Richer Australians will pay more for aged care under a long-awaited government review released this week. Is this the start of a new trend?
or Tracey Burton, a big part of this week’s new proposals for the future of aged care in Australia comes down to bricks and mortar.
If adopted by Labor, recommendations from the panel led by former senior Treasury official Nigel Ray are designed to stabilise the industry and provide greater choice for retirees and their families.Reform is badly needed: the landmark royal commission found aged care in Australia represented “a shocking tale of neglect” while two-thirds of residential providers reported a net loss in financial year 2022, equating to a combined $2.26 billion.
Under the proposed changes, participant co-contributions would go to covering services like accommodation and everyday living costs including laundry and house cleaning. Means testing would be imposed, and poorer retirees will have their care paid for by taxpayers. Existing lump sum payments known as refundable accommodation deposits, or RADs, will be phased out by 2035, in favour of a rental-only model for residents.
“The experience of care in aged care at the moment is pretty good because we have these incredible people who come to work in the sector, and they bring their hearts to the job,” she says. “But we need enough money to make sure there’s enough of them on the floor and that the facility matches the expectations of the residents and the dignity they deserve.”
But MPs on both sides privately acknowledge that many wealthier Australians have the money to pay for more of their aged care. By 2060, one in every three dollars paid out of the superannuation system will be an inheritance, rather than retirement income, “However, with a system as complex as aged care, the impact of overlooking other critical factors can significantly impact the future trajectory of the industry.
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