All Task But No Courage

On 11 March 2024 the Aged Care Taskforce, a broadly based group handpicked and chaired by Aged Care Minister, Anika Wells, released its report.aged care taskforce

Unsurprisingly it has garnered a lot of attention in the media.

The main takeaway from the report is the Taskforce’s conclusion and recommendation that aged care costs are, and will continually to become, unsustainably high under current funding models and users are going to have to pay more for the services they obtain.

The Aged Care Royal Commissioners in their report suggested that a levy could be imposed on all taxpayers, similar to that for Medicare. This was rejected by the Taskforce.

It is not surprising that they reached this conclusion as there is already much criticism over the fact that the younger generation of taxpayers is increasingly shouldering an unfair proportion of the taxation burden on behalf of the ‘baby boomer’ generation.

Instead, the Taskforce recommended that users should pay for a greater share of the costs of aged care than they are at present. This will apply both in respect of residential aged care and home care packages.

This idea is hardly revolutionary. Already all recipients of government supported aged care services are subject to a means test and those with means pay more. Further, many “higher end” aged care facilities charge an extra services or additional services daily fee to their residents for services like pay TV, wi-fi, massages, alcohol at meal times, extra meal choices, outings, and the like.

At present though, even a person with very significant means will be subject to an annual cap on income (home care) or means tested (residential care) fee. That annual cap is at present $33,309 with a lifetime cap of $79,942.

Presumably, if the Taskforce’s recommendations are adopted those caps will be increased significantly or lifted entirely.

It is regrettable though that the Taskforce has not had the courage to deal with one of the extremely inequitable features of the means test – the value ascribed to the family home.

At present, if the person moving into residential care does not have a partner residing in the family home it will be taken into account for the means assessment but only to the extent of $201,231.20. Given the current value of residential property in Australia almost every homeowner will have a property worth this amount. Many homeowners’ family

homes are now worth many multiples of this sum yet will be treated in the same way as someone whose home may just exceed this threshold.

Apparently, the idea of bringing the true value of the family home into account for the purpose of means testing was rejected quite decisively by the Taskforce.

This is disappointing as all that this does is ensure the inter-generational transfer of property wealth while leaving taxpayers to continue to fund most of the costs of aged care.

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All About Aged Care

An aged care consulting and advisory service in Perth that specialises in aged care placement.

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