Carbon tax impact on aged care costs

Aged care facilities have been given the go ahead by the Government to take their share of carbon tax compensation paid to residents. From 1 July, aged care facilities have been able to take an extra one per cent of a resident’s pension to cover costs related to carbon tax increases. This means aged care facilities are able to claim 85 per cent of a resident’s pension payment.

The Department of Health and Ageing wrote to pensioners last month explaining that the one-off Clean Energy Advance was to cover rising costs and that this money should be set aside.

A spokesperson for Aged Care Minister Mark Butler defended the price increase by saying that costs were offset by the pension increase (initially in the form of the Clean Energy Advance until pension rates are increased in March 2013 with the Clean Energy Supplement).

Opposition aged care spokeswoman Concetta Fierravanti-Wells said the costs would exceed the rises in pension payments.

“The longer the carbon tax is in place, the worse the impacts will be on aged care providers, and ultimately this is going to hurt some of the most vulnerable people in Australia,” Ms Fierravanti-Wells said.

This is however in contrast to independent research by the CSIRO, economic consultancy AECOM and consumer advocate Choice for environment think-tank The Climate Institute, which shows compensation for the carbon tax will outweigh cost increases.

Opinion – Are we missing the point?

Aged care residents are up in arms that the cost of their care is rising as a result of increased costs due to carbon tax. Aged care facilities have been granted the right to take an extra one per cent of a resident’s pension to cover costs. I fail to see what is the problem.

The facts:

From 1 July 2012 Australia’s top 500 carbon producing companies will be taxed based on the carbon they produce.

Costs, especially power bills and food, will increase.

Those on low incomes and pensions have been given and will continue to receive compensation to cover such increases.

The Clean Energy Advance was paid to pension recipients in May/June this year to cover rising living costs from 1 July 2012 until March 2013, when the Clean Energy Supplement will see pension rates rise.

So there you have it: the sky has not fallen in, Armageddon is not approaching and we will carry on as we always have, finding something to whinge about and letting everyone else know how we feel.

Of course aged care residents will have to pay more for their care. If the costs of facilities are increasing, then these costs have to be covered. This is the point of the Clean Energy Advance; it’s not just an end of year bonus paid to pensioners. If an aged care resident was to live at home, they would have to spend the extra money on extra living costs, so the outcome is the same.

What we are missing is the fact that those on a pension do not have enough to live on, full stop, carbon tax or no carbon tax. The Government will continue to bleat on that pensioners have had their payments raised by $6.50 per week. And while on paper this is true, the reality is that this money is to cover rising costs from the carbon tax, not to cover the already massive shortfall in Age Pension amounts that pensioners have had to live with for years, if not decades.

It’s time to stop blaming the carbon tax for pensioners not being able to afford to live. I make no bones about it; I believe the carbon tax is a good thing. Pensioners and those on low incomes have been given compensation to cover rising costs, whether it is sufficient remains to be seen, so we should wait and see.

However, it’s is time for the Government, our MPs and all the hangers on who advise them, to seriously look at how pensioners are expected to live on $19,643 when, as Drew reported last week, even a lowly back-bencher has over the past three months received pay rises totaling $49,640 per annum.

This is what is unfair and unjust.


Are we simply too accepting about how little pensioners have to live on? Is there anything anyone can do to correct the situation?

Written by Debbie McTaggart