The provision of aged-care in Australia has long been characterised by rationing, over-regulation and glaring inequities. Now, with the delivery of the Productivity Commissions report Caring for Older Australians, the Federal Government has a blueprint for reform that, with the exception of those privileged under current arrangements, is backed by most aged-care providers and consumers. Even the Federal Opposition has called for the implementation of the report's recommendations.
These are that aged-care be reorganised along "user pays" lines (with applicants means-tested to evaluate their capacity to pay), that no one be obliged any longer to sell their homes to fund a place in an aged-care facility, and that an agency to assess individual aged-care needs be established. The report favours governments continuing to fund about 85 per cent of the costs of aged-care, with the remaining 15 per cent coming from consumers. Consumers will be given two options to fund their aged-care: sell their home and invest the proceeds in a dedicated savings scheme (without losing pension entitlements) or allow people to take part in a government-run scheme designed to let them draw on the equity in their home.
This should ensure fewer agonies for families faced with the necessity to find the bond required for entrance to a low-care facility (these are typically about $200,000). Perversely, present government regulations do not allow high-care accommodation providers to charge hefty bonds, and insist on capped low fees. Ensuring asset-rich consumers pay a fairer share of the costs, while bound to be unpopular in some quarters, is well overdue.
Encouraging as these reforms are, the reality is aged-care provision is plagued by under-investment as a result of low returns on capital. With life expectancy increasing steadily, costs will continue rising. Given this forbidding demographic picture, governments will need to invest more in the provision of services that allow older Australians to remain in their homes as long as possible. Even allowing for such safeguards, greater community investment in high-care facilities seems unavoidable.
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