In 2018, over 19,000 senior Australians either died or were prematurely admitted into residential care while waiting for the Home Care Package they were assessed for. This accounts for 15 per cent of the 129,000 seniors waiting for government-subsidised care at home. For those that are assigned a higher level Home Care Package, the waiting time can exceed 3 years.
The growing preference to age in place is not unprecedented. According to a 2015 Productivity Commission report on Housing Decisions of Older Australians, over three-quarters (76%) of over-60s told the Commission they want to see out their retirement in their own home. 83% view home ownership as vital to maintaining independence and financial freedom as they age.
As a nation, we can do better. In fact, with 1,000 Australians turning 80 every week, we need to do better.
Recent groundbreaking research out of Macquarie University shows that, using 3.5 hours of care per week as a base, every additional hour of in-home care received by an older person reduces the likelihood of hospitalisation by 6 per cent. Therefore, if an older person is receiving 13 hours of care per week, the likelihood of hospitalisation is reduced by a staggering 60 per cent.
What can be done to ensure that older people now, as well as in the future, can receive the in-home support they are eligible for?
The Way of the Irish
Ireland, which has a higher percentage of individuals aged over 85 than Australia, has implemented a system in which a nominated family member can pay privately for the in-home care required by a loved one waiting for their government-subsidised package. The family member can then claim the private in-home care costs on their tax at the top marginal rate – currently 42 per cent. If implemented in Australia, salary sacrifice could be used creatively by those needing to consider this option.
The Pension Loans Scheme
Less than 100 senior Australians have utilised the benefits of the Pension Loans Scheme – a scheme that lets older Australians get a voluntary non-taxable fortnightly loan from the Australian government. Seniors can use a small amount of equity in the family home to top up their pension by up to 150 per cent. This can then fund private in-home care whilst they wait for a package.
At present, 4 Australian taxpayers are required to support 1 person receiving the age pension. By 2050, there will only be 2 Australian taxpayers available to support 1 person receiving the age pension. To prepare for our ageing nation, we may consider setting aside 1 per cent of future superannuation contributions and pooling the funds under the aged care budget to support the care of Australians aged over 85.
Long-Term Care Insurance
Long-Term Care Insurance (LTCI) products are popular in other countries, such as the United States, United Kingdom and Canada, but it has not been adopted in Australia. LTCI is designed to cover one’s long-term care needs, support and services when they eventually require it. The funds can be used to cover home care, assisted living, respite care, respite care and residential aged care.
Spend Your Money
It is natural to want to save your funds so that your children receive it when you pass away. This worked well when we retired at 65 and died at 74. However, we are now living longer than ever before. In fact, Australia now enjoys one of the highest life expectancies of any country. Saving every penny for your children is no longer a sustainable way of living, especially if you begin sacrificing your own quality of life. Accept that some of your funds will need to be used to ensure you live a safe and happy life in your home and set aside enough money to make this work.
Of course, the Federal Government needs to do more. To bring the waiting time down to a manageable 90 days between assessment and assignment, the Government would require an additional $500M injected into the program each year for the next 3 years.
This issue is not going anywhere. It requires immediate action. We can’t allow our senior Australians to wither on the vine.
By Mark McBriarty, Executive Director, My Care Solutions