Some seniors might soon be paying way more for aged care—find out why
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The aged care sector is grappling with intensifying challenges as the population grows older. It's estimated that aged care costs will rise by $29 billion over the next decade alone.
But here’s the big question: who will foot the bill for improving standards of care? A federal government task force has recommended that wealthier seniors start contributing more.
This proposal suggests a shift in financial responsibility from the general taxpayer to those more financially capable.
The government currently allocates over $30 billion annually to assist senior citizens with aged care expenses. However, with the Parliamentary Budget Office anticipating a sharp rise in these costs, the task force recommended revising the means-testing for aged care services.
The aim is to require wealthier individuals to shoulder a larger portion of the expenses, thus easing the fiscal strain on government resources.
The task force's report, expected to be published by the end of January, will likely recommend that consumers increase their contributions to maintain the high quality of services without overburdening taxpayers.
The federal government is expected to respond to these recommendations later in the year, possibly during the May budget.
One of the significant changes proposed is an increase in daily living fees for residential care residents, currently set at $61 a day. This could be lifted for those with greater wealth.
Ninety-six per cent of the total cost of residential aged care is covered by taxpayers, with only 4 per cent paid in consumer contributions. This is mostly due to existing means tests capping payments at $33,000 annually or $78,500 over a lifetime.
The task force also suggested changing how the family home contributes to means tests. The current system requires the home's maximum value to be below $198,000. This could also be set to change under the new recommendations.
Aged Care Minister Anika Wells had already hinted at such changes during a National Press Club speech in June, stating that aged care contributions would need to increase to keep up with quality improvements.
'You have to say that if we’re not prepared to accept that cinder-block, linoleum-floor, four-bedroom any more, then we need to work out how we’re going to pay for it,' she said.
‘Plenty of people have said: “I am prepared to pay for an innovative, excellent model of care—I just can’t find it”,’ Ms Wells added.
Ms Wells is expected to give a formal response to the task force report when it is published in a few weeks.
There were also intense discussions earlier on ways to improve aged care, particularly with the idea of imposing a levy on younger Australians.
Last year, Opposition health spokeswoman Anne Ruston said that the Coalition would consider ‘any sensible policy solutions put forward by the Aged Care Taskforce and the government in good faith’.
She stated: ‘Ensuring the sustainability of Australia’s aged-care sector is absolutely critical to ensuring future generations have access to the care they need and the care they deserve as they age.’
You can watch Sky News Australia’s report here:
The proposed changes have sparked mixed reactions from social media users. One commenter wrote: ‘Fair enough, we've done well. Didn't we say we were [saving] for retirement and now it's time for us to spend it and not be a burden?’
‘I have to agree. Aged care is very important but a lot of people are able to pay a little more to maintain the structure of the system,’ another said.
While another commented: ‘I thought having worked, paid taxes, raised tax paying children and generally making the country better was why we looked after elderly people. I must be wrong.’
‘If the national budget will not support the aged who have maintained the budget funding all their lives, then maybe everyone should stop paying into the national finances and fend for themselves,’ a fourth social media user suggested.
The aged care sector in Australia is facing numerous challenges, including a rapidly ageing population, increasing costs, and high expectations for quality care. The proposed changes are part of a broader effort to ensure the sustainability of the sector.
However, these changes also raise important questions about balancing individual and government responsibility for funding aged care. As the debate continues, it's clear that the future of aged care will be a key issue for both policymakers and the public.
What are your thoughts on these proposed changes, members? Do you believe wealthier individuals should contribute more to their aged care costs? Share your thoughts in the comments below.
But here’s the big question: who will foot the bill for improving standards of care? A federal government task force has recommended that wealthier seniors start contributing more.
This proposal suggests a shift in financial responsibility from the general taxpayer to those more financially capable.
The government currently allocates over $30 billion annually to assist senior citizens with aged care expenses. However, with the Parliamentary Budget Office anticipating a sharp rise in these costs, the task force recommended revising the means-testing for aged care services.
A federal government task force has recommended that wealthier seniors should contribute more to the aged care sector. Source: Shutterstock
The aim is to require wealthier individuals to shoulder a larger portion of the expenses, thus easing the fiscal strain on government resources.
The task force's report, expected to be published by the end of January, will likely recommend that consumers increase their contributions to maintain the high quality of services without overburdening taxpayers.
The federal government is expected to respond to these recommendations later in the year, possibly during the May budget.
One of the significant changes proposed is an increase in daily living fees for residential care residents, currently set at $61 a day. This could be lifted for those with greater wealth.
Ninety-six per cent of the total cost of residential aged care is covered by taxpayers, with only 4 per cent paid in consumer contributions. This is mostly due to existing means tests capping payments at $33,000 annually or $78,500 over a lifetime.
The task force also suggested changing how the family home contributes to means tests. The current system requires the home's maximum value to be below $198,000. This could also be set to change under the new recommendations.
Aged Care Minister Anika Wells had already hinted at such changes during a National Press Club speech in June, stating that aged care contributions would need to increase to keep up with quality improvements.
'You have to say that if we’re not prepared to accept that cinder-block, linoleum-floor, four-bedroom any more, then we need to work out how we’re going to pay for it,' she said.
‘Plenty of people have said: “I am prepared to pay for an innovative, excellent model of care—I just can’t find it”,’ Ms Wells added.
Ms Wells is expected to give a formal response to the task force report when it is published in a few weeks.
There were also intense discussions earlier on ways to improve aged care, particularly with the idea of imposing a levy on younger Australians.
Last year, Opposition health spokeswoman Anne Ruston said that the Coalition would consider ‘any sensible policy solutions put forward by the Aged Care Taskforce and the government in good faith’.
She stated: ‘Ensuring the sustainability of Australia’s aged-care sector is absolutely critical to ensuring future generations have access to the care they need and the care they deserve as they age.’
You can watch Sky News Australia’s report here:
The proposed changes have sparked mixed reactions from social media users. One commenter wrote: ‘Fair enough, we've done well. Didn't we say we were [saving] for retirement and now it's time for us to spend it and not be a burden?’
‘I have to agree. Aged care is very important but a lot of people are able to pay a little more to maintain the structure of the system,’ another said.
While another commented: ‘I thought having worked, paid taxes, raised tax paying children and generally making the country better was why we looked after elderly people. I must be wrong.’
‘If the national budget will not support the aged who have maintained the budget funding all their lives, then maybe everyone should stop paying into the national finances and fend for themselves,’ a fourth social media user suggested.
The aged care sector in Australia is facing numerous challenges, including a rapidly ageing population, increasing costs, and high expectations for quality care. The proposed changes are part of a broader effort to ensure the sustainability of the sector.
However, these changes also raise important questions about balancing individual and government responsibility for funding aged care. As the debate continues, it's clear that the future of aged care will be a key issue for both policymakers and the public.
What are your thoughts on these proposed changes, members? Do you believe wealthier individuals should contribute more to their aged care costs? Share your thoughts in the comments below.
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