The release of the Aged Care Taskforce’s final report into the future funding of Australia’s aged care system caused quite a stir earlier this week, setting off a flurry of responses.
Comments came in thick and fast from both industry experts and YourLifeChoices members, with opinions sharply divided between the two groups.
What report?
The report in question is the Aged Care Taskforce final report into the financial future of Australia’s aged care system, which was identified as an area needing reform in the 2018 Royal Commission into Aged Care Quality and Safety.
The report made a number of recommendations around who should fund aged care services, as well as how to improve these services and outcomes for older Australians.
But it was the recommendation that “wealthier” individuals increase their personal co-contribution towards aged care that caused the most controversy.
The taskforce argued that such a change was necessary to ensure the future viability of the aged care sector in the face of an increasingly ageing population. The report highlights people using their superannuation to pay for aged care as a more sustainable model.
“Income from superannuation should be drawn down in retirement to cover health, lifestyle, other living expenses and aged care costs,” the report reads.
“As a result, there is more scope for older people to contribute to their aged care costs by using their accumulated wealth than in previous generations.”
Opinions on the recommendation seem to be split between what businesses want and what the people think is fair.
Industry mostly in favour
The super industry has mostly come out in favour of the recommendations, but Mary Delahunty, CEO of the Association of Superannuation Funds of Australia (AFSA), says it is important that nobody is forced by law to set aside any of their super to pay for aged care.
“Importantly, the taskforce has ruled out ring fencing part of individuals’ superannuation for aged care, which is entirely appropriate – given the true objective of super,” she says.
It probably comes as no surprise that aged care providers have been generally supportive of increasing co-payments from customers. Sandra Hills, CEO of Benetas aged care group, says a change such as this will ensure high-quality aged care continues to exist in Australia.
“The recommendation to increase consumer co-contributions for those who can afford it, while ensuring appropriate protection for those who need assistance, is essential to supporting the long-term viability of the sector,” she says.
“We need more education for older Australians and their families regarding the true cost of care delivery in residential and home-care settings.
Louise Biti, director of Aged Care Steps, says today’s older generation is in a unique financial position compared with other generations.
“The taskforce realises that generally older people are wealthier than previous generations and should consider accessing their increasing superannuation and property assets to fund their aged care needs,” she says.
But Ms Biti notes that the proposals are, for the moment, just recommendations. It remains to be seen which of these proposals the government will act on, if any.
“All eyes will be on the May Federal Budget, when it is anticipated that the government will formulate its response and proposed changes,” she says.
But the people say it’s not fair
If the government is looking to court the votes of older Australians at the next election, then they would do well to reconsider these proposals.
To say that YourLifeChoices disagreed with this proposal would be an understatement. Comment after comment under the original story decried the unfair nature of making those who have worked hard, paid tax and saved for their retirement pay more simply because they have more.
One member, Mark, wondered if the taskforce had deliberately set out to get older people offside.
“Are these reports and ‘expert’ analysis purposely designed to annoy people? If so, well done,” he said.
“I’ve read the 65-page report and I see no mention of encouraging the extended family unit to support their own aged loved ones. I also don’t see a definition of what ‘well off’ means in terms of those ‘well off’ paying more.”
And it’s true, the report does not define what ‘well-off’ is, leaving it as a rather nebulous concept that’s likely to be changed by future governments.
Another member, Andrews, pointed out that changes like these act as a disincentive to be financially responsible earlier in life.
“If folk have worked hard all their lives and perhaps even paid the high tax rates most of their working life, why penalise them in later life,” he says.
“This is just a joke as far as I’m concerned, there is simply no incentive to work hard and plan for retirement in this country. The powers that be are simply not managing the budget, so much money being misdirected.
Member ‘Curious’ highlighted the report’s lack of recommendations on how to actually improve aged care services.
“This report did not recommend how the aged care industry can improve the services for those who need them,” says Curious.
“The quality of services, the standards of the facilities, the ratio of medical staff to those in care, and the financial structure to support this industry other than the richer older people pay more.
But Curious also says super funds themselves should be doing more in the aged care space, if only to improve member retirement outcomes, which is meant to be their goal.
“Superannuation funds were established to look after workers in retirement,” Curious says.
“This begs the question, why don’t superannuation funds have some responsibility in taking aged care financing? Let’s ask for another industry to help out this aged care industry other than pinning down ‘wealthy’ individuals.
“This is a societal issue and not a rich versus poor problem.”
Do you think it’s reasonable to ask people to pay more for their aged care? Or is the government abdicating its responsibilities? Let us know what you think in the comments section below.
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