Higher daily fees for wealthy Australians in nursing homes – that pay for living expenses such as meals, laundry and cleaning — are being weighed up by the federal government as it prepares to overhaul funding of the residential aged care system.
Increasing the $61 daily payment for people who can afford it has emerged as one of the likely options for reform after Prime Minister Anthony Albanese this week ruled out changing how the family home is means-tested in aged care, in a sign he wants to avoid an emotional political debate.
The government has repeatedly delayed the release of an independent review about how to fix aged care funding.Credit: Louise Kennerley
But his government nonetheless needs to make a difficult judgment about which Australians should be charged more, and how much those fees will be, as it approaches the May budget with the promise of addressing its rising aged care bill.
The government has repeatedly delayed the release of an independent review about how to fix aged care funding, which it received in December, as it focuses on cost-of-living relief. Sources familiar with the taskforce report but not authorised to speak publicly said it had made principle-based recommendations and the government would choose how it responded to those.
Aged care, like the National Disability Insurance Scheme, is one of the major structural budget issues Labor must confront. The independent Parliamentary Budget Office estimates aged care costs will climb by more than 82 per cent – or almost $29 billion – to $63.6 billion in 2033-34.
Aged Care Minister Anika Wells sent a strong signal the government would expect more contributions from Australians in return for an improvement in the quality of care when she announced the taskforce in June last year.
While the Coalition has offered bipartisanship, opposition aged care spokeswoman Anne Ruston said the Albanese government was creating confusion and uncertainty by holding back the taskforce’s recommendations.
“Their report is two months delayed, and yet the minister continues to refuse to be transparent with the Australian public and older Australians about what it is intending regarding the financial viability of the sector and support for those who rely on it,” she said.
Albanese this week ruled out changes to how the family home is considered in aged care asset tests to bat away an opposition scare campaign but gave no further details about the government’s plans.
“There is no change to the treatment of the family home in any of the documents that have been before the government. None,” Albanese said in question time.
The family home is considered in the asset test that determines whether people pay extra for their “care costs” in residential homes – the fees that cover day-to-day nursing and personal care.
However, the home is only counted to a value of $198,000, meaning a person with a property worth $300,000 is assessed the same as another with a home worth $3 million. Personal care payments are also capped at around $33,000 a year, or $78,500 over a lifetime.
If the government decides not to change care fees, it could tweak other aged care payments such as the basic daily living fee, which covers services such as meals, laundry and cleaning.
The taskforce has recommended that fee – which is set at 85 per cent of the age pension, currently about $61 a day – be re-evaluated and lifted for those who have greater means, which would inject more money into the system from aged care users rather than the taxpayer.
However, the panel has not specified what the new rate should be or how it should be means-tested. Those decisions will be left to the government as it prepares its response to the taskforce’s recommendations in time for the budget.
Aged care providers had advocated for the family home threshold to be lifted, given it has not changed for years, as they pushed for users to pay more instead of other funding options such as a taxpayer levy.
Emma Maiden, general advocacy manager at Uniting NSW.ACT, said there were still ways of raising consumer contributions while leaving the family home threshold intact.
“The three things that need to change are the actual means-testing formula, the yearly and lifetime caps on contributions to care, and the calculation of the basic daily fee for those with means,” she said.
“Uniting eagerly awaits the release of the Aged Care Taskforce report and is hopeful these three important reforms are included and will be embraced by government.”
Wells’ office declined to comment.
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