Aged care reforms update

Following the recommendations of the Productivity Commission’s report into the future of aged care, Julia Gillard today announced the reforms, which her government believes will address the shortcomings of the current arrangements. How will these affect you?

Keep your home
Firstly, and possibly most significantly, the recommendation of a government-regulated equity release scheme to enable those entering care to fund accommodation bonds has been rejected. Instead, people will now be able to pay such bonds in a lump sum, by periodic payments or a combination of both. In order to allow families time to consider all options for funding, a cooling-off period to any agreement signed will be implemented. Furthermore, accommodation charges will be regulated by a newly established Aged Care Financing Authority.

Self-funded retirees
Self-funded retirees will be required to pay more for residential and in-home aged care. For residential care this will be capped at $25,000 per annum and no one will pay more than $60,000 in a lifetime. For Home Care packages, those with an income of over $43,000 will pay on a sliding scale, which is capped at $10,000 per annum. For those with an income under $43,000 they will pay no more than $5000 per annum. This is also capped at $60,000 in a lifetime.

Means testing
How much a person can afford to contribute towards their care will also change. The income and asset tests will be combined to create a more even assessment of ability to pay. The family home will remain exempt.

Aged care places
Through increased funding, the number of residential care places will rise from 191,522 to 221,103. The number of Home Care packages available will rise by almost 40,000 in the next five years, to 99,669.

Dementia
Additional funding of $164.3 million will be used to provide financial assistance under a Dementia Supplement to those who qualify.

Website
The new My Aged Care website supported by a national call centre will be established in 2013 and is the first step in creating an integrated information and assessment entry point.

Aged care workers
Finally, $1.2 billion will be allocated over five years to attract, retain and train aged care workers to help address the current and projected shortfall in this area.

Do these reforms go far enough? Will they help you access and afford aged care?

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Written by Debbie McTaggart



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