Aged Care Taskforce Report: A Recap

Last year, the federal government created a task force aimed at addressing the issue of sustainable funding for aged care. Over the past few years, expenditure on aged care has seen a significant increase.

  • $23.6 billion spent in 2020-21
  • $24.8 billion spent in 2021-22
  • $27.1 billion spent in 2022-23. 

Projections suggest that by 2026-27, as the older population triples, expenditure on aged care could surge to a massive $42 billion.

Currently, the government covers a significant portion of the financial responsibility for aged care, funding 75% of residential aged care and 95% of home care. However, a recent task force report highlighted that this distribution is not ideal or sustainable. One key recommendation from the report is to reform aged care fees to make them fairer, simpler and more transparent. This would enable individuals to better comprehend and plan for the costs associated with aged care services.

Following the Royal Commission into Aged Care Quality and Safety report, which revealed many failures in the Australian aged care system, the Labor government established the Aged Care task force in mid 2023. The task force was tasked with examining the aged care area and proposing funding options. In March, the task force released its final report, which outlined a series of recommendations aimed at addressing the challenges faced by the aged care system.

These recommendations include:

  • Implementing greater means-testing for home care services to ensure that individuals contribute to the cost based on their means. There is also a recommendation for home care providers to have clearer pricing lists so that recipients are only paying for services they are using.
  • Fully funding the nursing component of care in residential aged care to alleviate financial uncertainty for residents.
  • Introducing resident co-contributions for non-nursing care costs such as food, laundry and cleaning.
  • Simplifying means-testing thresholds to Full Pensioner, Part Pensioner or No Pension categories.
  • Allowing more flexible daily fee setting arrangements for aged care facilities. This can allow for optional ‘luxury’ type charges- eg alcohol, Foxtel etc.
  • Reintroducing a retention payment for aged care providers, based on a variable percentage of the accommodation deposit paid by residents.
  • Phasing out accommodation deposits by 2035 in favour of indexed biannual payments to cover residential aged care costs.
  • Continued support for low-income individuals accessing aged care services.

At the moment, early indications in the industry suggest in the future the family home could be assessed as part of the calculations for aged care.

What happens next?

This is all up to the government.  We would assume that the recommendations will be considered in the Federal Budget in May, with a new Aged Care Act slated to begin on July 1, 2024. 

I will be watching this space very closely and will adapt my advice in line with any changes. I will continue to keep you informed via email as changes are legislated. If you or someone you know has a family member considering aged care, I would love to help you understand all your options when it comes to the financials so you can make informed choices. You are welcome to pass on this email or my contact details.

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