Anthony Albanese’s sunset clause: aged care at home

Older Australians will receive more support to see out their final years in their own homes while self-funded retirees could pay an extra $13,000 a year for residential aged care, under ‘once-in-a-generation’ reforms.

‘Once in a generation’ aged care reforms will support older Australians to stay in their own homes during their final years.

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Older Australians will receive more support to see out their final years in their own homes while self-funded retirees could pay an extra $13,000 a year for residential aged care, under “once-in-a-­generation” reforms aimed at putting the sector on a sustainable pathway to cater for an ageing population.

Anthony Albanese declared his reforms would help older Australians “retain their independence and remain in their homes as they age”, after striking a $5.6bn deal with the Coalition to bolster in-home support while raising costs for part-pensioners and self-­funded retirees who choose to go to a nursing home.

The package will cost $930m over four years but is projected to save the commonwealth $12.6bn over the coming decade, reducing yearly aged care spending growth from 5.7 per cent to 5.2 per cent in a significant structural budget saving. “What we’re doing is making sure that the system is sustainable going forward,” Mr Albanese said.

“More Australians want to spend more time at home with their community where they’re engaged, and these reforms will enable that to happen.”

Under the deal backed by the Coalition partyroom on Thursday after months of negotiations with Labor, $4.3bn would be spent to support an extra 300,000 people receiving aged care services at their homes over the next decade.

This includes giving terminally ill people up to $25,000 to receive palliative care support to spend the final months of their lives at their homes, as well as $15,000 for older Australians to modify their homes so they are safe to live in.

The home services would ­include staff visiting to help with nursing care, occupational therapy, getting dressed and taking medications. Staff would also help with everyday living such as ­cleaning, gardening, shopping and meal preparation.

From July next year, residential aged care residents with “sufficient means” would pay more for non-clinical services, such as showering, haircuts and lifestyle activities, with the lifetime contribution cap lifting from nearly $80,000 to $130,000,

The changes would be grand­fathered, meaning existing aged care residents would be exempted from the new fee structure, with the treatment of the family home unchanged under the means test.

According to scenarios provided by the government, a self-­refunded retiree with an income of $70,000 and $500,000 in assets, excluding the family home, would see their contributions rise to nearly 45 per cent of total costs, from $49,400 to $62,800 a year.

A part-pensioner with $500,000 in assets would see their fees rise from $34,300 a year to $47,700, amounting to 34 per cent of the total cost.

A full pensioner who owns their own home and has other assets amounting to $150,000 would pay an extra $3000 a year, at $28,800.

As part of the legislation tabled in parliament on Thursday, a new Aged Care Act would strengthen oversight of bad behaviour by care providers and create a new regulator with investigative powers.

Aged Care Minister Anika Wells said the reforms were about “regearing the entire system of aged care in this country to be about supporting you at home and keeping you independent”.

“Without structural change, we will not be able to sustain the level of care older Australians deserve – it is that simple,” Ms Wells said.

Council on the Ageing chief executive Patricia Sparrow said the government’s focus on home care support with a $4.3bn ­investment package was “very welcomed”.

“(It) is vital to ensuring Australians can age at home if they want to and should reduce the unacceptable time people currently have to wait for care at home,” Ms Sparrow said. “We need a sustainable aged care system that allows older Australians can access quality care when and where they need it.”

Aged and Community Care Providers Association chief executive Tom Symondson said both major parties had “put older Australians and the future of aged care above party politics”.

“We will need at least 10,000 new beds to be opened per year for the next two decades to keep up with demand, and today we are closing more than we’re opening,” Mr Symondson said.

“We need investment to turn the situation around, and this legislation will enable that.”

The Coalition gave its in- principle support for the financial sustainability framework after an emergency party room meeting on Thursday that included “one of the longest speaking lists” many MPs had seen, with half a dozen people speaking for and against the reforms.

Coalition sources said those who spoke against it were primarily concerned with “the politics” and efforts of Labor to hang the introduction of the legislation on first getting the opposition’s in-principle support.

Those with the greatest concerns included former aged care minister Richard Colbeck and Nationals MP Keith Pitt. The Australian was told Garth Hamilton and Nola Marino also raised issues with the legislation.

Rick Wilson, Keith Wolahan and Henry Pike spoke in favour of progressing reforms in a discussion sources said was “respectful” and “allowed everyone to be heard”.

The bill will now be referred to a Senate committee, with the aim that the committee reports in time for the laws to come into effect on July 1 next year.

Opposition aged care spokeswoman Anne Ruston said the Coalition had won significant concessions on the reform package, including that changes were grandfathered, that there was a lower taper rate for co-contributions and the removal of “Labor’s outrageous attempt to force unionism into every aged care home”.

The Coalition negotiated for Labor to drop its election promise to introduce criminal penalties for board members of providers breaching new standards. Despite the concessions, ­Coalition MPs stressed the party had not approved the full bill, but only agreed not to amend the financial sustainability framework proposed by Labor.

Aged care currently costs the federal government $36bn a year, making it one of the government’s five largest spending programs alongside the NDIS, Health, Defence and interest paid on debt. Negotiations between the two major parties had been in train for months, leading to significant angst in the sector about a lack of reform progress and concerns that providers would go under while waiting for the politicians to agree.

Recent industry analysis showed more than 50 per cent of the nation’s 2700 aged care homes were operating at a loss.