Minister Anika Wells says Labor will look at overhauling aged care funding model, levy an option

An overhaul of means testing for residents or a new tax to prop up the sector will be looked at, the Aged Care Minister warns.

Aged Care Minister Anika Wells. Picture: NCA NewsWire / Martin Ollman

Overhauling means testing for aged care residents or introducing a new tax levy to prop up the sector will be looked at as part of a review being headed by Aged Care Minister Anika Wells to make aged care more sustainable.

Ms Wells declared the government wanted to keep “as many options open” as possible in reforming the way aged care was funded, revealing a task force investigating the matter would report back with recommendations by the end of the year before feeding into the 2024 budget.

A 1 per cent Medicare-style flat-rate levy on income tax to better fund aged care was proposed by aged care royal commissioner Lynelle Briggs in 2021, while co-commissioner Tony Pagone called for adjustments to personal tax income levels.

Ms Wells said the proposals – which were rejected by the Morrison government – would be considered by the task force.

“I‘m bringing as the chair an open mind to the task force and deliberations of the task force. I would have thought that recommendations from the two commissioners would be something for the task force to consider,” she told the National Press Club.

“I think we should keep … many options open and the task force should work through them.”

Opposition aged care spokeswoman Anne Ruston raised alarm with the potential of more taxes being introduced by the government.

“This government went to the election promising Australians ‘no new taxes’, but the Minister’s actions today are a very worrying sign that they are not committed to keeping that promise,” she said.

It follows The Australian revealing last month that the government had commissioned advice on an overhaul of the aged care sector, gauging public sentiment towards an increase in user co-payments.

When an elderly Australian is currently means-tested for entry into an aged-care home, the government considers up to only $186,000 of their property wealth, irrespective of the value of their home. This means a person who owns a modest home is means-tested at the same level as another person who has a mansion.

Aged and Community Care Providers Association chief executive, Tom Symondson – who Ms Wells selected as part of the task force – has raised concern with the inequity of people with “$10 million mansions” to be subsidised as more vulnerable Australians.

Council on the Ageing chief executive Patricia Sparrow – another member of the task force – has also said older people with the financial means to pay for more aged care should do so, but stressed consumer protections must not be eroded.

On the question of staffing, Ms Wells admitted she expected the aged care workforce was “thousands short” but stood behind targets to have 24/7 nursing in place for all facilities by July 1.

“I‘m going to keep my shoulder to the wheel and keep pulling all the levers until we get there,” she said.

“The boat doesn‘t leave the harbour on 1 July and that’s it and everybody is left on the pontoon is done for. I’ll keep trying on 2 July and every day after that until we get it done.”

Ms Wells has made clear no homes will be closed solely on the basis of staff shortages and stressed the department of health was in contact with all facilities guiding them through to the 24/7 nursing goal.

The Minister also highlighted figures from the recruitment platform, Seek, showing a 30 per cent increase in job ads for aged care nursing this year and a 35 per cent increase in applications per job ad for aged and disability support workers.

“That speaks to more people listening to what we‘re saying, trusting us that we’re trying to lift the standard and coming to the sector,” she said.