Older Australians who can afford it should be paying more for their aged care, says peak body Catholic Health Australia (CHA).

CHA says means testing could help fix the aged care funding crisis and provide urgently needed funds.

CHA, Australia’s largest non-government provider of health and aged care services, has outlined a new funding model for both residential and home-based care and says it’s time to end the ‘one size fits all approach’.

“Our aged care crisis is now so deep, the government can’t’ fix it with taxpayers money. We have more than 100,000 Australians waiting for desperately needed home care packages. The funding model for aged care is so broken that nearly half of homes are operating at a loss and staff are chronically underpaid,” said Catholic Health Australia CEO Pat Garcia.

“We need to finding better ways of unlocking private wealth. If we switch to a fairer means-tested approach, that could bring a huge amount of money into the aged care system. We can use that for the benefit of all. But, if we expect people to pay more, in return we have to deliver a much better standard of care.

“Older Australians quite rightly want to be treated with respect and dignity in the aged care system. We also want them to have a real choice about what care they receive and when.”

Under the new model proposed by CHA, the amount a person pays for their care will be means tested. Wealthier Australians will pay more enabling less financially secure people to access the care they really need.

For residential care, CHA says the value of a senior’s home needs to be taken more into account. Currently only around the first $200,000 of the value of a person’s empty home is means tested for personal and nursing care. This results in people paying the same amount, even if one person had a $2 million home sitting empty, whilst another had left behind a $300,000 unit.

To achieve this, CHA says the interest rate for the current Pension Loan Scheme, which allows people to take out loans against the value of their homes, needs to be significantly reduced.

“Many Australians are sitting on a huge financial resource. It’s only logical and fair that people who have access to millions of dollars tied up in their home should be paying more for their aged-care,” said Mr Garcia.

In a further shake-up, CHA says the residential system needs to cater for personal choice. Currently, all residential providers are given just 85% of the daily single pension to cover the living costs of a resident – for items like food, electricity and laundry. The CHA says residents should be allowed to top up this amount so they can pay extra for more varied services – such as food delivery services, additional classes such as painting or yoga, or simply watching the streaming service of their choice.

“People who go into aged care are individuals and should be treated as such. Being able to make a lifestyle choice shouldn’t end when you go into aged care. The one-size-fits-all approach is incredibly outdated and we need to change this urgently.”

“This is about making the residential aged care system better for all. Standards will rise across all of Australia. More people will enter better residential care homes and, in effect, cross subsidise those who can’t afford to pay extra.

“Residential care homes can be a place of great social inclusion and provide a real sense of community. We just need to make sure they are delivering Australians what they really want.

“We can’t afford to wait any longer to start having tough conversations about aged care. We need to start now.”

The Royal Commission into Aged Care Quality and Safety is on-going.

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