody else while still able to do so. Certainly would not go thru the turmoil of saving for our own place with interest rates at 16% - we were fools! The young ones won't be.
tams
11th Feb 2020
10:27am
Aged care is already means tested.
For example, a resident entering care will have an annual means tested care fee of $27,000 per annum and a life time fee capped at $67,000. Whether that person be a home owner with a $1.0m home and no other assets, or some body like Lindsay Fox who may have more than $800m (sorry Lindsay)
Does that seem fair.

This is what Cathoilic Health is getting at
Sundays
11th Feb 2020
11:41am
Right now, someone like Lindsay Fox would not meet the income and asset test. He would have to pay for his full costs in aged care and not be subject to the means test. He can afford it.

However, if an ordinary Pensioner couple had the full value of their home included in the means test, then they could find age care fees use up all their money. Does that seem fair? Why would you buy a house?
Sundays
11th Feb 2020
11:43am
Use up all the money after they are forced to sell the family home that is
day dreamer
11th Feb 2020
11:46am
Does the lifetime cap of care fee applies to self funded retirees? Does this applies to private aged care facilities?
Thank you.
Anonymous
11th Feb 2020
3:09pm
My money from the sale of my house will simply disappear.
Triss
11th Feb 2020
3:10pm
Marvellous, isn't it, "a resident entering care will have an annual means tested care fee of $27,000 per annum" but a prisoner entering prison care pays nothing in return for three meals a day plus snacks and health care including dental care. All those services seem to be higher quality than the ones people in care homes get...and they havn't committed any crimes.
Fliss
11th Feb 2020
3:22pm
day dreamer . . . . to answer your question, no it does not.
My father is a pensioner & is in a private aged care facility.
He pays $106 per day. This made up of Care fees, extra services fees & means tested fees.
So his fees are just over $3000 each month.
Anonymous
11th Feb 2020
4:03pm
Gee one could live on a cruise ship for the same price if not cheaper with much better food and resources.
tams
11th Feb 2020
10:27am
Aged care is already means tested.
For example, a resident entering care will have an annual means tested care fee of $27,000 per annum and a life time fee capped at $67,000. Whether that person be a home owner with a $1.0m home and no other assets, or some body like Lindsay Fox who may have more than $800m (sorry Lindsay)
Does that seem fair.

This is what Cathoilic Health is getting at
Arvo
11th Feb 2020
10:29am
The Catholic Church organization is one of the richest on Earth. In Australia it is a registered Charity tax exempt. While I agree that wealthy should unlock their assets to support the cost of health care so should the Catholic Church, otherwise remove its charity status and bring them into the fold of paying tax.
geordie
11th Feb 2020
7:01pm
Got your back on that one Arvo.
Horace Cope
11th Feb 2020
10:52am
This is divisive and is against everything that Australians stand for. One of our many strengths is the "Jack is as good as his Master" principle and to start separating people by wealth is anathema to most Australians.
Anonymous
11th Feb 2020
1:20pm
Quite right, divisive and nasty - Garcia should be told to go to hell!
AutumnOz
11th Feb 2020
11:16am
How come the report doesn't mention that home owners are slugged between $400.000 and over $1,000,000 when entering aged care?
Nor does it mention that a lot of pensioner couples bought their home over 50 years ago, for about $15,000, and it has now climbed the ladder to over $1,000,000 without them doing anything except live in that house.
We are really sick of being ripped off merely because we bought a house and also saved some money for our retirement.
Triss
11th Feb 2020
3:20pm
I agree with you, AutumnOz, it seems that our seat warmers in government can't be bothered to do a spot of research and work out something a bit fairer. Why means testing? You don't get means tested before you go into a hospital or a hotel.
Mariner
11th Feb 2020
4:05pm
Looking back we should have bought gold and hidden it, those days it was no problem buying it.
Keep renting and crying poor and access all possible social services. I know some of these people and now
I feel a fool.
Oldchick
11th Feb 2020
11:16am
So working toward owning your own home becomes a liability? How many people are living in Government housing because it suits them to. Low rent, no maintenance costs, no council rates, no house insurance......? I personally know a few and that’s just how they like it. Sure, some aren’t so lucky and are paying high rent but why penalise those who have worked hard to get their own home, maintained it, gone without for years to pay off the mortgage, etc.? Let some of these church groups sell off their assets, the Catholics and Salvo’s for starters have immeasurable wealth worldwide yet we still have people living on the streets or in their cars. Who is helping who?
Mariner
11th Feb 2020
4:08pm
No argument about that one, Oldchick. Places look quite nice and I could quite easily live in them.
The Sheriff
11th Feb 2020
11:54am
Pat Garcia can shove his unsolicited opinion right up where the sun does not shine.
Anonymous
11th Feb 2020
1:23pm
That should be the collective response from YLC members to Garcia.
Also, does he lack reading or comprehension skills? The Govt already ruled out that possibility (of targeting homes) in its current review before it started.
BillF2
11th Feb 2020
12:13pm
It's funny how the Catholic church, which is supposed to believe in God and His power to help overcome life's difficulties, prefers to push the federal government to screw more money out of the population. 'Leech' is the first word that springs to mind. Bricks and mortar, even though a crude measure of wealth, are not a liquid asset, so to turn it into one, the government will have to enact even more draconian measures to take what is not legally theirs.. The question that arises from the obvious money grab by CHA, is whether the church prefers a totalitarian state to a democratic and free society, because its greed is pushing us in that direction.
Nicki Hutley, on the 7.30 Report was commenting on the cost of housing, not aged care services. She was correct. The cost of property and housing in Australia is obscene. Who sets the prices, and who benefits from it? Certainly not the average citizen. Answer that one, and you'll see why Australia is in the state it is.
Fliss
11th Feb 2020
12:25pm
“ Mr Garcia believes the CHA submission would “bring a huge amount of money into the aged care system” and free up federal funds for those who were less financially secure. It wants caps on fees to be abolished, with daily fees of more than $100 to be approved by the aged care pricing commissioner.”
Daily fees of more than $100 to be approved??? My Dad currently pays over $100 per day in his aged care facility.
Fliss
11th Feb 2020
2:07pm
I just checked in case I was incorrect - but no, am correct.
Daily fees total is $106.83 per day. (Daily Care Fee + Extra Services Fee + Means Tested Fee). That on top of paying RAD in full.
Robbo1
11th Feb 2020
12:58pm
The Catholic Church should shut up and mind their own business.

Religious bodies and aid organisations, who are raking in millions; should be forced to pay tax. This will boost government coffers.
Triss
11th Feb 2020
3:24pm
That's the trouble with having pious, bible bashers in government.
inquisitive
11th Feb 2020
1:03pm
I think that Mr Garcia has socialist tendencies.While I personally am definitely in the millionaire catagory that he is targeting, I don't think that it would be fair to expect those who to be forced to support those more unfortunate.He is just hoping that this may bring his organisation a nice windfall
Mariner
11th Feb 2020
4:13pm
With a name like that he possibly hails from Cuba or Venezuela, socialist paradises where one wants to get old in.
Hairy
11th Feb 2020
1:08pm
Unbelievable coming from non tax paying richest entity in the world.also some of the poorest are the biggest followers,Catholic Church should be putting their hands in the trillions and serving the very people they have been ripping of for hundreds of years.we don’t need you to rip us off our pollies can handle all the pensioner bashing and discrimination quite well Thankyou.
Virginia
11th Feb 2020
2:07pm
No I can't help that my suburb has become popular!!!
What we do need is Jobs. Workers are selling themselves out of the job market with huge wages. Somehow there has to be an option for someone to get paid less rather then be on the jobless ladder with all the mental health and self worth issues. Sometimes it is better to be employed even if on a low wage
With all the self checkouts and and self service we are all doing the worst thing for mental health .
!. Elderly find paying bills on line so difficult - Reality
2. Kids like pocket money and skills learnt in checkout etc
3 You are creating a double class There will be thousands out of work with the retail
sector.
4. All that spending on new clothes to end up after one wear in the rubbish creates climate
change.
5. All the electrical stuff and IT stuff only built to last 4 years at max ---Climate change.
6. WE NEED A HUGE SHIFT!!!!!!!!!!!!
Anonymous
11th Feb 2020
3:08pm
A lifetime now means only as long as the company making the product will support it.
Mariner
11th Feb 2020
4:19pm
Now that my suburb has not become popular, do I need to worry? Maybe not, as I am too old to wait for a turn again, but then I seem to be blessed. Of course, a difference of a few hundred thousands.
GrayComputing
11th Feb 2020
2:17pm
NO ASSET TEST FOR A PENSION EVER AGAIN!
What our founding fathers said in parliament in 1908:
Quote:_____

We wish to honour the sentiments of the legislators who introduced the Age Pension in Parliament in 1908. When it became law, it was commended with the following words: “… it removes the idea of old-age pensions from any suggestion of a charitable allowance. An old man, who has done his duty as a citizen for 25 years (is) as much entitled to a pension as a commander-in-chief or a chief justice.”
End Quote: _____

The pension was a reward for service. It should still be considered in this light. It is not a handout.

Therefore, a pension is not welfare.

But modern politicians have stuffed it up completely

It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

Help scrap it now. Become a hero.

Even the UK and poorer New Zealand has a NO ASSET pension, so it is cheaper and user friendly.

Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be hassled by their crazed robo-debt scam and then waste even more time in the 3 million people waiting queues and more lost calls?

We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

Ask your MP do they really like being part of the system that allows this indirect abuse of the elderly?

This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?
Triss
11th Feb 2020
5:55pm
"Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be hassled by their crazed robo-debt scam."

That's the modern day equivalent of being forced to bow and scrape and touch your forelock. A way of saying 'we're the elite and you Centrelink customers are nobodies'.
geordie
11th Feb 2020
7:06pm
I'll never get sick of reading your posts Gray. Keep them comming. I agree whole heartedly with your sentiments mate.

11th Feb 2020
2:20pm
No one should be required to pay any more than the actual cost of providing the aged care required no matter what wealth they have. The wealthy would simply provide their own instead.
Waiting to retire at 70
11th Feb 2020
2:38pm
I worked hard for over 50 years to bring up a family, support my community and pay off my mortgage.

During the whole of that time I paid my taxes, obeyed the law and never once considered 'kiddie fidling' a legitimate godly act.

Now the Catholic Church:
- who have NEVER paid one cent of tax in this country since it arrived here over 200 years ago;
- whom have demonstrated a willingness to break any law of the land it so chooses; and
- who have KNOWN AND TOLERATED the abuse of our communities children for centuries,
say that my house is not mine anymore and should be available to them to plunder at its will.

What I say is PAY YOUR FECKIN' TAXES, OBEY THE LAWS OF THIS COMMUNITY, AND LEAVE OUR KIDS ALONE.

Some say 'shame on you', I don't.

My home is NOT yours and wish "a plague on your house".
Hardworker
11th Feb 2020
3:20pm
It is clear from the comments here that most people have had quite enough of the Catholic church and its interfering. The problem is they have always had far too much influence in a whole range of areas and this needs to stop. Even with their enormous tax free wealth their own facilities have been found to be some of the worst. They need to fix their own problems first before they start suggesting that people who have planned ahead, worked hard, saved, gone without and not boozed all their money, should have their homes assessed in order to pay more, not only for their own aged care, but everyone else's as well. A lot of the young are not giving any thought to the future that's why they are spending money on useless things like drugs and covering their bodies in expensive coloured tattoos and piercings. They can't even see themselves ever owning a roof over their heads let alone worrying about how they are going to fund their own aged care.
Oldman Roo
11th Feb 2020
3:22pm
Why has the Catholic church never told those whose lifestyle of boozing , partying and squandering their money . to get off their behinds and do like the responsible who work hard and save for their old age ? They say instead " God will provide " and in the end it is not God who provides but the fools who worked hard and now get squeezed by the Church .
Mariner
11th Feb 2020
4:28pm
The Church also told them to keep breeding so they never could afford anything; so the people having not followed the dictum have something worth taking away from. Sell the Vatican and all its treasures and give the proceeds to the needy. Possibly more wealth there in the quarter of a square mile country than in the whole of Australia.
Priscilla
11th Feb 2020
4:04pm
Maybe people should stop buying houses and just rent, then everything will just be given to them!
Mariner
11th Feb 2020
4:23pm
Absolutely Priscilla, and then all the prices come down because the demand is no more and when the house is back to a reasonable level of $40'000 of 45 years ago, people might want to buy again.
Rae
12th Feb 2020
3:35pm
Sounds like a plan. Then spend everything else on high living and make sure you spend all the superannuation as soon s you can too. Then sit back and let someone else worry about you and stump up the money.
Chris B T
11th Feb 2020
4:31pm
The way this is going we are going back to early 1900's to early mid 2000's, with the likes of upstairs / downstairs and Downton Abbey.
The rich would just provide for themselves, when required call for Ambulance much the same as in some Nursing Homes Now.
geordie
11th Feb 2020
6:56pm
Mr Garcia better not bump intome in a dark alley one night. Who the 'expletive' does he think he is. Well we've finally gone, at the least socialist if not full on communist. I'm not wealthy by any means but I do own mt home which I've worked to pay off (and have a comfortable lifestyle )for 50yrs. Paid my full share and more of tax and for some asshole to tell me that because I Didn't waste money in my youth and middle age, I should pay more than someone who either didn't work or spent all their cash is maddening in the least. The wealthy will pay for private. Its the poor old middle classes or should I say 'working' classes that foot the bill once again. Wheres my kalishnikov when I need it.

11th Feb 2020
7:51pm
Of course they want to tap into it - wouldn't Dracula want to tap into the blood bank? I can just see their fangs dripping slaver at the very thought of accessing all those 'billions' tied up in family homes...

Well, guess what - you'll have to send in SWAT or carry me out feet first to get anywhere near mine!
thommo
11th Feb 2020
9:14pm
Instead of trying to screw us, our government should be ensuring every retiree is is in a good place, when it comes to their retirement. At the moment, our stingey cruel government just wants us to spend our meagre savins before they put us on an age pension which is below the poverty line.? Well if that's is the case, then we seniors must kick this goverment (and any other such like political party) out of office.
The current system cannot be tolerated, and if we don't cause action for the right changes to occurr, then we have no one else to blame but ourselves.
Morrison and his government are a mean and nasty bunch of pious hypocrits, so dispatch them now. You won't get any positive reform from this bunch of mongrel bastards.
Triss
11th Feb 2020
10:32pm
Yes, Thommo, and make sure the next lot are not multimillionaires, not elders of their churches and not ex MPs with pensions that will be added to their parliamentary salary.
Eddy
11th Feb 2020
10:50pm
I advocate that one should provide for themselves in their old age from the assets one accumulates in their working life. In many cases the main beneficiaries of government support for the aged are not the aged themselves but the recipients of their estate. For instance a aged person with a $500k Refundable Deposit may received thousands of dollars of government support while in aged care but their beneficiaries will receive the $500k and the government gets nothing back for the taxpayers investment in their care. Hardly seems fair, why should my tax dollars end up in the pockets of people who do not qualify for government assistance.
Argus
11th Feb 2020
11:09pm
If the Catholic Church is involved or recommending something it will always involve them making money at the expense of others.
PlanB
12th Feb 2020
9:02am
So they are having anther go at the ones that have worked their A---s off to own their own home and have done without a hell of a lot through their lives to do so -- well you can guess what I think of them and also what I reckon they can go and do!
PlanB
12th Feb 2020
9:03am
I was interviewed for home care 11 months ago and am STILL waiting
PlanB
12th Feb 2020
9:13am
Let them use some of the money and other assets they have in the Catholic churches AND the Vatican -- if they did that it would do away with all the poor in the world --
ex PS
14th Feb 2020
4:53pm
Those who have Assets tied up in million dollar homes should be paying more for what they want. So why not take it one step further and demand people who have millions in the investment space pay more.
Easily done, just take their tax cuts off them. Time the rich were screwed at the same rate as the rest of us.
PlanB
15th Feb 2020
10:18am
If you have been n your home for MANY years it will have gone up in value a LOT --and surely you should not be expected to sell up and move out when of old age -- a home bought for $200.000 a few decades ago would be worth much more now--

What if a person has been in a waterfront home that their parents owned that would be worth a fortune -- but why should they be considered to be wealthy!?

These people would have still worked their A---ses off to own them!
SKRAPI
18th Feb 2020
9:50am
YES RETIRING WELL I'VE THOUGHT ABOUT THE CRUISE SHIP IDEA & U PROB. DON'T HAVE 2 PAY 4 EXPENSIVE FUNERAL JUST FLIP U O/BOARD FOR THE SHARKS . TROUBLE IS IF U BECAME ILL ENOUGH 2 REQUIRE HOSPITALISATION U WOULD B OFF LOADED SOMEWHERE .