Paul Keating proposes HECS-style home care funding model

The former PM has a plan to keep older Australians at home for longer.

Paul Keating proposes HECS-style home care funding model

For many, the term ‘aged care’ was tarnished before the pandemic. It has potentially become even more so since.

The government-run private aged care sector has been the focus of much scrutiny throughout the COVID-19 crisis, particularly in Victoria where mismanagement has cost hundreds of residents’ lives.

Unfortunately, public aged care facilities will likely be tarred with the same brush.

More and more these days, most people want to age in place.

A YourLifeChoices survey of 4117 older Australian revealed that 62.5 per cent of respondents want to stay at home for as long as possible.

They want to stay at home even after their partner has died (71 per cent) or if their partner was moved to an aged care facility (65.5 per cent).

However, more than 50 per cent know that they may not be able to afford to age in place.

Former prime minister Paul Keating has a plan to keep older Australians at home for longer.

It takes the form of a HECS-style loan that will cover home care costs for those who do not want to go into a nursing home.

Under Mr Keating’s plan, every Australian could be extended a loan to pay for their care and the costs would be recovered from their estate upon their death.

Speaking to the Royal Commission into Aged Care Quality and Safety, Mr Keating said his post-paid system would not only reduce wait times for home care packages, it would also ease the financial burden on families and preceding generations.

“The Commonwealth could then advance as loans to every aged Australian so much as to meet their needs in support services to stay at home or alternatively in care accommodation,” said Mr Keating.

“Everyone would have an account … the Commonwealth would advance money to the account to pay for your home care accommodation or aged accommodation.

“Then, upon your death – and no earlier – there would be a credit to that loan account from the estate of the deceased person.

“The Commonwealth account would then receive a credit … so we’re not forcing anyone out of their home.

“We’re not obliging aged persons to negatively mortgage their home, you’re not asking families to chip in and pay for their relatives in their accommodation or their care, and so I think such a system has a lot of advantages.”

Around 100,000 Australians are already waiting for a home care package. Mr Keating’s plan could accommodate them at the level to which they’ve already been assessed.

“We live in this wealthy country … why would somebody need to wait 36 months for a level four package, or 24 months?” he said.

“These are aged people; they’re likely to die in the period.”

Leading seniors groups have cautiously welcomed the idea, says an ABC report.

“I think at the theoretical level it’s certainly worth exploring … the devil will always be in the detail,” said Councils on the Ageing (COTA) Australia chief Ian Yates.

National Senior Australia chief John McCallum likes the idea but says it might be “hard to sell”, as many older Australians don’t just view their home as an asset but rather as something to leave their children.

“I think the sort of trouble we’ve had … from a consumer point of view [is] it’s a difficult one to get to understand,” said Professor McCallum.

The Combined Pensioners and Superannuants Association (CPSA) said the proposal may provide aged care security for older Australians but could pose financial risk for the government.

“Basically, it sounds like a universal unsecured loan and I’m not sure any government would be able to take that on,” said CPSA policy manager Paul Versteege.

Public finance expert Dr Marc Robinson says the model misses the point of aged care.

He claims the biggest problem facing aged care is the minority of elderly people who end up needing particularly long periods of expensive residential care because they suffer from dementia or another very severe disability.

“Everyone should be protected against this risk through social insurance, which would pay for aged care costs above a certain threshold. That way, those who end up being part of this unlucky minority would be protected from the huge financial burden of care. Everybody should pay a premium – in the form of a supplement to the Medicare levy – in order to pay for this insurance,” he said.

“Mr Keating’s proposal is, in effect, that everyone should pay the full cost of their aged care unless there are insufficient assets in their estates to do so. This would be like having health system in which government lends everybody money to pay for their healthcare during their lives, and then grabs the estates of anyone who had incurred very high healthcare expenses during their lives due to particularly poor health.”

Dr Robinson says we should adopt an insurance-type system, such as those in place in countries with the best aged care systems, such as Japan, Germany and the Netherlands.

“Even the British conservative government of prime minister Boris Johnson is moving now to implement an insurance-type system,” said Dr Robinson.

“In principle, aged care insurance could be provided either by the government or by private insurance companies. However, international experience shows that, for such insurance to work, it has to be compulsory for everyone. And if insurance was provided by private insurers, it would have to operate under a system with a standard policy and premiums regulated by the government.

“Overall, a government insurance system would be simpler and more efficient.”

As to the suggestion that the “post-funding model” might be viewed as a death tax?

“If there’s not assets there, then the Commonwealth pays, but it’s a very nice way of working out what the Commonwealth should really pay vis-a-vis the residual assets of an aged person in superannuation or bricks and mortar assets, etc,” said Mr Keating.

In the late 1980s, around 6.5 people between the ages of 15 and 65 supported every one person above 65. Nowadays, 3.7 people supports every person over the age of 65 and that number is predicted to fall to three by 2040.

“As you know, a lot of young people now who actually become that cohort, the tax paying cohort, many of them have low incomes, they’re renters, they start life with a HECS debt if they’ve been to university and, of course, they pay the GST 10 per cent cold, regardless of income,” said Mr Keating.

“So, to this cohort we are inviting them to carry the great body of retired aged people and, of course, now with the debts of the COVID budgetary interventions.”

What do you think of Mr Keating’s idea?

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    COMMENTS

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    panos
    15th Sep 2020
    4:08pm
    What Private insurers involved, gawd help us the nightmare is beginning
    Missskinnylegs
    15th Sep 2020
    4:23pm
    FORMER PM Keating should stay that way - he forgets he was voted OUT - why is it when you get older every damned b****er wants to get their hands on your super, your savings, your home - what IS the point in paying taxes
    Cheezil61
    15th Sep 2020
    4:30pm
    Yes, agree, dodgey!
    Joy Anne
    15th Sep 2020
    6:35pm
    Pay too much taxes, what do the people do if they don’t own a home and single,
    Bloody hell I wish they would leave the pensioners and aged alone, just give us our level 2,3, etc within 2 months instead of after we are dead. We worked 50 years for our pension.
    Julian
    17th Sep 2020
    7:18am
    Keating together with Dudd, suffer from relevance deprivation syndrome. Thus their constant need to pop up in the media with opinions, of which I for one, don't care.
    mogo51
    15th Sep 2020
    4:37pm
    Anything that comes out of the mouth of Paul Keating should be dealt with contempt.
    Joy Anne
    15th Sep 2020
    6:31pm
    Definitely agree
    On the Ball
    15th Sep 2020
    9:43pm
    Like universal superannuation for every worker...
    Thanks Paul. Because of your idea, myself and my wife can retire with sufficient funds without drawing a pension.
    Youngagain
    16th Sep 2020
    6:25am
    Not because of Keating, On the Ball. Because you were fortunate enough to have employment that enabled you to save. Low income earners end up with virtually no super. During Keating''s time in power, many low income earners were actually getting BILLS from their super fund, because the outrageous fees were higher than the employer contributions. And now tax on super is costing the nation mega-billions and benefiting the richest 20% excessively, while giving the lower income earners little or nothing. But then those who have modest savings that don't generate a living income can't get a pension until they run most of their savings out. That was also Labor's brain-child! Means test the pension so savers are punished. And now Keating is at it again. If you save, you lose. If you don't, your age care is free. Brilliant! Let's make sure nobody gets to keep anything, and only the rich or those fortunate enough to die without suffering ill-health get to leave anything for their kids. Bring on the Communist state, Mr Keating.

    I agree with mogo51 and Joy Anne.
    Sen.Cit.90
    16th Sep 2020
    2:22pm
    G'day mogo51,
    I agree with you; the nation listened to him and his banana republic speeches. It cost me and thousands of others most of their life savings
    Johno
    15th Sep 2020
    4:38pm
    What's the difference between that and a reverse mortgage? They want to fleece us of everything we have before we fall off the perch!
    Farside
    15th Sep 2020
    5:54pm
    you don't have to take the loan.
    Pedro
    15th Sep 2020
    6:51pm
    True right Johno , Farside must be in a good position not to have to care about the rest
    Farside
    16th Sep 2020
    10:50am
    It is not something I have considered but then I'm not seeing myself as a victim of a thought bubble or commercial scheme; the rest can also choose between whether to reverse mortgage or similar scheme such as the proposed.
    Tanker
    15th Sep 2020
    4:38pm
    One problem with the current system is that it is essentially privatised with a "middle man" getting a fair sized chunk out of the taxpayer funded finances. In some cases 30% to 40% goes on "management fees".
    Surely there is a more efficient way of doing it. Of course perhaps it is like aged care where there is no government oversight on how the money provided is being spent.
    Rae
    16th Sep 2020
    5:53am
    Yes Tanker, not unlike huge fees gouged by job networks, labour hire firms, security firms, aged care providers, childcare providers. It's called privatisation.

    The solution is a properly funded and run public service.

    Only public service is accountable and transparent. The private system is commercial in confidence and we have no idea how much profit they skim off the top of funds paid to them by taxpayers.
    Mariner
    15th Sep 2020
    4:41pm
    Might not suit everyone but I would agree with Keating. Saw him explaining it on TV and he did make sense. Of course, Panos, there should be no private insurers involved, only Govt. And we would then also invite the Government to give us the universal pension. It could work unless the Aussie belief holds sway: Everything should go to my family when I die. Well, guys, we do have to be realistic - spend what you have accumulated in your time and let the young ones look after themselves in their 40s, 50s. I'd be in it.
    SAM
    15th Sep 2020
    4:50pm
    I agree, the time has come where the government cannot keep on paying for everything.

    If we don’t want the younger generations to have huge Government debts to cover via taxation we have to contribute ourselves if possible.
    Tzuki
    15th Sep 2020
    5:17pm
    I agree. we shouldn't be worrying about our descendants but looking after ourselves. We didn't have employer-paid super like they do now. And when we were creating a family we had second hand furniture and scrimped and scraped to get by. I remember paying 27% interest for our house for a time. What are the younger ones paying now and what furniture/cars are they buying now?
    Elizzy
    16th Sep 2020
    12:25am
    I agree that no private insurers or providers should be involved, or costs will rise so much that one house will not cover the duration of your old age to the time of your death! Based on Australians' experience with private health insurance, the devil is certainly in the detail for this proposal.
    Rae
    16th Sep 2020
    5:56am
    The way it's going buying a house seems like a dumb idea. Probably better to rent someone else's and live the high life and then be guaranteed of public spending when you are older.
    Youngagain
    16th Sep 2020
    6:28am
    Yes, Rae. Saving is a punishable offence now, it seems. Everyone is being encouraged to live it up while they can and bludge on the state when the going gets tough. No wonder young folk won't settle for second-hand furniture and don't scrimp and scrape to get by. There's simply no point to doing that anymore.
    Mariner
    16th Sep 2020
    8:21am
    Youngagain - spot on. But we grew up with the old ways. I did change my way of thinking when the Govt of the day made the age pension into welfare. Having not been out of the country for 15 years we started going overseas every year, stopped saving money, retired at 58 and used super till age 65 and then qualified for part pension.
    You are right - the young ones will not be that dumb any more, they are learning about the way their parents are treated and will make sure they are not in the same trap. Govts should rethink their strategies I think.
    ozjames70
    16th Sep 2020
    12:24pm
    Mariner, if the aged care model had not been turned into a scam to rob old people of their money and pay it to wealthy investors, I might have some agreement. But Private Health Insurance and Aged Care are just two areas where our governments have created and presided over systems that make a lot of money for a select few at the expense of those they should be there for. Anytime you add a level of expense to something that should be a government service there will be extra costs to pay those who are involved. When I die, it should be my choice to leave my money to family, charity or anything else I choose, which could include the government coffers, although this is unlikely as they just give it away to the big end of town or foreign countries (see Lima Agreement).
    Sam, the government does not pay for anything: past and present taxpayers do, which is why we need to get people back to work. If I look at the taxes I've paid, it covers way more than the miniscule pension and health costs I've consumed.
    Tzuki, I totally agree. We have gone through tough times in the past, which has made us the resilient nation we are.
    I worked multiple jobs to put myself through school and university, started out with a cheap house and renovated and traded up, drove an old car (didn't own a new car till I was in my forties), made do with old (non-matching) furniture (including covered boxes) and worked multiple jobs and saved to get ahead.
    I paid taxes since I was 15 and now at 67 have retired, not because I want to, but because no-one will hire a 67 year old and there is nothing to protect older worker's jobs in businesses that hire younger cheaper workers as a business model.
    As a pensioner, I own my own home and do some maintenance myself, but pay others to do a lot. I pay utility bills, buy food, clothes, goods and fuel and contribute to the economy. I spend money in the economy.
    Yes I have some medical treatments that come with age, but less than your average footballer and unlike politicians, any money I am able to earn, gets deducted at $1 for every $3 I earn.
    Over my lifetime I have paid over $4M in earning related tax (and I have not earned excessive wages or incomes) and have paid even more in GST, Fuel Tax, Stamp Duty, Capital Gains and Land Tax (when I had an investment property) and have contributed in other ways to the community I am living in, through Community and Service Groups.
    I get despondent when I hear politicians and ex-politicians who are living at our expense, saying we older people should now be prepared to move away from homes we feel comfortable in, to places where the various governments have not invested in healthcare or other services. I get annoyed when I see the OAP I paid taxes for, which was supposed to be for a livable income based on a percentage of the current male wage cut and tweaked by incompetent politicians (who at the same time index their pensions), many of whom have never held a real job outside of government, politics or some other 'snout in the trough', protected organisation.
    Telling me my costs have not significantly increased just shows how out of touch our politicians are. And then for a current generation of thought leaders to say we elders should sacrifice ourselves, try and guess how long we'll live and sell down an asset we've worked our whole life for, live off it, paying for medical and other services we have already paid for, and give whatever is left when we die to the government is a joke. These politicians are too young to recall various States were forced to abandon death duties by the public.
    Let's cancel our politician's super scheme and put the politicians on the same deal as every other Australian and see what they think. Block family trusts for the politicians, the rich, footballers and actors and see if they are still so outspoken about real workers.
    I don't begrudge JobSeeker being a realistic amount, but make people work for it. We can't get workers in hospitality or farms, but maybe if people were encouraged to do this as part of their 'obligation' things would improve. I have been assisting an organisation as a volunteer and can't believe the number of people we've interviewed who advise they would need a very high wage to come off JobSeeker and all its associated benefits, including the free time they get. At $40K, the job pays well, but can't afford what the applicants want. It is a new job, so not covered by JobKeeper, so applicants on JobKeeper (even though they have been in a lower paid role) have advised against the role
    Generally JobKeeper should only be a top-up where people's hours have been cut and should top it up to what they were earning, but not where they are choosing to work less hours and top their wage up with JobKeeper. or give them more for the same job with less hours.
    Where people are 'earning' more on JobKeeper or JobSeeker than they can in a job, it tells us there is something wrong. As long as we are not paying workers too little, it should not just be a subsidy on the wage bill to increase profits. This requires gutless politicians to look at the obscene profits being made or money repatriated oversees and fix the real employment problem. JobKeeper was meant to keep people employed, not be a tool for companies to declare a drop in income and make more profits or to keep wages down by paying staff a better rate by including JobKeeper.
    It's not about handing everything out on a plate, but what happened to fair-go?.
    tisme
    15th Sep 2020
    4:48pm
    then family carers are going to need to be recognized as workers and given the same rights and support as non related support workers etc
    SAM
    15th Sep 2020
    4:51pm
    Maybe we need to be like some European nations where we help and care because we want to?
    Rae
    16th Sep 2020
    6:02am
    Which isn't much these days of NDIS providers being paid too much to administer a failing system because middle men are making out like bandits in every service taxpayers pay up for.
    Brissiegirl
    15th Sep 2020
    4:50pm
    Here we go again. Another chardonnay socialist telling those of us who slaved our guts out for a home can pay for our age care while those who bludged their way through life get it for free! Paul Keating, you utter creep, also known as the Undertaker, you gave us the recession we had to have, you gave us 17% home loan interest rates, so you can bugger off, do as you please with your own money but quit telling the rest of us what to do with ours.
    Considering only 5% of the population ends up in a nursing home, why not introduce an optional insurance scheme for qualityage care, for those who want to take it up. Ageing at home can become highly problematic when people are bed-ridden, need catheter maintenance, and a myriad of horribly debilitating health impediments. It would be far better imo to bloody-well end the private nursing home industry as we all know, without any shadow of doubt it's a money-making machine leeching off the misery of helpless old Australians.
    Youngagain
    16th Sep 2020
    6:29am
    Hear hear, Brissie girl. You nailed it.
    ozjames70
    16th Sep 2020
    12:31pm
    Brissiegirl, our 'poor' neighbour across the pond still controls aged care and limits the amounts people in aged care pay. Just like our system was before Keating and co messed around with it to help their buddies turn aged care into a lucrative business, rather than a government service.
    By the way, their is very little if any 'care' in aged care!
    Rae
    15th Sep 2020
    4:51pm
    Are they going to add childcare rebates, grants, and everything else into this plan of Keating's?

    He's on huge publicly funded income stream and his estate will be clear when he goes. Rotten neo-liberal menace!
    Chris G
    15th Sep 2020
    4:57pm
    This might be naive, but with a universal pension (if we ever got to that point) would this work?
    Mariner
    16th Sep 2020
    8:44am
    The "universal pension" comes up quite a bit in these pages. It is not that simple. In my place of origin it works OK, but from age 18 to 65 you are contributing a certain percentage of your taxable earnings into it, say 10%, your employer a bit more. Any year missed you will get less at age 65 (women at 64). Company directors and street sweepers are paying in the same percentage but only get the maximum back (a full pension with all years completed today is $A3600 per month). I have contributed only 2 years before coming here and I am getting $A120 a month for that. Living abroad the rates will remain fixed. Centrelink helped me getting it and they send me an itemised balance sheet every year because exchange rates vary every month. Without putting in one becomes a social case.
    The Australian system is good and much more generous for people who do not feel like working all their lives. I think the UK system works like that as well, I had to buy subscription stamps with every payday in the 70s towards the old age pension.
    You can have private super on top of that and there is no means test, only tax on the lot so for ambitious workers it works out well. You are not punished for getting ahead like it is the case here.
    Horace Cope
    15th Sep 2020
    5:02pm
    What about renters? What if they choose to stay in their rented home? Under this scheme they may not be eligible and that is discriminatory. Keating is to be applauded for his super scheme which, in the fullness of time, will prove to be an excellent way to give retirees a bit more freedom but I fear this scheme smacks of a scribble on the back of a beer coaster.
    Oldman Roo
    15th Sep 2020
    5:57pm
    Just as all the rules and laws will never sui everyone , at the end of the day, with no disrespect to some unfortunate people that had a raw deal in life , there is a majority that chose their lifestyle and enjoyed it , unlike many homeowners who saved , scraped and worked long hours to achieve their ultimate in Home Ownership .
    This is also my reason for rejecting Keatings plan . I like the feeling of owning my home and not having the Government shifting the goal posts one day or some financial disaster putting property values and security at risk . Just like it did with lowering interest rates to a point that is not only killing the incentive to save but could also cause a major crash of the economy with horrendous effect on house prices .
    Rae
    16th Sep 2020
    6:06am
    Indeed Roo this gouging simply because house prices are hyper inflated and everyone wants at the money has gone far enough.

    Renters are looked after for free. It's only savers with anything their greedy eyes are latched onto.

    There are not that many over 65s anyway compared to under 18s. This is a beat up simply to get negative equity loans for the banks.
    Eddy
    15th Sep 2020
    5:23pm
    I think it is a proposal worth further exploration. If something is not done to reduce the burden of aged care from the shoulders of the young taxpayers then they may foist something onto us which maybe even worse. If we consent to inflict HECS onto the young then they may see HECS as a precedent to inflict a similar ideology onto the old.
    I personally have no issue with the proposal that ones aged care should be at least partly funded by the assets one accumulates during ones working life. The idea that people want to retain their assets to pass onto their beneficiaries could be seen as a taxpayer funded endowment for those who do not qualify for public assistance. Those who oppose Mr Keating's idea may like to give us the benefit what they could propose as an alternative.
    Hirajima
    15th Sep 2020
    5:31pm
    I tend to agree. Young people won't be able to continue to pay out for our care, especially after Covid-19. Something has to change, whether it's this or some other quite radical innovation. Time for creative thinking, and don't shoot the message because of the messenger. "Do you like Keating? I don't know, I've never Keated!" :P
    Youngagain
    17th Sep 2020
    9:36pm
    Simple Eddy. Stop the profiteering. Aged care is one of the most lucrative businesses in Australia. Childcare is another. Because they are essential services and the government will always look for ways to ensure they are funded, vultures who run these facilities are constantly both cutting costs (and hence further reducing an already poor standard of care) and demanding the government find more ways to line the pockets of the greedy business owners. Sadly, the government is caving in instead of legislating that profiting from providing aged or childcare is illegal. Legislate that these facilities must be run by not-for-profit organizations only. Kick out the greedy vultures. Aged folk could live in a luxury hotel or on a cruise ship for less than they are paying for a room in an under-staffed facility and food I wouldn't give to a mongrel dog, and the corporations running these facilities are achieving massive revenue and profit growth.
    Muttonbird
    15th Sep 2020
    5:25pm
    Dr Robiinson's idea is much better and fairer.
    Hirajima
    15th Sep 2020
    5:32pm
    Never heard of it, do you have a link?
    tams
    15th Sep 2020
    5:47pm
    Marc is a member of the OECD Advisory Panel on Budgeting and Public Expenditures. Resident in Switzerland, he is a Swiss and Australian dual national.

    Same Marc Robinson ?????
    Hammer
    15th Sep 2020
    5:54pm
    Who cares what a has been ex PM thinks. Had his day. Wrecked the country. Go away any keep your thoughts to yourself
    Farside
    15th Sep 2020
    5:59pm
    history says different - Howard/Costello were the economic wreckers.
    Hammer
    15th Sep 2020
    9:09pm
    What a load of rubbish. You must be brain dead. Or union biased!!!!!
    Rae
    16th Sep 2020
    6:11am
    Selling off the banks and destroying Australia's currency sovereignty for Central Banks was pretty destructive.

    Keating's 23% interest rates has already cost me one house. I want a roof over my grandkids heads with this one because the foreign owners of everything will have them homeless otherwise. Or renting all their lives for foreign landlords.
    Pedro
    15th Sep 2020
    6:49pm
    Easy for the wealthy to say, (ex Labor PM Keating ,its just another reverse mortgage), worked hard all my life to get screwed over by morons who don't know what tough times and hard work are, we have paid our dues, leave our homes alone, we worked paid for them.
    CountryCatkin
    15th Sep 2020
    7:40pm
    I am a pensioner, but oh my goodness, there are some truly narrow minded contributors out there. I would not like to debate any subject face to face with them if their attitude to every suggested idea is never weighed up. One size does not fit all and there is merit in most suggestions, even if they do not always come to pass in their original form.
    floss
    15th Sep 2020
    7:20pm
    At last a glimmer of hope.
    aussiehero
    15th Sep 2020
    7:21pm
    What's to stop the aged person from divesting themselves of their major assets to their children as soon as they start ticking up expensive nursing?
    Youngagain
    16th Sep 2020
    6:32am
    Smart people are already doing that so they get a pension, Aussiehero. It would be stupid to hang on to assets knowing the state was the only beneficiary.
    Nan Norma
    15th Sep 2020
    7:25pm
    Any care package given to support a person to age at home, instead of a nursing home, is only as good as the person that walks through the door to provide the assistance. I have seen many different standards of cleaning. What passes for making a bed has become a source of amusement for me. The management fees are ridiculous. I could better manage the money myself. (In fact I was told that in England the money is given to the client to employ her own support worker). I feel this whole homecare industry is fast becoming another area of financial exploitation the way the nursing home situation has become.
    sunnyOz
    15th Sep 2020
    8:53pm
    Nan - and another huge problem is the outrageous fees charged by the service providers. Was a good episode on ABC recently, highlighting where many of these provider companies charge 50% to 'manage' these packages. That's one reason why there has been a huge explosion in these so-called provider companies. I live in an area with a high number of seniors, including 22 aged care facilities.
    If you do a search for service providers who service our area - it comes up with ONE HUNDRED AND FOURTEEN companies! That's just covering the ONE area!
    Many of these companies are charging senior home residents more in fees than they spend on the actual care of the person. The money should go direct to the person involved, or their family, to control. No third party.
    micky d.
    15th Sep 2020
    11:07pm
    Hello Nan and SunnyOz.

    My wife has been on a level 3 Home Care Plan for the past 16months, with over a year using a reputedly top-class Provider to handle her subsidy.
    That Provider took a fee approximating 30 % of that subsidy and provided very little management.
    We decided to explore the area of SELF-MANAGEMENT and now enjoy a far better service for only 13% of the subsidy. Look around. Check it out.
    The difference in charges allows my wife to receive extra hours of care.
    Self- Management may not be suited to every situation but it is most certainly worth investigating. It is nowhere as daunting as the title suggests and, in fact, is very easy to negotiate.
    Cheers.
    aussiehero
    15th Sep 2020
    7:34pm
    What if an aged person becomes sick requiring expensive nursing for, say, 20 years? Inflation would surely wipe out any inheritance to his children. Most people work to have something to pass on to their spouse and kids. I wouldn't mind betting that, contrary to what Mr Keating says, all estates would end up in the hands of the government of the day.
    sunnyOz
    15th Sep 2020
    8:57pm
    Sorry Aussie - forget this silly notion of 'inheritance for the children'. Totally wrong to say that "most people work to have something to pass on tho their kids". Rubbish.
    Youngagain
    16th Sep 2020
    6:37am
    So, sunnyoz, most people don't care about their offsprings' and grandkids' welfare? Sorry, I agree with aussiehero. I think a lot of people work damned hard to ensure their kids and grandkids enjoy a decent standard of living, and it would be brutally unfair to say that those who die without suffering much ill-health are entitled to leave something behind but the heirs of the less fortunate, who suffer illness, get nothing - no matter how hard their parents strived to give them a helping hand. All a plan like that does is provide strong incentives for people to gift their wealth to kids before the crunch comes. The soon-to-retire are doing it now - giving heaps to their kids so they can claim a pension, because having savings is now a punishable offence and many who saved well have far less income than a pensioner, unless they rip into their savings - for taxpayer benefit only - until most of it is gone.
    Farside
    16th Sep 2020
    11:04am
    got an outlook on inflation for next two decades?
    Youngagain
    17th Sep 2020
    9:24pm
    Well, clearly either a lot of folk are supremely confident there won't be any or are determined to grind anyone who saved for old age into poverty, because all we hear is 'spend your assets'. Nobody seems to consider that if inflation takes off again, those who were forced to spend their savings will be in the poor house.
    Farside
    18th Sep 2020
    12:07am
    the big money is looking at US gov 10 year (0.7%) and 30 year (1.3%) bond rates and betting no or low inflation any time soon. Japan has been stuck in a low inflation funk for more than two decades. I don't think there are many people betting on return to 3% inflation within the lifetimes of most YLC readers.
    Youngagain
    18th Sep 2020
    7:38am
    Yes, Farside. Sadly I think that is the case. What a disaster! All these 'expert' economists around the world, and 'smart' politicians, all claiming fat pay checks because of their supreme 'expertise', and they have totally stuffed the world and destroyed lifestyles. Not that we want to return to rampant inflation, but reasonable investment returns and a stable economy - like we had in the '60s - would be so nice!
    Farside
    18th Sep 2020
    1:16pm
    well we cannot change present circumstances, but it does mean that seniors making decisions in relation to their futures should not place a great deal of weight in "if inflation takes off again".
    aussiehero
    15th Sep 2020
    7:49pm
    A better idea might be to have all nursing homes and home care service providers become mutual companies, like the old mutual insurance companies, without shareholders so that all profits must be plowed back into the enterprise either increasing services or lowering fees.
    Youngagain
    16th Sep 2020
    6:38am
    Agreed.
    Mariner
    16th Sep 2020
    9:36am
    Good idea but if successful it will be sold off.
    Youngagain
    17th Sep 2020
    9:28pm
    So legislate that aged care cannot be run for profit. Would be a good idea to do the same with childcare. Legislate that these are essential services and must be run either by mutual societies or charities and that they can only charge the absolute minimum required to provide a quality service and break even. Nobody should be making ripoff profits from caring for the vulnerable, because that just encourages cost-cutting that puts vulnerable people in danger.
    Mike Omment
    15th Sep 2020
    8:23pm
    I have a plan for keeping older ex prime ministers out of the financial downfall of older Australians affairs . It involves keeping the mouth tightly shut while enjoying your obscene pension.
    Youngagain
    16th Sep 2020
    6:40am
    I have a better plan. Make them donate 100% of their wealth to the government, since they stuffed the country making dumb rules when they were in power, and then deport them to Siberia.
    Aussie focussed
    15th Sep 2020
    8:38pm
    So Mr Keating. We have paid our taxes all our lives. We have worked most of our lives. We now want to try and enjoy the life we have left .......... but we need to work longer because our pension qualifying age has been increased?! YET, no affirmative action plan for us oldies, BUT if we are new to this country yes there is, if we don't speak English we stil get welfare, if we of a religion that has 4 wives we get 4 houses and 4 welfare cheques. BUT you want us to take out a loan and LIVE!! So new arrivals get the pay cheque?!! Please EXPLAIN in more detail.
    On the Ball
    15th Sep 2020
    9:48pm
    Good idea. But I can see clouds-a-formin'..
    Currently there is a lot of (unsaid) "pressure" on the elderly to pop off the planet and leave a house to the kids (who can't afford one of their own, today). At times I feel guilty by not taking the early death option!
    An unexpected benefit of Paul's plan is that that those that would inherit the estate would be encouraged to keep their oldies fit and well for as long as possible. Less in-home care means more inheritance! (There IS a flip side to this too....)
    Teacher
    15th Sep 2020
    11:28pm
    Like everything else the government suggests there's money in it for someone. In this case it would be the government, because you can bet your bottom dollar that the percentage of interest to be paid back from the estate will just about wipe out the estate - in my case only my home, which I'm hoping will benefit my children by being sold when I pass on.
    This new suggested 'loan' is mentioned only for health services but what about the upkeep and maintenance of the home bought and paid for by 60 years of blood, sweat and tears when you don't have any other savings? Of course, you can already borrow from a bank on your home, but if you are lucky enough to live a a goodly long life after taking out the loan, there won't be much left as a legacy for your children after the loan and interest is paid out as the interest is so high. It sounds like just a 'catch 22' situation.
    While on the subject of 'life assurance' I tried to take out a policy just after I turned 80 but was told that the policy was only available up to 79 years of age. I said I could produce a medical certificate to say I was in very good health but that was unacceptable. So beware, if you are looking at life assurance in your later years you need to take out a policy well before you turn 80 or you miss out.
    Chris B T
    16th Sep 2020
    8:08am
    Doesn't Present "HECS Debt" ceases when Precipitant Dies so now they are saying that Debt to Grave and Beyond for Others.
    Ted Wards
    16th Sep 2020
    8:42am
    NO thank you. THe current system may not be perfect but why should our aged go into more debt. This is a suggestion from a man who could not run our country.
    Willfish
    16th Sep 2020
    5:33pm
    Our plan is to enjoy our life until the end and spend as much as we need to ensure that. Any money left over at the end will simply be a miscalculation. We owe our kids nothing - we gave them a great start and now they are quite well off. Why should the government (taxpayers) have to pay for our aged care so we can leave a huge asset (our house) to our kids. Great idea Mr Keating. Good to see you are still thinking on the welfare of older Aussies.
    Youngagain
    17th Sep 2020
    6:32am
    Paul Keating? Isn't he that has-been b....d that caused a major recession (and claimed accolades for doing so!), cost hundreds of thousands of Aussie's their home, drove millions of families into hardship with 18%+ interest rates, and generally stuffed the Australian economy? And now he wants to advise on aged care? Tell him where to put it. He's a walking disaster and he should have been put out to pasture long ago - preferably BEFORE he entered politics in the first place.
    Youngagain
    18th Sep 2020
    7:49am
    A friend went into an aged care facility run by one of the largest private company providers. The facility had an excellent reputation. She was careful to interview many who lived in it and relatives of deceased folk who had spent their last days there and all reports were positive. She trialed it for a month and reported the food was superb and the care excellent. She committed to spending her last days there and paid for a room. She thought the fees were high, but acceptable.

    Six months later, she reported that everything had been fabulous but she was concerned that a new manager was taking over and it was rumoured the Board was not happy with the management and had asked the manager to resign. The new manager came in, guns blazing, saying cost cutting was needed as profits were 'at an unacceptably low level'. In fact, profits were running at around 20% p.a. (pretty good in my estimation).

    My friend reported that standards quickly fell. Staff numbers were reduced. Care standards fell. Food quality went from excellent to barely acceptable and menu choices reduced from 3 per course to no choice at most meals and only 2 on occasions. Activities and entertainment was slashed. Six months into the new management's reign, complaints were flying everywhere, but the new manager was praised by the Board for almost doubling profits.

    Now, it seems, the Government wants to steal houses from our children to pay the extortionate costs needed to ensure care standards can be improved without compromising these outrageously high profits to greedy foreign corporations that came here to pillage and plunder, with no regard for the obligations any aged care provider should be compelled to acknowledge and accept.
    Farside
    18th Sep 2020
    3:27pm
    No doubt your friend is disappointed in experiencing a deterioration following a change of facility management. Has she reported the matter to the Aged Care Quality and Safety Commission? Is there a reason she is unable to leave and move into a different facility?


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