Taskforce Report on Aged Care Funding Leaves More Questions than Answers

The Aged Care Taskforce (Taskforce) Final Report (Report) has been released, containing 23 recommendations for the Government to consider regarding how aged care is funded. The Taskforce states that the recommendations support a ‘sustainable’ and ‘fair’ system, as the current system requires additional funding to meet ‘future demand and future quality improvements’.

Aged Care Reform Now (ACRN), a community group of aged care advocates, is concerned with how the Government is approaching aged care funding.

“More funding does not mean more care. I don’t want my son’s inheritance to pay for care I won’t receive” states Alwyn Blayse from ACRN.

The Government has confirmed that, in accordance with Recommendation 2, a tax or new levy will not be imposed to fund aged care costs. Decisions on the other recommendations will be released in the Government’s response. There is concern though that despite the Government’s assurances that there will be no levy to fund aged care, recommendations such as user pays, superannuation charges, and removal of refundable accommodation costs will amount to the same thing – an aged care ‘tax’ that disadvantages those who can least afford care, and more cost to those who want reasonable care.

The Report focuses on how superannuation should be drawn upon to fund a person’s aged care through increased co-contributions, and advises that ‘the Government is and will continue to be the major funder of aged care’. ACRN Member, Yvonne Buters, states that, “the Government is proposing a quasi-inheritance tax, which will not be paid by all. We risk having a 2-tier system between those who can pay and those who can’t. A consumer of aged care services would be happy to pay for high level clinical care, but this Report does not address how we can be sure that high quality care is going to be delivered with additional funding”.

The Report says “Generally, older people are expected to be wealthier than their predecessors, largely due to the maturing superannuation”. However, Australia is one of the leading OECD countries in terms of older people in poverty (22.5% of over 65s).

ACRN are concerned that those in poverty and the homeless will be left without enough care in the safety net, and the middle wealth bracket, and women with less super, will be disproportionately affected by increased co-contributions. “Those who do not have the means to pay will be protected by the Government’s safety net,
and those who fall in the high wealth bracket will easily be able to pay, but it is those in the middle who will be paying the highest percentage of their wealth, which is unfair”
states Amina Schipp ACRN.

One recommendation is the phasing out of Refundable Accommodation Deposits (RADs) by 2035, following an independent review in 2030 to ensure there is adequate capital to meet future demand. Without RADs, the sector is to be funded by a ‘rental only model’ with ‘block funding’ continued in ‘thin’ markets such as rural and remote areas. This is a major change to the current funding framework. “The question is how will the sector acquire capital investment? The Report is vague on how Providers can support this change” says ACRN member and Aged Care Justice CEO, Anna Willis.

Home care programs will also undergo an ‘overhaul’ to improve fairness as the current system ‘can leave significant funds unspent, while others can wait for months to access services’ per the Report. There is a list of inclusions and exclusions as to which home services will be funded, however it remains unclear as to what a home care recipient will be paying or how any funding wastage will be monitored.

“When my mother received home care, she was paying for certain services that were being delivered free of charge through different programs, unbeknownst to us. Providers should be disclosing which free services are available elsewhere instead of charging for those services. There is definitely a lot of wasted funds in the system, how will that be prevented?”, asks Buters.

The Report recommends increased transparency in reporting how funds are allocated by Providers. ACRN are concerned that increased reporting requirements are not sufficient in ensuring funds are used to deliver the highest quality care possible. “We know that when Providers are allocated funds for allied health, for example, they have the option to hire a graduate over an experienced professional, saving them money which is often not passed on to the package holder. This does not ensure the care recipient is receiving the best care outcomes the funding can provide, nor does it promote the presence of professionals in aged care” states Buters.

Under Recommendation 19, the Aged Care Quality Safety Commission (ACQSC) will be tasked with ‘supporting innovation by identifying innovative practices and promoting these across the sector’.

“Would the ACQSC even be equipped or capable at identifying innovative care models? Tasking the ACQSC with an innovation role would be adding more responsibility to an already overburdened Regulator, which should have been replaced by now if the Royal Commission recommendation was followed” says Buters.

‘Fee flexibility’ is another Report recommendation whereby care recipients or ‘consumers’ should be enabled to negotiate ‘better or more daily living services for a higher fee’. There is no definition of ‘daily living services’ however there is a caveat that this recommendation should only be implemented ‘provided appropriate consumer protections and complaints processes are in place’. If the individual is to fund a larger portion of their aged care services, there needs to be more power given to the individual in selecting and curating their own services, and legislation needs to support that.

There are also concerns about the reliability of the data. Figures in the Report state that 69% of residential care operators made a loss in 2021-2022 but more recent data released in March 2024 shows that 3/4 of providers had made a profit. See here.

“If $14.6 billion was spent by the Government on residential care in 2021/22, and we now know that spending fell short in consistently delivering quality care, then we have the wrong system – more money is not the answer”, says Willis.

“Why did we have even have a Royal Commission if the recommendations on funding have been changed by a Taskforce, not democratically elected, with a group of 16 individuals, many linked to aged care providers and chaired by the Government’s own Minister of Aged Care, which is relying on data from sources with possible conflicts of interest?”, asks Blayse.

It is unclear how the Report impacts the new Aged Care Act. Funding is crucial, however, if the new Aged Care Act does not appropriately respond to gaps in clinical care, governance, and rights enforcement, then how can we allocate additional funds to a system which still needs fixing?

ACRN contacts for comment
Clinical care and financial, Alwyn Blayse, alwyn@aachealthgroup.com.au
Consumer rights and legal, Anna Willis, 0417 234 415 Anastasia.willis@gmail.com.au
Aged care regulation, Yvonne Buters, 0403 155 856, ybuters@gmail.com
Liz Barton, 0408 203 800 for ACRN, general comments palcare05@hotmail.com
Amina Schipp 0431016547 aminaschipp@gmail.com

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