It is predicted that Australians aged 85 or over, the key demographic for aged care, will grow from the current 2% of the population to 5% by 2050.

And to meet these demands, Australia needs a continually growing and consumer-driven aged care sector.

The Turnbull Government’s response to the Aged Care Legislative Review, which was presented in Parliament earlier this week, needs to focus on a sustainable funding strategy for the long term aged care needs of Australians, says the Aged Care Guild.

The Legislated Review of Aged Care 2017, led by David Tune, examined the effectiveness of the aged care reforms enacted by the previous Labor Government through the 2012 Living Longer Living Better package.

The Government has said the Review’s 38 recommendations will be considered by an ageing taskforce in the Department of Prime Minister & Cabinet.

A number of the recommendations could have serious implications on the cost of care, including:

  • Making the basic daily fee in home care proportionate to the value of the package and ensuring providers charge it
  • Including the full value of the home in residential aged care mean testing (except when a protected person is living there)
  • Removing the basic daily fee cap for market price payers (with amounts over $100 requiring approval)
  • Removing annual and lifetime caps on income tested care fees and means tested care fees
  • Increasing the market price cap to $750,000

However, they have also said, in a statement, that “we do not support recommendations 13 and 15”, which relates to means testing and caps on consumer contributions. The Aged Care Guild said they found this “disappointing”.

Another key Tune recommendation, in relation to the daily care fee for those residents with means, will have to be seriously considered now that the full impact of government funding cuts to aged care in the 2015 MYEFO and 2016 Federal Budget are taking effect.

Aged Care Guild CEO, Cameron O’Reilly said today that “just as the Government has legislation before the parliament aimed at securing a long-term funding deal for the National Disability Insurance Scheme (NDIS) through a higher Medicare levy, it has to embrace the recommendations of its independent reviewer about how we fund the massive growth in aged care needs in a rapidly ageing society”.

“Aged care funding overwhelmingly goes to employing and developing the aged care workforce of over 350,000 people who do an outstanding job in caring for older Australians in the home or in residential facilities. Funding and quality of care for residents are therefore closely interlinked”.

A Deloitte Access Economics economic benefits study commissioned by the Aged Care Guild in 2016 showed that in 2014-15 the aged care sector generated $13.5 billion in value added to the Australian economy, of which $11.7 billion was attributable to payments to labour.

“How we sustainably fund the growth of care services and care workers with a mix of public and private funding is one of the key questions facing the country and Mr Tune’s sensible recommendations have put this issue firmly on the national agenda”, Mr O’Reilly said.

The Guild urges the Government and Opposition to use the Tune Review to sit down and reconsider how they are going to ensure there is a sustainable, growing and consumer-driven aged care sector.

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